Wednesday, March 13, 2013
Portland law firm recovers from bankruptcy to continue legal fight against hormone replacement drugs
A Portland law firm that fell into bankruptcy while waiting out a prolonged legal battle against a big pharmaceutical company has recovered, paid all of its debts and expects the case to be formally closed next month. After nine years of legal maneuvering, Williams Love O'Leary & Powers reached a settlement last year with Pfizer Inc. on behalf of about 500 women who allegedly developed breast cancer or other diseases as a result of using the company's hormone replacement therapy drugs. Terms of the settlement are confidential, firm partner Michael Williams said, but it was enough to pay the firm's debts. The firm filed for Chapter 11 bankruptcy in 2011 because it couldn't make payments on a bank loan during the expensive legal fight. The firm continued to operate after the filing, which provided the lawyers some breathing room. "It was a matter of time," Williams said. "We knew they'd eventually settle and it probably be enough to pay (debts), but the timing of it was the problem." Williams Love O'Leary & Powers may be the only law firm to emerge intact from a Chapter 11 reorganization, said Albert Kennedy, an attorney with Portland's Tonkon Torp firm who represented Williams and his partners. "What usually happens is Chapter 11 is almost always used to facilitate an orderly liquidation of the firm," Kennedy said. "The biggest single key was the commitment of the partners to stay together and make this work." In pursuing the Pfizer case, the firm spent $3 million in advance costs such as obtaining expert testimony, travel and other expenses, Kennedy said. The firms’s focus on complicated pharmaceutical litigation made it difficult to ride out the expense. Its cash flow from other work was enough to support daily operations, but not to pay the full amount of bank loans. Kennedy called the firm's survival a "very good result." Williams in particular is a "linchpin of the local legal community, a nationally-known tort lawyer," Kennedy said. "It's very gratifying to see them weather this storm, get their creditors paid off, the landlord paid off, and continue to provide service." The Portland firm's settlement with Pfizer was among an estimated 10,000 lawsuits brought by litigants who claimed the company's hormone-replacement drugs caused breast cancer. A June 2012 report by Bloomberg News said Pfizer had paid $896 million to resolve 60 percent of the cases. Pfizer inherited the litigation in 2009 when it bought Wyeth, which manufactured hormone-therapy drugs such as Prempro. The drug was intended to treat conditions associated with menopause.
Posted by Bill Ponath Law at Wednesday, March 13, 2013