Eight months after the surprise collapse of Heenan Blaikie LLP, the defunct national law firm is facing lawsuits from former legal assistants, lawyers and other ex-employees demanding hundreds of thousands of dollars in severance pay and punitive damages.
After the February implosion of the firm, which had offices across Canada and was once home to former prime ministers Jean Chrétien and Pierre Trudeau, most of Heenan Blaikie's former partners have found jobs at former competitors or in newly founded spinoff firms. While many hired on their former legal assistants as well, some employees were left jobless.
As the firm faces the lawsuits, ex-partners are also awaiting word from a committee of former senior partners that is sifting through Heenan Blaikie's assets and liabilities. This wind-up process is determining how much of the hundreds of thousands of dollars in capital each partner put into the firm will get back – if any.
Among the lawsuits Heenan Blaikie faces are claims from a patent agent, Marcelo Sarkis, demanding $1-million for wrongful dismissal, and another from a non-equity partner, Rhonda Levy, who alleges she is owed more than $100,000.
George Wesley (Wes) Roberts, a professional engineer and mining industry veteran who worked for Heenan Blaikie's consulting arm, Heenan Blaikie Global Advisors, is demanding almost $250,000 in damages, including wages, severance and accrued vacation pay.
William Stearns Vaughan, a veteran mining industry lawyer who joined Heenan Blaikie in 2012 with a $600,000-a-year paycheque, claims he is owed about $65,000 in back pay and a missed bonus payment.
In court filings, both men allege senior Heenan Blaikie lawyers urged them to continue working in February, even after the law firm's partners voted to dissolve the firm, but claim they were not paid.
In a statement of defence, Heenan Blaike denies most of the allegations. It does acknowledge that Heenan Blaikie's consulting arm, Heenan Blaikie Management Ltd., owes Mr. Roberts almost $50,000 but says it is "insolvent and without funds to pay these amounts."
In Mr. Vaughan's case, the firm says it owes him nothing since he was a partner, not an employee. Although he was not required to contribute capital to the firm, the firm's defence says, Mr. Vaughan drew his income from the firm's profit.
"Heenan Blaikie will have no profits in 2014 from which to distribute partner income. Instead, Heenan Blaikie LLP will incur substantial losses in 2014, the extent of which have yet to be determined," the statement of defence reads, noting that all Heenan Blaikie partners stopped getting paid at the end of January, as the firm went into crisis.
In Toronto alone, where Heenan Blaikie had 160 employees, the firm faces lawsuits from seven former legal assistants whose claims collectively add up to more than $1-million. In some of the cases, Heenan has submitted defences arguing that plaintiffs – all women who made $50,000 to $70,000 a year – were paid what they were owed.
In court documents, some of the former assistants claim they were told by Heenan Blaikie's leadership at a January town hall meeting that the firm "had turned the corner," even though just weeks later its remaining partners would vote to dissolve it. One claims she heard rumours in January that "it was just a matter of time until Heenan sank like the Titanic," but that senior lawyers reassured her that her job was secure.
A lawyer acting for Heenan Blaikie declined to comment, as did former Toronto managing partner Norman Bacal. John Legge, a former Heenan Blaikie Vancouver partner overseeing the wind-up process, could not be reached.
Meanwhile, Heenan Blaikie is also in court seeking payment from a handful of former clients it alleges have not paid their bills. Among them is former newspaper magnate Conrad Black. Heenan Blaikie alleges he owes the firm $442,854.11 in legal bills from 2011 and 2012.
In an e-mail, Mr. Black, who served a U.S. prison sentence for fraud and obstruction of justice, declined to comment on the Heenan case in detail but went on to suggest the amount is exaggerated: "You may reasonably infer that the quantum mentioned by Heenan is afflicted by the usual elephantiasis of insolvent claimants."