John Provenzano, the firm's Controller, declared that the millions of dollars owed to clients appeared to be missing from the firm's accounts. Gerald Shargel, Dreier's attorney, said ''We're considering our options and [we] will make our position known on Thursday with respect to the underlying issues.'' Provenzano's statement revealed that the following events took place last week:
On December 3, Provenzano got a call from Dreier asking him to wire $8 million from the firm's escrow accounts to three different accounts he controlled. The next day Dreier called Provenzano and told him to wire $10million from the escrow accounts to one of Dreier's personal accounts. Provenzano said no again, but connected him to the bank where the escrow account was held and got the bank to do the official wiring. During another phone call between the two, Provenzano told Dreier the firm owed $38 million to clients, but the firm's escrow had only half that amount. Dreier then told Provenzano he could make the rest up if he could sell some of his art collection.
These events seem to indicate the danger in the idea of a ''solo equity partnership.'' Dreier, the recently dethroned partner and founder of Dreier LLP, has long been touting his firm model where only person has equity stake and would control its expenses. Partners would earn base salaries and bonuses linked to how much business they brought in during the year. The main problem, experts say, is that when the main partner goes down, the entire firm goes down and leaves the other partners vulnerable to lawsuits.
