Dewey & LeBoeuf bankruptcy vet tapped for Kossoff case

A worker arrives at his office in the Canary Wharf business district in London February 26, 2014.. REUTERS/Eddie Keogh

(Reuters) - A prominent boutique bankruptcy lawyer and veteran of winding down failed law firms has a new assignment: overseeing the dissolution of a New York real estate law firm whose founder vanished last month amid a string of client lawsuits.

The U.S. Trustee in Manhattan on Wednesday selected Al Togut, a partner and founder of Togut, Segal & Segal, to be the interim trustee for the estate of Kossoff PLLC, which was forced into bankruptcy on Tuesday.

The firm, whose founder Mitchell Kossoff disappeared last month according to several lawsuits, has not replied to an involuntary bankruptcy petition filed by a group of creditors who claimed in April that Kossoff PLLC misappropriated more than $8 million that was sitting in its escrow accounts.

Togut has worked on high-profile restructurings including those of American Airlines, Chrysler Automotive, Enron and Pacific Drilling. But he told Reuters he believes he was selected in the Kossoff matter due to his "extensive experience with law firm bankruptcy cases."

Togut was lead counsel to Dewey & LeBoeuf, then an 1,100-lawyer firm, when it filed for bankruptcy in May 2012. He also worked on the 1987 bankruptcy of Finley, Kumble, Wagner, Heine, Underberg, Manley, Myerson & Casey and the 1994 collapse of Shea & Gould.

Togut's interim appointment comes as lawsuits have been piling up against Kossoff and his businesses, some of which allege Kossoff failed to repay hundreds of thousands of dollars in loans. Kossoff's mother, New York philanthropist Phyllis Kossoff, has accused her son of forging her signature "in order to obtain millions of dollars."

One lender who sued Kossoff in New York County Supreme Court earlier this month said the Manhattan district attorney had opened an investigation, but a spokesperson for the DA's office declined to comment, saying it "does not comment on investigations." Attempts to reach Kossoff have been unsuccessful.

Togut said in an email he hopes to find Kossoff.

"I am freshly appointed and am only in the earliest stages of the estate administration," Togut said. "I have seen news reports about what you call Mr. Kossoff's 'disappearance' but haven’t confirmed that characterization. I hope I can locate him."

If Kossoff cannot be found, Togut said administering the law firm's estate will be harder. He noted, however, that "there are other ways in which I can get information."

"Again, it’s way too early to say anything further," Togut said.

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David Thomas reports on the business of law, including law firm strategy, hiring, mergers and litigation. He is based out of Chicago. He can be reached at d.thomas@thomsonreuters.com and on Twitter @DaveThomas5150.