Legal News

Details Emerge in Marc Dreier Saga, But Much Remains Unclear

By Nathan Koppel

Let’s get you up to speed on what we know about the situation involving New York City lawyer Marc Dreier. One thing’s for sure: it’s strange and murky.

First things first. Dreier, who heads the prominent, 250-lawyer Dreier LLP, was arrested Tuesday in Toronto for allegedly impersonating another individual. The alleged offense took place during a meeting between the Ontario Teachers’ Pension Plan and private-equity firm Fortress Investment Group. According to the New York Times, Dreier was accused of impersonating Michael Padfield, a lawyer for the Ontario Teachers’ Pension Plan. What’s still unclear is why Dreier was there, or what the meeting involved in the first place.

After learning of “fraudulent behavior,” Ontario Teachers’ said in a statement, “we immediately alerted the police.” The pension plan declined to elaborate, including whether it was represented by Dreier. Similarly, a statement released by Fortress says: “While visiting Ontario Teachers’ offices on Tuesday afternoon, a Fortress employee observed suspicious behavior by an individual and immediately alerted Ontario Teachers’ staff. We continue to cooperate with law enforcement.”

According to his attorney, Edward Greenspan, Dreier will plead not guilty. “The event is relatively minor,” he told us on Friday. “No money passed. Nothing actually occurred except an allegation of impersonation.” He declined to say more, citing a court order that the facts not be discussed.

After spending two days in jail in Milton, Canada, west of Toronto, Dreier was released Thursday on bail of $100,000 Canadian dollars.

Dreier LLP did not reply to repeated requests for comment. But in the wake of Dreier’s arrest, the firm rests in precarious shape, with lawyers already leaving. On Friday, Paul Traub, the co-chair of the firm’s bankruptcy department, sent a letter to clients announcing he and a group of other bankruptcy lawyers had resigned from the firm but would continue to practice together under a different name, Traub, Bonacquist & Fox LLP. “In light of recent developments, of which we were unaware until yesterday, we have resigned from Dreier LLP, effective immediately,” the letter states.

Dreier LLP is a bit of an odd duck in the world of law firms. Marc Dreier himself owns all of the equity in the firm, with other partners paid salaries that are tied in part to the amount of business they generate, according to lawyers who have worked at the firm.

Find other coverage of the situation here (Toronto Globe & Mail) and here (Above the Law).

Full post as published by Law Blog - WSJ.com on December 05, 2008 (boomark / email).