1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

DIAMOND MCCARTHY LLP Howard D. Ressler, Esq. (pro hac vice) Stephen T. Loden, Esq. (pro hac vice) Jason M. Rudd, Esq. (pro hac vice) Christopher R. Murray, Esq. (pro hac vice) 909 Fannin, 15th Floor Houston, TX 77010 Telephone: 713-333-5100 Facsimile: 713-333-5199 hressler@diamondmccarthy.com sloden@diamondmccarthy.com jrudd@diamondmccarthy.com cmurray@diamondmccarthy.om Counsel for Allan B. Diamond, Chapter 11 Trustee for Howrey LLP KORNFIELD, NYBERG, BENDES & KUHNER, P.C. Eric A. Nyberg, Esq. (Bar No. 131105) Chris D. Kuhner, Esq. (Bar No. 173291) 1970 Broadway, Suite 225 Oakland, CA 94612 Telephone: 510-763-1000 Facsimile: 510-273-8669 e.nyberg@kornfieldlaw.com c.kuhner@dornfieldlaw.com Local Counsel for Allan B. Diamond, Chapter 11 Trustee for Howrey LLP UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA In re Case No. 11-31376 DM Chapter 11

17 18 HOWREY LLP, 19 20 Debtor. 21 22 23 24 25 26 Case: 11-31376 Doc# 765 Filed: 08/20/12 37 Entered: 08/20/12 12:17:41 Page 1 of FIRST INTERIM REPORT OF CHAPTER 11 TRUSTEE ALLAN B. DIAMOND

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Case: 11-31376 Doc# 765 V. A. 1. 2. B. C. 1. 2. 3. I. II. III. A. B.

Table of Contents Introduction........................................................................................................................4 Background ........................................................................................................................6 Estate Administration .........................................................................................................7 Trustees Retention of Professionals ................................................................................7 Compensation of the Trustee and Diamond McCarthy .....................................................9

IV. Business Operations .........................................................................................................10 A. 1. 2. 3. 4. 5. 6. Wind-Down Operations.................................................................................................10 Staff Reductions and Management of Critical Staff....................................................10 Closing Facilities and Cutting Costs...........................................................................11 Winding Down the Debtors Pension Plans................................................................11 Downsizing Information Technology Infrastructure...................................................11 Tax Matters ...............................................................................................................12 Cash Collateral Use and Negotiations with Citibank, N.A..........................................12 Disposition of Records of Former Howrey Clients.........................................................14 Foreign Operations ........................................................................................................15 United Kingdom ........................................................................................................15 Belgium.....................................................................................................................16 Germany....................................................................................................................16

Asset Management ...........................................................................................................17 Asset Recovery..............................................................................................................17 Accounts Receivable..................................................................................................17 Contingency Fee Interests..........................................................................................18

2 Filed: 08/20/12 37

Entered: 08/20/12 12:17:41

Page 2 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 D. C. B.

3.

Equipment and Other Assets ......................................................................................23 Claims Investigation, Analysis and Recovery ................................................................23

1. 2. 3.

Preference and Fraudulent Transfer Litigation ...........................................................24 Unfinished Business Claims ...................................................................................24 Other Potential Claims/Litigation...............................................................................25 Asset Disposition...........................................................................................................25

1. 2.

Art Collection Sales ...................................................................................................26 Other Liquidations and Settlements............................................................................26 Defense of Claims .........................................................................................................26

1. 2.

Proofs of Claim..........................................................................................................26 The WARN Act and Warner Investments Adversaries ...............................................27

VI. Recovery to Creditors and a Chapter 11 Plan of Liquidation.............................................27

Case: 11-31376

Doc# 765

3 Filed: 08/20/12 37

Entered: 08/20/12 12:17:41

Page 3 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

I.

INTRODUCTION Allan B. Diamond, the chapter 11 trustee (the Trustee) of the estate of Howrey LLP

(Debtor or Howrey) makes this First Interim Report on the progress and status of the case. Since the Trustees appointment on October 12, 2011, the Trustee, with his team of professionals and Howrey staff, have tackled many complex issues and successfully advanced this bankruptcy case by: a. Transitioning administration of the estate from the debtor-in-possession; b. Negotiating weekly, monthly and quarterly extensions of the Debtors authority to use cash collateral; c. Assessing, asserting and protecting the Debtors interests in various contingency fee cases, including collecting significant recoveries; d. Selecting and employing legal, financial and collection professionals to streamline administration of the estate; e. Transitioning the collection of the Debtors accounts receivable to professionals employed on a contingency fee basis resulting in over $5 million in recoveries; f. Finalizing the wind-down of the Debtors three pension plans; g. Developing, obtaining approval and implementing procedures for the disposition of voluminous physical and electronic client files; h. Winding down the Debtors information technology infrastructure while preserving all critical data; i. Analyzing, preparing and conducting asset sales; Investigating, gathering and analyzing voluminous data and documents related to potential litigation claims against myriad third-parties as well as conducting appropriate legal research, analysis and preparations for the commencement of proceedings that seek monetary recoveries;

18 19 20 21 22 23 24 25 26

j.

k. Commencing document and testimonial discovery related to certain potential assets and claims; and l. Addressing numerous daily issues that arise in bankruptcy cases of similar complexity.

Case: 11-31376

Doc# 765

4 Filed: 08/20/12 37

Entered: 08/20/12 12:17:41

Page 4 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

Much has been accomplished in a relatively short amount of time. But much remains to be done to complete the administration of the Debtors estate and provide the maximum recovery for creditors. The priority of the Trustees ongoing efforts is to maximize the recovery for Howreys creditors (secured, administrative, priority and unsecured). It is anticipated that most of the value available to creditors will come from potential claims that the Trustee is currently investigating and developing arising from: (i) Howreys interest in pending contingency fee cases; (ii) claims against former partners who received distributions at a time when the firm was insolvent; (iii) claims against former partners that departed with unfinished business and their successor law firms that have retained profits belonging to the Howrey estate; and (iv) other potential litigation claims against various third-parties. The chapter 11 process allows the

Trustee the flexibility to pursue the full-range of available options to recover and monetize assets as well as resolve disputes with Howrey creditors and, once identified, to craft an appropriate plan of liquidation. Another important goal has been to protect the interests of former clients by, among other things, ensuring that client records and files are preserved, administered and ultimately disposed of in a way that provides notice and an opportunity to retrieve their files to former clients while safeguarding the confidentiality of client information. The chapter 11 process allows the Trustee to direct resources to ensure this critical job is handled consistently with the highest standards of professional ethics. This First Interim Report is offered as a supplement to the Trustees monthly operating reports, status hearings and other filings with the Bankruptcy Court.

Case: 11-31376

Doc# 765

5 Filed: 08/20/12 37

Entered: 08/20/12 12:17:41

Page 5 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

II.

BACKGROUND Prior to bankruptcy, Howrey was one of the largest law firms in the world. Founded in

1956, the firm grew to employ over 750 lawyers at offices in Washington, D.C., California, Illinois, New York, Texas, Utah, Virginia and several foreign countries, including Belgium, France, Germany, the Netherlands, Spain, Taiwan and the United Kingdom. Howreys profitability suffered in the wake of the worldwide financial crisis and partners began abandoning the firm. By March 2011, Howreys partnership formally voted to dissolve the law firm. A Dissolution Committee was appointed to direct Howreys wind-down and liquidation. On April 11, 2011 (the Petition Date), three of Howreys creditors filed an involuntary petition for bankruptcy under chapter 7 of the Bankruptcy Code in the United States Bankruptcy Court for the Northern District of California, San Francisco Division (the Bankruptcy Court). On June 7, 2011, the case was converted to a voluntary chapter 11 proceeding under the United States Bankruptcy Code, thus allowing Howrey to continue as a debtor-in-possession. The Dissolution Committee continued to direct the bankruptcy case on Howreys behalf until Howreys secured lender, Citibank N.A., filed a motion to appoint a chapter 11 trustee to take over administration of the case. On October 7, 2011, the United States Trustees Office of the Department of Justice appointed Allan B. Diamond to serve as the chapter 11 trustee. On October 12, 2011, the Bankruptcy Court approved that appointment. Immediately upon appointment, the Trustee

began to handle the affairs of the Howrey bankruptcy estate. These efforts are discussed below in the following groupings: A. Estate Administration concerns the bankruptcy administrative aspects of the case, including selection and retention of professionals, review and analysis of all

Case: 11-31376

Doc# 765

6 Filed: 08/20/12 37

Entered: 08/20/12 12:17:41

Page 6 of

1 2 B. 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 III. D. C.

professional fee applications and all dealings with the Bankruptcy Court generally. Business Operations refers to winding down Howreys business operations, including the (i) maintenance, assembly, protection, return, disposition and handling of all client and law firm records, files and data, (ii) closing Howreys worldwide offices and coordinating with other court appointed officials from foreign countries, (iii) managing and completing the processes associated with all necessary tax returns, pension, healthcare and other insurance obligations, (iv) reducing and winding down all Howrey operational costs, including information technology systems, data centers, personnel, facilities, furniture, equipment, art work and other assets, and (v) managing Howreys wind-down staff. Asset Management includes investigation, recovery and monetization of assets of the estate, including the prosecution, settlement and resolution of potential claims and causes of actions against former partners and third-parties, as well as liquidation, sale and disposition of assets. Claims Administration and Litigation Defense encompasses handling and defending all types of claims against the estate, including WARN Act, professional liability, contract and other potential creditor claims.

ESTATE ADMINISTRATION Upon his appointment, the Trustee began administering the Howrey estate. Given the

complexity of winding down an international law firm with thousands of former clients and employees, the Trustee has been engaged in the efforts described below. A. Trustees Retention of Professionals

To assist in administering the bankruptcy case, the Trustee has carefully selected and successfully secured Bankruptcy Court authority to retain and compensate legal, financial, accounting and other professionals. The Trustee retained the law firm of Diamond McCarthy

LLP (Diamond McCarthy) to serve as general bankruptcy counsel under section 327(a) of the Bankruptcy Code. The Diamond McCarthy firm is uniquely suited to serve in this capacity, given its highly relevant experience advising the trustee in the national law firm bankruptcy case of Drier LLP, as well as its involvement in other national law firm bankruptcy cases. In addition, Diamond McCarthys lawyers have decades of experience and expertise in handling all types of

Case: 11-31376

Doc# 765

7 Filed: 08/20/12 37

Entered: 08/20/12 12:17:41

Page 7 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

litigation claims and fraudulent transfer actions on behalf of bankruptcy trustees, debtor estates and creditor committees nationwide. Further, Diamond McCarthys ability to hit the ground running and to provide top-tier legal services at hourly rates that compare favorably to those of other national firms made Diamond McCarthy ideally suited to serve the Howrey estate. The Trustee obtained Bankruptcy Court authority to employ Diamond McCarthy on November 29, 2011. The Trustee engaged the Bay Area law firm of Kornfield, Nyberg, Bendes & Kuhner, P.C. as local California counsel. Attorneys Eric Nyberg and Chris Kuhner have extensive experience practicing before the Bankruptcy Courts in the Northern District of California and continue to provide insight and assistance on a range of estate administration issues. The Trustee obtained Bankruptcy Court authority to employ the Kornfield, Nyberg, Bendes & Kuhner, P.C. law firm on November 29, 2011. The Trustee reached an agreement with the Official Committee of Unsecured Creditors (the Committee) whereby they each would employ Development Specialists, Inc. (DSI) as their respective financial advisors in order to minimize costs to the Estate. The Committee had retained DSI prior to the appointment of the Trustee. The Trustee worked with the Committee to expand the scope of DSIs services, which the Bankruptcy Court approved. The Trustee also retained specialized counsel in a number of areas. Most recently, the Trustee obtained Bankruptcy Court approval to hire the Eversheds law firm in the United Kingdom for the purpose of, among other potential actions, reinstating the charter of Howreys UK LLP entity. This action is necessary in order to conduct a proper liquidation of Howrey UK and eventually to repatriate any and all funds due and owing to the Howrey estate, as described in more detail below.

Case: 11-31376

Doc# 765

8 Filed: 08/20/12 37

Entered: 08/20/12 12:17:41

Page 8 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

Tax and accounting professionals are also essential to the efficient wind-down of Howreys operations. To provide these services, the Trustee selected the tax accounting firm of Eichstaed & Lervold LLP to complete Howreys required tax reporting and filing. The Trustee also hired, with Bankruptcy Court Approval, the accounting firm Baker Tilly Virchow Krause LP and the actuary firm October Three Consulting Group LLC to provide specialized accounting to complete the wind-down of Howreys three pension plans. The Trustee selected and engaged the Adler Law Firm, of San Francisco, California, as special counsel for collection of Howreys prepetition accounts receivable. The Adler Law Firm is particularly well-suited for this task, having provided services to numerous chapter 7 and 11 trustees in major law firm bankruptcy cases, including the chapter 7 cases of Brobeck, Phleger & Harrison LLP and Thelen LLP. The Bankruptcy Court granted the Trustee authorization to hire the Adler Law Firm on December 20, 2011. In addition to the Adler Law Firm, the Trustee retained the services of On-Site Associates, LLC, an experienced accounts receivable collection agent for law firms. The retention agreement called for payment at a percentage of collections on a sliding scale to both reduce the cash costs to the Howrey estate and to properly incentivize collections efforts. The Bankruptcy Court approved this retention on December 19, 2011. B. Compensation of the Trustee and His Professionals

As with all professionals employed under section 327 of the Bankruptcy Code, and pursuant to the Bankruptcy Courts orders regarding compensation of professionals, the Trustees professionals (with the exception of those retained on a contingency fee arrangement) are compensated in arrears on a monthly basis for fees and expenses, subject to a 20% hold-back of fees pending quarterly interim fee applications. The Trustees compensation is similarly subject to periodic payments subject to hold-backs. While the Trustee believes the estate will recover assets sufficient to pay all administrative creditors in full, out of an abundance of caution 9 Filed: 08/20/12 37

Case: 11-31376

Doc# 765

Entered: 08/20/12 12:17:41

Page 9 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

and to preserve cash in the estate, the Trustees professionals have voluntarily agreed to forego collection of the 20% hold-backs of fees until additional assets are liquidated. Further, the Trustee has not sought payment of any trustee fees to date. The Trustee has previously disclosed that he is also the managing partner of the Diamond McCarthy law firm. To ensure that the Howrey estate is not billed twice for the Trustees services, both the Trustee and Diamond McCarthy keep detailed time records that distinguish between legal services provided by Diamond McCarthy personnel and non-legal services that fall under the Trustees administrative duties. IV. BUSINESS OPERATIONS A. Wind-Down Operations

The Trustee and his professionals continue to perform a wide range of necessary and essential tasks for the benefit of Howreys estate. These include day-to-day management of Howreys wind-down operations, as well as meetings with counterparties and other parties-ininterest to reduce costs and streamline core functions. The Trustee and his professionals also regularly respond to questions from the public, media and creditors regarding the status of the case, their claims and their potential recovery. 1. Staff Reductions and Management of Critical Staff

Upon the Trustees appointment in October 2011, Howrey employed approximately twenty-three full-time employees and several additional part-time and hourly employees, staff and attorneys, with a monthly payroll exceeding $350,000. The Trustee has since reduced fulltime staffing by nineteen, with four remaining full-time staff members working from Howreys wind-down office in Washington, D.C. In addition, the Trustee employs three former Howrey staff members on a part-time and as-needed basis to address specific issues as they arise. The Trustee has lowered the monthly payroll costs by 84% to $55,000.

Case: 11-31376

Doc# 765

10 Filed: 08/20/12 Entered: 08/20/12 12:17:41 37

Page 10 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

The Trustee and his professionals work closely with the Howrey staff and rely on their expertise and institutional knowledge of Howrey to efficiently administer the estate for the benefit of creditors. 2. Closing Facilities and Cutting Costs

Staff reductions have also allowed the Trustee to downsize Howreys office space. On the Appointment Date, Howrey occupied over 14,000 square feet of office space on Pennsylvania Avenue in Washington, D.C. at a monthly cost of over $40,700 pursuant to a one year lease negotiated prior to the Trustees appointment. On September 1, 2012, the Trustee will move the Howrey staff to a considerably smaller location at a monthly cost of only $6,000, which will save the estate $34,700 per month. 3. Winding Down the Debtors Pension Plans

The Trustee has worked to complete the final wind-down of Howreys three prepetition pension plans. Since his appointment, the Trustee has coordinated the final disbursement of plan funds to beneficiaries. On July 10, 2012, the Bankruptcy Court approved the Trustees

employment of accountants and actuaries to perform the required final reporting and accounting required to complete the pension plan wind-downs. The Trustee anticipates the completion of all final reports and the related governmental filings in the next ninety days, which will complete the wind-down of the Debtors pension plans. 4. Downsizing Information Technology Infrastructure

At the time of the Trustees appointment, the Debtor operated and maintained the information technology infrastructure of a global law firm that included 300 physical servers with 200 terabytes of data operating in data centers in Virginia and the Netherlands. The operating cost of this infrastructure exceeded $100,000 per month. Operation of data centers designed to support thousands of users globally was no longer necessary to Howrey, and

Case: 11-31376

Doc# 765

11 Filed: 08/20/12 Entered: 08/20/12 12:17:41 37

Page 11 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

reduction of the costs associated with the data centers was critical to preserve the estates resources. Unwinding this infrastructure requires considerable expertise. In late 2011, the Trustee engaged the Aldridge Company (Aldridge) to assist him in this task. Aldridge was

subsequently approved by the Bankruptcy Court and, by March 2012, Aldridge, the Trustee, and Howreys wind-down staff successfully reduced Howreys hosted data center from three hundred servers to a combination of four physical servers and additional cloud-based servers. As a result of these efforts, the Howrey estate was able to eliminate the need for the massive data centers based in Virginia, and Amsterdam, Netherlands thus reducing the monthly operating cost of Howreys information technology infrastructure from over $100,000 to $12,000. This resulted in a cost savings to the estate of more than $1,000,000 per year. This feat was accomplished while preserving all former client data and all of the Debtors financial and operational electronic records. 5. Tax Matters

On July 10, 2012, the Court approved the Trustees employment of tax accountants to complete the Debtors 2011 tax returns and related tax filings. The Trustees accountants, together with his financial advisors at DSI, are preparing these tax filings for submission later this year. Further, the Trustee and his professionals have worked with taxing authorities in California, Texas, New York, and other jurisdictions to address tax claims, return submissions as well as other related issues and disputes. 6. Cash Collateral Use and Negotiations with Citibank, N.A.

As well documented in this Bankruptcy Case, Howreys largest creditor, Citibank, N.A. (Citibank), asserts a lien on substantially all of Howreys prepetition assets, including accounts receivable and the cash on hand in the estate. Prior to the Trustees appointment, the Debtor and 12 Filed: 08/20/12 Entered: 08/20/12 12:17:41 37

Case: 11-31376

Doc# 765

Page 12 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

Citibank entered into interim cash collateral orders that provided Howrey access to Citibanks cash collateral to fund operations and pay administrative expenses. The Trustees appointment coincided with the expiration of the Debtors cash collateral authority and budget with Citibank, requiring immediate negotiations with Citibank and its counsel to implement an extension of cash collateral usage to prevent interruption in the Debtors operations. The Trustee and Citibank successfully reached interim extensions of the cash

collateral budget to fund immediate operational costs. On December 9, 2011, the Trustee entered with Citibank a Stipulation Extending Chapter 11 Trustees Use of Cash Collateral, which was approved by the Bankruptcy Court by order dated December 13, 2011. Under the terms of the stipulation, the Trustee has continued to administer the Howrey estate using cash collateral by consent from Citibank. The Debtors ability to use Citibanks cash collateral remains central to the successful administration of this case. Accordingly, the Trustee and his professionals dedicate significant time and resources to working with Citibank to ensure the Debtors continued access to cash collateral. The Trustee has reached numerous agreements on a series of weekly and monthly interim stipulations and revised budgets that have provided for the Debtors continued use of cash collateral. As of the filing of this report, the Trustee presented and Citibank approved an interim cash collateral budget extension through September 30, 2012. In addition to interim extensions of cash collateral, as part of the Trustees longer term plan for the recovery and monetization of estate assets, the Trustee is negotiating the terms of a proposed final cash collateral order with Citibank that will provide long term access to cash collateral, eliminating the need and cost of

Case: 11-31376

Doc# 765

13 Filed: 08/20/12 Entered: 08/20/12 12:17:41 37

Page 13 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

negotiating short-term extensions. Once completed, the proposed final order will be submitted to the Bankruptcy Court for approval. B. Disposition of Records of Former Howrey Clients

Howrey entered bankruptcy with approximately 220,000 boxes of documents located in various physical locations around the globe as well as hundreds of terabytes of electronic files of former clients. The physical records were stored primarily at twelve different third-party

facilities across the United States and in foreign jurisdictions. Electronic records were stored primarily on Howreys servers and administered by Howrey staff. When Howrey vacated its headquarters offices in Washington, DC, Howrey staff cleared each office and gathered client records and files to ensure their safe keeping and maintenance pending appropriate disposition. The Trustee, among his first major undertakings, proposed and obtained Bankruptcy Court approval to carry out a comprehensive client files disposition protocol. This protocol, among other measures, called for written and publication notice to former Howrey clients regarding the existence of physical and electronic records, provided the opportunity for former clients to retrieve their files and, finally, in the case of unclaimed or expressly abandoned client files, authorized the secure destruction of those records. All of this was accomplished after extensive research and analysis of the applicable codes and canons of professional responsibility governing the disposition and/or return of client records. Since the Bankruptcy Court granted approval of the Trustees proposed client records procedures on March 2, 2012, the Trustee and Howreys staff have implemented the procedures, including mailing the court approved notice and request form to over 10,000 former clients. In addition, the Trustee published the court-approved notice in the National Edition of the Wall Street Journal on May 8, 2012.

Case: 11-31376

Doc# 765

14 Filed: 08/20/12 Entered: 08/20/12 12:17:41 37

Page 14 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

To date, the Trustee has received approximately 850 responses from former Howrey clients directing disposition of their physical and electronic records. Approximately 500 former clients have requested files. Pursuant to the Trustees procedure for cost-sharing, the estate has invoiced former clients approximately $50,000 to help cover the costs of the client files disposition. Notwithstanding this progress, a recent complication is hindering the client file return process. On June 28, 2012, significant structural damage was sustained at one of Recall North Americas (Recall) warehouses in Landover, Maryland. Recall is Howreys largest record storage vendor. A substantial section of the warehouse roof collapsed, compromising a

significant number of stored documents and exposing them to the elements. Recall has informed the Trustee that approximately 60,000 boxes of documents belonging to Howreys estate were impacted by the collapse. As of the date of this First Interim Report, Recall is still determining the scope of damage and when, if ever, the documents will be recovered. The Trustee, his professionals and Howreys specialized wind-down staff continue to carry out the client file disposition plan. If a former client requests the return of files that reside in the collapsed warehouse, Recall will inform the client during the document transfer process. Subject to the impact of the Recall facility collapse on specific client files, the Trustee anticipates completion of the transfer and disposition of client files by the end of February 2013. C. Foreign Operations 1. United Kingdom

Howreys wholly owned United Kingdom partnership (Howrey UK) operated Howreys London and Paris offices. Howrey UK lost its registration with the Register of

Companies before the Trustees appointment and is not currently a party to any insolvency liquidation or wind-down proceedings. Nevertheless, Howrey UK faces asserted unpaid

Case: 11-31376

Doc# 765

15 Filed: 08/20/12 Entered: 08/20/12 12:17:41 37

Page 15 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

creditors claims and holds unadministered assets, including funds held in bank accounts and uncollected accounts receivable. The Trustee has consulted with UK counsel regarding options for the liquidation of Howrey UK and determined that Howrey UK should be placed in a separate insolvency proceeding under UK law. On August 6, 2012, the Bankruptcy Court approved the Trustees retention of the Eversheds law firm as his UK counsel to facilitate the commencement of proceedings to restore Howrey UKs registration and provide for the wind-down of Howrey UK through a court appointed liquidator. The Trustee anticipates these actions will take two to three months and will result in Howrey UKs orderly administration by a separate UK liquidator. Although Howrey has a right to any surplus assets remaining upon the satisfaction of Howrey UKs creditors and related administrative expenses, at this time the Trustee is not able to predict if, or when, Howrey will receive any funds from the liquidation of Howrey UK. 2. Belgium

Prior to the Trustees appointment, Belgium authorities appointed Mr. Marc Dal as the official administrator to conduct the liquidation of Howreys Belgium based assets and liabilities. Mr. Dal continues to liquidate Howreys Belgium assets and administer claims related to Howreys Belgium operations. The Trustee and Mr. Dal regularly communicate to coordinate these liquidation activities and exchange information and data to support each others efforts. 3. Germany

Certain creditors of Howreys German offices initiated secondary insolvency proceedings against Howrey in Germany. A German court appointed Mr. Daniel F. Fritz as the liquidator for Howreys German assets for the benefit of creditors with claims relating to Howreys former offices in Germany. The Trustee and Mr. Fritz regularly communicate to coordinate these liquidation activities and exchange information and data to support each others efforts. 16 Filed: 08/20/12 Entered: 08/20/12 12:17:41 37

Case: 11-31376

Doc# 765

Page 16 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

V.

ASSET MANAGEMENT The Debtors primary assets include (i) outstanding accounts receivable, (ii) equipment,

art work and other personal property, (iii) interests in pending contingency fee matters, and (iv) potential litigation claims. Each asset category is addressed below. A. Asset Recovery 1. Accounts Receivable

The Trustee has funded administration of the Howrey estate primarily with proceeds collected from prepetition accounts receivable with the consent of Citibank, which asserts a lien on these proceeds as cash collateral. As noted, the Trustee retained professionals to assist in collections efforts, including On-Site Associates LLC and the Adler Law Firm. To increase the efficiency of the collections process, the Trustee also developed a collections settlement protocol whereby the Bankruptcy Court pre-approved settlement parameters and guidelines for accounts receivable. The Bankruptcy Court approved these settlement procedures and guidelines on March 16, 2012. To date, the Trustees efforts have recovered over $5,000,000 in account receivable collections. These collection efforts continue, with the estate still holding millions of dollars in outstanding accounts for collection. However, as collectable accounts are liquidated, the

remaining accounts will increasingly represent the most difficult collection targets. Accordingly, the Trustee and his professionals have made the aggressive collection of accounts receivable an urgent priority. The Trustee anticipates the collection of additional funds from accounts

receivable over the next several months, with collections slowing over time due to the natural collection cycle. Certain of the accounts receivable to be collected are currently in arbitration proceedings pending in venues across the United States and likely will take significantly longer

Case: 11-31376

Doc# 765

17 Filed: 08/20/12 Entered: 08/20/12 12:17:41 37

Page 17 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

to be resolved through the arbitration process. These matters are being handled by the Adler Law Firm and other co-counsel as necessary. 2. Contingency Fee Interests

The Debtors interests in various contingency fee cases represent some of the estates most significant assets, including those matters commonly referred to as the Milk cases and the Hispanic Farmers cases, among others. The Trustee and his professionals have aggressively pursued the advancement and collection of these contingency fee interests. a) Milk Antitrust Litigation

Prior to Howreys vote of dissolution, Howrey represented plaintiffs in two class action cases alleging violations of the antitrust laws. Shortly after the Howrey Dissolution Committee was established but prior to the time that Howreys involuntary bankruptcy proceedings were initiated, the former Howrey partners representing the class plaintiffs in these cases left Howrey and joined the law firm of Baker Hostetler, LLP (BH), taking these two class action cases and the clients owning such cases, among other cases and clients, with them to BH. An agreement (the Transfer Agreement) was reached at that time between BH, on the one hand, and the Dissolution Committee for and on behalf of Howrey, on the other, with respect to the allocation between BH and Howrey of attorneys fees and expenses that may be awarded by courts in connection with any future recoveries in these two class action cases. In the first class action case, Allen v. Dairy Farmers of America, Case No. 5:09-cv-230 in the United States District Court for the District of Vermont (NE Milk), a settlement had been reached in principle and was pending at the time of the Transfer Agreement in March, 2011. Since that time, the settlement agreement has been fully executed, approved by the court and consummated. Of the attorneys fees and expenses awarded by the court, lead class counsel at Cohen Milstein has allocated approximately $2,400,000 to Howrey and BH collectively. The 18 Filed: 08/20/12 Entered: 08/20/12 12:17:41 37

Case: 11-31376

Doc# 765

Page 18 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

Trustee and BH have entered into an escrow agreement pursuant to which this $2,400,000 will be deposited at Citibank, N.A. under the joint control of the Trustee and BH, pending resolution of the allocation issues between them. The Trustee currently is in negotiations with BH with respect to such allocation. In the second case, In re Southeastern Milk Antitrust Litigation, Master File No. 2:08MD-1000 (SE Milk) pending in the United States District Court for the Eastern District of Tennessee, a settlement was reached with defendant Dean Foods in the early summer of 2011. Issues related to class certification, however, subsequently arose and delayed final approval of the settlement pending court appointment of separate counsel for a certain sub-class. In March, 2012, the delayed settlements (with Dean Foods, Southern Marketing Agency, Inc., and James Baird) were preliminarily approved in the aggregate amount of $145,000,000. Those settlements received final approval from the court on May 15, 2012. The settlements are structured with the payment of $65,000,000 to be made upon consummation and the balance to be paid pro-rata each year over the next four years (through 2016). On July 11, 2012, the court issued its order approving attorneys fees and expenses to all class counsel in the total amount of approximately $48,000,000 in fees and $7,400,000 in expenses. Bob Abrams, one of Howreys former partners who departed Howrey for BH, has been approved by the Court to make the allocation of attorneys fees and expenses among the various law firms acting as counsel for the plaintiffs. The allocation of fees and expenses for the SE Milk case has not yet been determined. The Trustee anticipates that any funds allocated collectively to Howrey/BH will be the subject to negotiations between the Trustee and BH (including, without limitation, all issues involving the March 2011 Transfer Agreement). Even

Case: 11-31376

Doc# 765

19 Filed: 08/20/12 Entered: 08/20/12 12:17:41 37

Page 19 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

without negotiation, however, the Trustee anticipates the receipt of a substantial recovery in fees and expenses from the SE Milk case. The plaintiffs case against the remaining defendant, Dairy Farmers of America, is currently set for trial in Tennessee in November 2012, although the defendant has sought permission to appeal the class certification order to the Sixth Circuit in advance of trial. Accordingly, any recovery from the remaining defendants in the SE Milk case is subject to the results and delays of the pending appeal request, trial and other factors. The Trustee is taking all actions to closely monitor the case and protect the estates interest in all potential recoveries from the SE Milk matters. b) Hispanic Farmers Litigation

Prior to bankruptcy, Howrey represented several hundred individual Hispanic farmers with claims against the United States Department of Agriculture for discrimination based on race. Howrey represented named farmers in a putative class action case called Garcia v. Vilsack, case number 00-CV-2445 and the companion case of Cantu v. United States, case number 11CV-00541, both in the United States District Court for the District of Columbia. The plaintiffs claim liability of over $1 billion. Howrey accepted the representation of these clients in these cases on a contingent fee basis. By the time of the bankruptcy filing, Howrey had invested approximately $30 million of time expense and out of pocket expenses in the prosecution of these cases. Because Howreys malpractice insurance coverage expired on December 31, 2011, and the Howrey bankruptcy estate no longer employed any lawyers, the Trustee was compelled to file motions to withdraw as counsel from the two cases in the U.S. District Court for the District of Columbia. Those motions were followed by the Trustees limited joinder of a motion in the Bankruptcy Court to reject the engagement contracts with the Hispanic farmers. To protect the 20 Filed: 08/20/12 Entered: 08/20/12 12:17:41 37

Case: 11-31376

Doc# 765

Page 20 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

estates contingent fee interest in the cases, the Trustee opposed the efforts of the Official Committee of Unsecured Creditors to reject the engagement contracts outright. Instead, the Trustee argued for and obtained a Bankruptcy Court order that rejected the contracts while preserving the rights of the Howrey estate to pursue its claims to any potential future recoveries or funds established for the benefit of the aggrieved Hispanic farmers, based on Howreys decade long efforts and contingent fee investment in the cases. Given the relatively large size of the investment made by Howrey in these Hispanic farmer cases, the Trustee and his professionals have spent an appropriate amount of effort analyzing and evaluating the cases and trying to secure new firms to undertake the representation of the Hispanic farmers. A team of law firms and consultants is now representing various plaintiff Hispanic farmers in these matters. The Trustee is coordinating and supporting their efforts. At this time, it is impossible to estimate with any certainty what recovery may result from the litigation or other actions the Trustee may take to recover compensation for the substantial efforts and expense incurred by Howrey and the Howrey estate for the benefit of these Hispanic farmers. The Trustee will continue to safeguard Howreys investment and

interests in any right to compensation and recoveries. c) The Online DVD Rental Antitrust Litigation

Howrey also continues to have a contingent fee interest in an antitrust class action formally known as In re: Online DVD Rental Antitrust Litigation (Case No. 4:09-md-02029PJH, United States District Court for the Northern District of California). The Online DVD Rental Antitrust Litigation is colloquially known as Netflix/Wal-Mart, named after two target defendants. Like the Milk cases, Howrey lawyers working on Netflix/Wal-Mart moved from Howrey to BH prior to the commencement of the involuntary bankruptcy proceeding.

Case: 11-31376

Doc# 765

21 Filed: 08/20/12 Entered: 08/20/12 12:17:41 37

Page 21 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

The Trustee continues to monitor Netflix/Wal-Mart closely. Since his appointment, the following activity has occurred in the case. First, Netflix won dismissal of the lawsuit on summary judgment in November 2011. Plaintiffs timely appealed the district courts summary judgment ruling to the Ninth Circuit on December 20, 2011 (Case No. 11-18034). Briefing is complete but, based on the average time between appeal and resolution in the Ninth Circuit, the Trustee does not expect a ruling for at least another twelve months. The Trustee continues to monitor the appeal, but cannot estimate the likelihood of success or the amount of money, if any, that Howrey may recover by virtue of its representation of the plaintiffs class against Netflix. Second, the district court gave final approval to the Plaintiffs settlement of claims against Wal-Mart for $27,250,000 on March 14, 2012, with $6,812,500 of the award being paid as attorneys fees and $1,700,000 in expenses to class counsel. How much of this money would be paid to Howrey has not been resolved. However, the entire attorneys fees award is also pending in the Ninth Circuit, as multiple objectors have appealed the district courts approval of the attorneys fees award as excessive and/or prohibited by the Class Action Fairness Act (CAFA). Briefing of this appeal has not yet begun. Of the various objectors, it appears the first opening brief is due in late August 2012, with the remaining briefs due in early September 2012. Plaintiffs consolidated response to the objections is currently due October 9, 2012. As with the Netflix appeal, at this time the Trustee does not expect a ruling on the various Wal-Mart attorneys fees appeals within the next twelve months. In the event the attorneys fees award is upheld, however, the Trustee expects a significant recovery to the Howrey estate. d) Other Contingency Fee Cases

The Trustee continues to actively monitor several other contingency fee litigation matters in which Howrey maintains an interest for collection opportunities. For example, Howrey has recently earned a contingency fee interest in insurance related litigation asserted by Howreys 22 Filed: 08/20/12 Entered: 08/20/12 12:17:41 37

Case: 11-31376

Doc# 765

Page 22 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

former client MidAmerican Energy Company (the MEC Cases).

Prior to Howreys

dissolution, the MEC Cases were transitioned to Perkins Coie LLP. MEC and Perkins Coie have now resolved this litigation through confidential settlements, resulting in contingency fees to be shared between Howrey and Perkins Coie. The Trustee and Perkins Coie have successfully negotiated an agreed division of the contingency fees between Howrey and Perkins on a pro rata basis calculated from the professional fees each firm billed on the matter, resulting in a recovery of over $600,000 to the Howrey estate. The Trustee is documenting this arrangement with Perkins Coie and anticipates filing a motion for Bankruptcy Court approval of the proposed agreement in the next two weeks. 3. Equipment and Other Assets

The Trustee has undertaken to preserve and liquidate furniture, equipment and other assets of the estate. With the down-sizing of the Howrey office space, the Trustee anticipates liquidating the majority of Howreys remaining office furniture and peripheral equipment in the next 30 days pursuant to the de minimis asset sale procedures approved by the Bankruptcy Court. The Howrey estate also holds surplus server and computer equipment from the winddown of the data centers. The Trustee is preserving this equipment until all former client and Howrey data is safely preserved in other forms and is then wiped from the equipment such that it cannot be retrieved. The Trustee has requested initial offers to purchase this equipment and is assessing means to wipe the data stored on it. The Trustee anticipates these procedures to be accomplished and a sale of this equipment before year end. B. Claims Investigation, Analysis and Recovery

In addition to the expected significant proceeds from Howreys interest in the various contingency fee matters discussed above, creditor recoveries in this bankruptcy case will be significantly determined by the resolution of the estates potential claims against third parties, 23 Filed: 08/20/12 Entered: 08/20/12 12:17:41 37

Case: 11-31376

Doc# 765

Page 23 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

including those against former Howrey partners and their successor law firms, potential breach of contract actions and avoidance actions under the Bankruptcy Code. The Trustee and his professionals are developing and pursuing all the estates potential litigation claims. 1. Preference and Fraudulent Transfer Litigation

Evidence available to and marshaled by the Trustee indicates that various former partners of Howrey received payments and distributions either at a time when Howrey was insolvent and/or otherwise in excess of amounts properly distributable at the time they were made. Such over-distributions likely constituted fraudulent transfers, breaches of fiduciary duty, and breaches of Howreys partnership agreement or are otherwise actionable. The Trustees financial and legal advisors are completing a comprehensive analysis of these potential claims. The Trustee anticipates that settlement proposals to resolve these claims will be forthcoming in the coming months and that barring amicable resolutions, litigation will likely be commenced seeking recoveries on such claims for the estate. In addition, Howrey made payments to certain creditors in the ninety-day period preceding the Petition Date that the Trustee may recover as preferences under Bankruptcy Code 547. The Trustees consultants and legal team have completed an initial analysis of the potentially preferential payments and anticipate sending out demand letters to preference recipients within the next thirty days to initiate collection for the benefit of the Howrey estate. 2. Unfinished Business Claims

The Trustee has been investigating and gathering information related to Howreys former representation of clients in matters that were unfinished at the time that former Howrey partners departed the firm taking such unfinished business with them to successor law firms. In July 2012, the Trustee filed an omnibus motion for authority to issue Federal Rule of Bankruptcy Procedure 2004 (Rule 2004) subpoenas to approximately seventy law firms that 24 Filed: 08/20/12 Entered: 08/20/12 12:17:41 37

Case: 11-31376

Doc# 765

Page 24 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

may have received profits from Howreys unfinished business. The Bankruptcy Court granted this motion and the Trustee is in the process of contacting and/or serving such law firms with subpoenas for the production of certain documentation, data and information related to Howreys unfinished business. This discovery will allow the Trustee and his professionals to evaluate potential causes of action, including unfinished business related claims. The Trustee anticipates the expeditious conclusion of the claim investigation process and the immediate pursuit, of all viable claims through either settlement or litigation. 3. Other Potential Claims and Litigation

The Trustee has also been evaluating various contracts entered into by the Debtor prepetition which have been breached by the respective counter-parties. The Trustee and his professionals continue to undertake legal research, document review and analysis of these potential claims and anticipate arriving at evaluations and assessments related to such claims in the coming months, after which appropriate follow up action will be taken. Moreover, the Trustee and his professionals are currently investigating various acts and events, that occurred both before the Petition Date and during the gap period prior to the order for relief, that may have resulted in damages to the estate. It is anticipated that Rule 2004 examinations and subpoenas will be sought in the near future with respect to former lawyers and employees of the Debtor in order to determine and assess the viability of any claims for damages as a result of such actions or transactions. C. Asset Disposition

The Trustees primary goal is to maximize the value of the Howrey estate. This includes disposing of assets of the estate in a manner that ensures their highest value.

Case: 11-31376

Doc# 765

25 Filed: 08/20/12 Entered: 08/20/12 12:17:41 37

Page 25 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

1.

Art Collection Sales

Prior to the Trustees appointment, Howrey placed its remaining art work assets with five separate art dealers, brokers and storage facilities in California, Illinois and Washington, D.C. The Trustee is consolidating the number of third-party vendors responsible for the disposition of Howreys art collection. One of these vendors, Bonhams, is currently assessing the remaining art assets and will present a recommended course of action to the Trustee that will maximize the recovery for these assets. The Trustee anticipates implementing a comprehensive sales process for the remaining art assets in the next thirty to sixty days. 2. Other Liquidations and Settlements

The Trustee regularly evaluates proposals by claimants to settle disputes with the Howrey estate on terms that benefit Howreys creditors. In two cases, Howrey entered settlements with storage facilities to abandon the contents of those facilities to the storage vendors in exchange for those vendors abandoning both pre-petition and post-petition claims for storage costs. The Trustee obtained Bankruptcy Court approval of the settlements with Extra Space Management, Inc. on March 2, 2012, and with Ortiz Brothers Moving and Storage on July 2, 2012. D. Defense of Claims 1. Proofs of Claim

The Trustee continues to monitor proofs of claim as they are received. The general bar date for proofs of claim passed on October 11, 2011. Extensions of the bar date were granted for certain plaintiffs in the WARN Act litigation described below and Citibank, pursuant to the terms of cash collateral orders approved by the Bankruptcy Court. As part of the plan formulation and confirmation process and before any distributions to general creditors, the Trustee will complete a full analysis of all asserted claims and will file objections where appropriate to ensure that no claims are improperly allowed.

Case: 11-31376

Doc# 765

26 Filed: 08/20/12 Entered: 08/20/12 12:17:41 37

Page 26 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

2.

The WARN Act and Warner Investments Adversaries

On April 12, 2011, a former Howrey employee named Stephanie Langley brought a putative class action against Howreys estate alleging violations of the WARN Act. This case is pending before the Bankruptcy Court as adversary proceeding 11-03065. Pursuant to a June 28, 2012 order, the bar date for filing of WARN Act claims on behalf of the Langley putative class was extended to October 1, 2012, and the Court indicated that no further extensions would be granted absent a written showing of cause. A status conference is scheduled in the Langley WARN adversary for October 15, 2012, at which time the Trustee and counsel for the plaintiffs will report the status and plan for advancing the resolution of the claims at issue. Prior to the Trustees appointment, the Debtors former counsel commenced litigation arising from a non-residential lease agreement against Warner Investments, L.P. (Warner) which is currently pending before the Bankruptcy Court in adversary proceeding 11-03170. Warner has asserted claims against the estate and filed requests for payment of administrative rent. In light of the current cash position of the estate, the Trustee and Warner have agreed to stay the adversary proceeding and Warners administrative expense motion several times. Most recently, the parties agreed to extend the stay to February 21, 2013. VI. RECOVERY TO CREDITORS AND A CHAPTER 11 PLAN OF LIQUIDATION The benefit of liquidating the Howrey estate in chapter 11, rather than chapter 7, is to allow the flexibility and tools provided by the plan formulation and confirmation process for the resolution of the estates potential litigation claims. It is too early in the case for the Trustee to predict the recovery that will ultimately be paid to all creditors. However, the Trustee at this time believes that ultimately there will be sufficient estate assets to satisfy all potential

Case: 11-31376

Doc# 765

27 Filed: 08/20/12 Entered: 08/20/12 12:17:41 37

Page 27 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

administrative 1 and secured claims in full and provide a recovery to priority and general unsecured creditors. The Trustee presently holds approximately $1,300,000 in cash and significantly more in unliquidated and contingent assets, including accounts receivable, potential litigation claims, contingency fee interests and other assets described herein. Most, if not all, of the current cash on hand and many of these assets may constitute the collateral of Citibank, which has allowed the Trustee to use its cash collateral pursuant to interim cash collateral orders, stipulations and related budgets. Accordingly, the Trustee anticipates having sufficient funds to pay ongoing administrative costs subject to budget limits. The ultimate recovery to secured and unsecured creditors will depend primarily on two factors: (i) the proceeds the Trustee recovers from the Debtors interest in the contingency fee cases, including the Milk cases; and (ii) the recoveries the Trustee obtains from the potential litigation claims described above. As the Trustee continues to evaluate the assets of the estate, including potential litigation claims, the full scope and potential distributions from the Howrey estate will become more predictable within certain ranges. Until then, creditors and parties-in-interest benefit from a careful approach that maximizes the value for the estate. The Trustee will supplement this report with additional information as the case progresses.

In addition to ongoing professional and operational expenses, the estate faces potential administrative expense claims in excess of $10 million from landlords and other potential claimants. While these administrative expense claims may be in dispute, if allowed, they could be entitled to the same priority as any other claims allowed under Bankruptcy Code 503(b). In that event, there are currently insufficient liquid assets to immediately satisfy all of those administrative expense claims in full.

Case: 11-31376

Doc# 765

28 Filed: 08/20/12 Entered: 08/20/12 12:17:41 37

Page 28 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

Dated:

August 20, 2012 /s/ Allan B. Diamond, Trustee Allan B. Diamond Chapter 11 Trustee of Howrey LLP and Howard D. Ressler, Esq. (pro hac vice) Stephen T. Loden, Esq. (pro hac vice) Jason M. Rudd, Esq. (pro hac vice) Christopher R. Murray, Esq. (pro hac vice) DIAMOND MCCARTHY LLP 909 Fannin, 15th Floor Houston, TX 77010 Telephone: 713-333-5100 Facsimile: 713-333-5199 hressler@diamondmccarthy.com sloden@diamondmccarthy.com jrudd@diamondmccarthy.com cmurray@diamondmccarthy.com Counsel for Allan B. Diamond, Chapter 11 Trustee for Howrey LLP Eric A. Nyberg, Esq. (Bar No. 131105) KORNFIELD, NYBERG, BENDES & KUHNER, P.C. Chris D. Kuhner, Esq. (Bar No. 173291) 1970 Broadway, Suite 225 Oakland, CA 94612 Telephone: 510-763-1000 Facsimile: 510-273-8669 e.nyberg@kornfieldlaw.com c.kuhner@dornfieldlaw.com Local Counsel for Allan B. Diamond, Chapter 11 Trustee for Howrey LLP

Case: 11-31376

Doc# 765

29 Filed: 08/20/12 Entered: 08/20/12 12:17:41 37

Page 29 of

1 2 3 4 5 6

CERTIFICATE OF SERVICE __X__ (CM/ECF) The document was electronically served on the parties to this action via the mandatory United States Bankruptcy Court of California CM/ECF system upon filing of above described document.: SEE ATTACHED SERVICE LIST __X__ (ELECTRONIC MAIL SERVICE) By electronic mail (e-mail) the above listed document(s) without error to the email address(es) set forth below on this date. SEE ATTACHED SERVICE LIST

7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Case: 11-31376 Doc# 765 30 Filed: 08/20/12 Entered: 08/20/12 12:17:41 37 /s/ Jason M. Rudd Jason M. Rudd __ __ (FACSIMILE) That I served a true and correct copy of the above-referenced document via facsimile, to the facsimile numbers indicated, to those people listed on the attached service list, on the date above written. __ __ (COURIER SERVICE) By providing true and correct copies of the above referenced documents [with copies of the supporting detailed invoices/attorney time records for the Final Fee Application] via courier delivery, to the following on or about ________________: __X__ (UNITED STATES MAIL) By depositing a copy of the above-referenced documents for mailing in the United States Mail, first class postage prepaid, at Houston, Texas, to the parties listed on the Service List attached hereto, at their last known mailing addresses, on August 20, 2012. SEE ATTACHED SERVICE LIST __ __ (OVERNIGHT COURIER) By depositing a true and correct copy of the above referenced document for overnight delivery via Federal Express, at a collection facility maintained for such purpose, addressed to the parties on the attached service list, at their last known delivery address, on the date above written.

Page 30 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Case: 11-31376 Doc# 765 31 Filed: 08/20/12 Entered: 08/20/12 12:17:41 37

Page 31 of

1 2 3 4 5 6

VIA CM/ECF: United States Trustee Minnie Loo, Esq. Donna S. Tamanaha, Esq. Office of the U.S. Trustee 235 Pine Street. 7th Floor San Francisco, CA 94104-3484 Email: Minnie.Loo@usdoj.gov Email: Donna.S.Tamanaha@usdoj.gov

Chapter 11 Trustee 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Case: 11-31376 Doc# 765 Debtors Counsel Counsel for the Chapter 11 Trustee

Allan B. Diamond Diamond McCarthy, LLP Two Houston Center 909 Fannin Street, Suite 1500 Houston, Texas 77010 Email: adiamond@diamondmccarthy.com Diamond McCarthy, LLP Howard D. Ressler, Esq. Email: hressler@diamondmccarthy.com Stephen T. Loden, Esq. Email: sloden@diamondmccarthy.com Jason M. Rudd, Esq. Email: jrudd@diamondmccarthy.com Kornfield Nyberg Bender & Kuhner P.C. Eric Nyberg Email: e.nyberg@kornfieldlaw.com Chris D. Kuhner Email: c.kuhner@kornfieldlaw.com Wiley Rein LLP H. Jason Gold Valerie P. Morison Dylan G. Trache Email: jgold@wileyrein.com Email: vmorrison@wileyrein.com Email: dtrache@wileyrein.com Murray & Murray Robert A. Franklin Craig M. Prim Jenny Lynn Fountain Email: rfranklin@murraylaw.com Email: cprim@murraylaw.com

32 Filed: 08/20/12 Entered: 08/20/12 12:17:41 37

Page 32 of

1 2 Duane Morris LLP 3 4 5 6 Murray & Murray 7 8 9 10 11 12 13 14 15 Counsel for The Irvine Company, LLC 16 17 18 19 Counsel for Creditor Protiviti, Inc. 20 21 Counsel for Creditor Oracle America, Inc. 22 23 Counsel for Creditor U.S. Bank, N.A., 24 25 26 Case: 11-31376 Doc# 765 Counsel for Creditor Ctitbank, N.A. Official Committee of Unsecured Creditors Law Offices of Latham & Watkins

Email: jfountain@murraylaw.com

Geoffrey A. Heaton, Esq. Email: gheaton@duanemorris.com Aron M. Oiner, Esq. Email: roliner@duanemorris.com Kimberly A. Posin, Esq. Email: kim.posin@lw.com Craig M. Prim, Esq. Email: cprim@murraylaw.com Robert A. Franklin, Esq. Email: rfranklin@murraylaw.com Jenny L. Fountain, Esq. Email: jlfountain@murraylaw.com

Whiteford, Taylor & Preston LLP Bradford F. Englander, Esq. Email: benglander@wtplaw.com John F. Carlton, Esq. Email: jcarlton@wtplaw.com Justin P. Fasano, Esq. Email: jfasano@wtplaw.com

Allen Matkins, et al. Email: mgreger@allenmatkins.com Paul, Weiss, Rifkind, Wharton Garrison Larry Peitzman, Esq. Email: lpeitzman@pwkllp.com Pachulski, Stang, Ziehl & Jones John D. Fiero, Esq. Email: jfiero@pszjlaw.com Buchalter Nemer Shawn M. Christianson, Esq. Email: schristianson@buchalter.com Perkins Coie LLP &

33 Filed: 08/20/12 Entered: 08/20/12 12:17:41 37

Page 33 of

1 2 3 4 5 6 7

as Trustee

David J. Gold, Esq. Email: dgold@perkinscoie.com Perkins Coie LLP Alan D. Smith, Esq. Email: adsmith@perkinscoie.com Trepel McGrane Greenfield LLP Maureen A. Harrington, Esq. Email: mharrington@tmcglaw.com Christopher D. Sullivan, Esq. Email: csullivan@tgsdlaw.com Allen, Matkins, Leck, Gamble Mallory William W. Huckins Email: whuckins@allenmatkins.com and

Counsel for Attorneys Liability Assurance Society, Inc., A Risk Retention Group

Counsel for Creditors Advanced Discovery LLc, Give Something Back, Inc., Jan Brown & Associates, Kent Daniels & Associates, Inc., L.A. Best Photocopies, Inc., Western Messenger Service, Inc. Counsel for BP/CGCENTER I, LLC

8 9 10 Counsel for Creditor Warner Investment, L.P. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Case: 11-31376 Doc# 765 Counsel for Creditor Stephanie Langley Counsel for Creditor Stephanie Langley Counsel for Creditor Hines REIT 321 North Clark Street, LLC Counsel for Creditor Iron Mountain Information Management Inc. Counsel for Creditor Dewey & LeBoeuf LLP

Luce, Forward, Hamilton & Scripps Michael A. Isaacs, Esq. Email: misaacs@luce.com Email: gkleiner@luce.com Dewey and LeBoeuf Paul S. Jasper, Esq. Email: pjasper@dl.com Bartlett, Hackett and Feinberg Frank F. McGinn, Esq. Email: ffm@bostonbusinesslaw.com

DLA Piper LLP Frank T. Pepler, Esq. Email: frank.pepler@dlapiper.com

Outten and Golden LLP Rene S. Roupinian, Esq. Email: rst@outtengolden.com Law Offices of James D. Wood James D. Wood, Esq. Email: jdw@jdwoodlaw.com

34 Filed: 08/20/12 Entered: 08/20/12 12:17:41 37

Page 34 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

Counsel for Creditor Pension Benefit Guaranty Corp.

Office of the Chief Counsel Lawrence F. Landgraff, Esq. Email: landgraff.larry@pbgc.gov Schnader Harrison Segal and Lewis Melissa Lor, Esq. Email: MLor@Schnader.com

Counsel for Interested Party Connecticut General Life Insurance Company

Counsel for Interested Party Ad Hoc Committee of Certain Former Howrey Partners

MacConaghy and Barnier John H. MacConaghy, Esq. Email: macclaw@macbarlaw.com Monique Jewett-Brewster, Esq. Email: mjewettbrewster@macbarlaw.com McGrane LLP William McGrane, Esq. Email: william.mcgrane@mcgranellp.com

Counsel for Creditors Advanced Discovery LLC, Give Something Back, Inc, Jan Brown And Associates, Kent Daniels and Associates Inc., L.A. Best Photocopies, Inc., Western Messenger Service, Inc. Counsel for Interested Party Connecticut General Life Insurance Co. Counsel for Creditor Knickerbocker Properties, Inc. XXXIII

Melissa Lor Email: mlor@schnader.com Seyfarth Shaw LLP Scott Olson, Esq. Email: solson@seyfarth.com

Counsel for Creditor Banc of America Leasing & Capital, LLC

Law Offices of Serlin and Whiteford Mark A. Serlin, Esq. Email: mserlin@globelaw.com Bankruptcy & Collections Division Kimberly Walsh, Esq. Email: bk-kwalsh@oag.state.tx.us Ballard Spahr Andrews and Ingersoll Rebecca J. Winthrop, Esq. Email: WinthropR@ballardspahr.com Penny M. Costa, Esq. Email: costap@ballardpahr.com

Counsel for Creditor Texas Comptroller of Public Accounts

Counsel for Creditor 200 S. Main Street Investors, LLC

Counsel for Creditor Citibank, N.A.

Peitzman Weg LLP Larry Peitzman, Esq.

Case: 11-31376

Doc# 765

35 Filed: 08/20/12 Entered: 08/20/12 12:17:41 37

Page 35 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Case: 11-31376 Doc# 765 VIA U.S. MAIL: Richard Burdge, Esq. The Burdge Law Firm PC 500 S Grand Ave Ste 1500 Los Angeles, CA 90071 VIA EMAIL: Counsel for Creditor Citibank, N.A. Counsel for Amy J. Fink

Email: lpeitzman@peitzmanweg.com Jones Day Robert A. Trodella Email: rtrodella@jonesday.com

Paul, Weiss, Rifkind, Wharton & Garrison Kelley A. Cornish, Esq. Email: kcornish@paulweiss.com Diane Meyers, Esq. Email:dmeyers@paulweiss.com Jacob J. Adlerstein, Esq. Email: jadlerstein@paulweiss.com Ballard Spahr LLP Matthew Moncur, Esq. Email: moncurm@ballardspahr.com EMC Corporation c/o Receivable Management Services Steven Sass, Esq. Email: steven.sass@rmsna.com Ronald Rowland, Esq. Email: Ronald.rowland@rmsna.com Olin Corporation S. Christian Mullgardt Email: scmullgardt@olin.com

36 Filed: 08/20/12 Entered: 08/20/12 12:17:41 37

Page 36 of

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Case: 11-31376 Doc# 765 37 Filed: 08/20/12 Entered: 08/20/12 12:17:41 37 Kyle Everett Development Specialists, Inc. 235 Pine Street, Suite 1150 San Francisco, CA 94104 Guy Davis Protiviti Inc. 1051 East Cary Street, Suite 602 Richmond, VA 23219 George E. Shoup, III Development Specialists, inc. 6375 Riverside Drive, Suite 200 Dublin, OH 43017-5373 Matura Farrington Staffing Services, Inc. 700 So. Flower Street, Suite 2505 Los Angeles, CA 90017 IKON Office Solutions Recovery & Bankruptcy Group 3920 Arkwright Road, Suite 400 Macon, GA 31210 EMC Corporation c/o RMS Bankruptcy Recovery Services Attn: President or General/Managing Agent P.O. Box 5126 Timonium, MD 21094-5126 Salter & Company LLC 4600 East-West Highway, Suite 300 Bethesda, MD 20814 County of Loudoun Virginia Belkys Escobar 1 Harrison St., S.E. 5th Fl. Leesburg, VA 20175-3102 Jeffrey C. Wisler, Esq. Connolly Bove Lodge & Hutz LLP 1007 North Orange Street Wilmington, DE 19899 Attorneys for Interested Party Connecticut General Life Insurance Company

Page 37 of