Effectively, that escalated rapidly. Six weeks after announcing it would shut down after greater than 50 years in enterprise, McGlinchey Stafford has filed for chapter.
This isn’t a reorganization play. It’s a Chapter 7 submitting, which means the agency is liquidating its remaining belongings to fulfill collectors. Court docket paperwork present McGlinchey has between 200 and 999 collectors, with each belongings and liabilities estimated someplace between $10 million and $50 million. In different phrases, this isn’t a tidy wrap-up. The Times-Picayune has extra data:
A number of attorneys acquainted with the scenario who weren’t approved to remark publicly on the case mentioned the agency didn’t initially plan to file for chapter when it introduced it was closing. Because it started winding down operations, nonetheless, it grew to become evident that there wasn’t sufficient cash to fulfill the agency’s greater than 15 long-term lease obligations in workplace buildings across the nation.
As we’ve beforehand reported, McGlinchey’s troubles didn’t come out of nowhere. A mixture of lagging collections, inside friction, and hefty overhead weren’t serving to the agency. Rainmakers left. By the point the dissolution vote occurred, the exit doorways have been already swinging. Follow teams later migrated in chunks as Biglaw firms swooped in amid the agency’s collapse.
At its peak, McGlinchey had roughly 160 attorneys in 18 workplaces nationwide and was considered one of Louisiana’s most distinguished corporations. Now, a court-appointed trustee will liquidate what stays.
For agency leaders watching from afar, this can be a cautionary story: nationwide footprint, costly buildouts, slowing collections, key departures. When momentum turns damaging, it turns quick — and as we now know, the distinction between “strategic alternate options” and Chapter 7 might be about six weeks.
As McGlinchey Stafford prepares for shutdown, the Louisiana firm files for bankruptcy [Times-Picayune]
Earlier: Midsize Firm Kicks Off The New Year By Announcing Plans To Close Its Doors
Staci Zaretsky is the managing editor of Above the Legislation, the place she’s labored since 2011. She’d love to listen to from you, so please be at liberty to email her with any ideas, questions, feedback, or critiques. You’ll be able to observe her on Bluesky, X/Twitter, and Threads, or join together with her on LinkedIn.
