Bullivant Houser Bailey: 87-Year-Old Law Firm Liquidates in Chapter 11

Bullivant Houser Bailey, PC, a Pacific Northwest insurance defense firm founded in 1938, filed for chapter 11 protection on December 15, 2025. The firm closed its doors effective November 1, 2025 after shareholders voted to dissolve and partner departures accelerated. The chapter 11 filing is framed as an orderly liquidation of remaining assets, centered on collecting receivables, resolving lease obligations, and distributing value under the Bankruptcy Code.

Bullivant operated as a West Coast defense firm with offices in Portland, Seattle, and San Francisco. Court filings list approximately $31 million in 2024 gross revenue and about $2 million in collectible accounts receivable at filing. A central issue in the case is the debtor's request to subordinate approximately $1.64 million in former shareholder capital repayment claims under Section 510(b) so that trade creditors and employee priority claims are paid ahead of former equity holders.

The firm grew into one of Oregon's larger insurance-focused practices. A U.S. News firm profile describes Bullivant as a Portland-based firm with broad practice coverage, including insurance, employment, and litigation-related work. Industry commentary notes that the majority of Bullivant's attorneys provided services to insurers and insureds, positioning the firm squarely within the regional insurance defense market. Those relationships shaped the firm's client mix, billing model, and exposure to insurer-imposed cost controls.

Court	U.S. Bankruptcy Court, Northern District of California
Case Number	25-31017
Judge	Hon. Dennis Montali
Petition Date	December 15, 2025
Debtor(s)	Bullivant Houser Bailey, PC
2024 Gross Revenue	$31 million
Accounts Receivable	~$2 million (estimated collectible)
Cash at Filing	~$968,796
Employees	8
Chief Dissolution Officer	Ronald L. Richman
341 Meeting	January 16, 2026 (telephonic)
Claims Bar Date (Non-Government)	April 16, 2026

Orderly liquidation and Section 510(b) strategy

Liquidation posture. Court filings describe the case as an orderly wind-down rather than a reorganization. The firm stopped providing legal services on October 31, 2025, and retained a small staff to collect receivables, manage trust account reconciliations, and complete client matter transitions. Columbia Bank's secured debt was paid in full before the filing, leaving no secured lenders in the case. The estate is funded primarily by collectible receivables and cash balances, with a severance trust account set aside for employee obligations.

Capital repayment dispute. The core litigation objective is to subordinate former shareholder capital repayment claims totaling roughly $1.64 million. Section 510(b) categorically subordinates claims arising from the purchase or sale of securities to the level of the underlying equity. Courts applying the statute rely on the principle that equity holders assume risk in exchange for upside and should not convert equity risk into creditor recovery. A former partner's capital account functions as an equity stake in a partnership: it is the ledger of the partner's financial contributions and entitlement upon withdrawal, and is typically repaid according to a firm schedule rather than immediately on departure. Partner capital accounts track equity contributions and withdrawals, while partnership agreements often set the timing and valuation rules for repayment. Bullivant's filing seeks to treat those repayment claims as equity-like interests subject to Section 510(b) subordination, which would push them behind trade creditors, lease counterparties, and employee priority claims.

Section 510(b) is rooted in the risk allocation logic that equity holders take residual risk while creditors expect priority. Legal analysis of the statute emphasizes that it is intended to prevent equity holders from "bootstrapping" their investment losses into creditor claims, preserving the traditional separation between capital providers and trade creditors. Dechert's review of Section 510(b) highlights the Slain/Kripke risk-allocation theory, which views equity holders as assuming the risk of enterprise performance and therefore subordinate to creditors in bankruptcy. Bullivant's capital repayment dispute tests how those principles apply to a professional corporation where shareholders are also active service providers. The bankruptcy court's resolution of the issue will determine whether former partners recover alongside trade creditors or only after general unsecured claims are satisfied.

First-day relief and case administration. At the December 19, 2025 first-day hearing, the court granted interim authority to continue cash management arrangements and pay prepetition wages subject to the statutory cap. The court designated Ronald L. Richman as the Responsible Individual and permitted employee wage information to be filed under seal. Donlin Recano & Company, LLC was approved as claims and noticing agent, though the court reduced the proposed budget. The debtor was also ordered to file required documents within 14 days to avoid automatic dismissal and to provide the U.S. Trustee with a list of authorized payments by January 5, 2026.

Case administration orders. In addition to the core first-day motions, the court entered orders authorizing payment of certain state and federal taxes and issued a status conference order outlining required disclosures for the early case phase. The U.S. Trustee appeared early in the case and required an itemized list of authorized payments and compliance updates before the February 2026 status conference. The Responsible Individual designation is typical in law firm dissolutions, where traditional management structures no longer exist, and a single officer is required to oversee the estate's administration, employee obligations, and collections.

Key deadlines and hearing calendar.

Status conference statement requirements. The status conference order requires the debtor to file a statement at least seven days before the hearing covering the causes of the filing, the objectives of the case, and a proposed schedule for any plan or disclosure statement. The statement must also outline the contemplated liquidation plan, describe insurance coverage and adequacy, identify professional retention status, summarize post-petition operations and revenue, list pending litigation, and confirm compliance with U.S. Trustee information requests. Additional topics include monthly operating report status, post-petition tax payments, any cash collateral or credit issues, motions to assume or reject executory contracts or leases, stay relief orders, and any unusual developments affecting case administration.

The status conference is scheduled for February 6, 2026 at 10:00 a.m., with appearances in San Francisco Courtroom 17 or by Zoom. The order requires attendance by the Responsible Individual and primary bankruptcy counsel, with creditors welcome but not required to appear. The statement must be served on the U.S. Trustee and any official committee; if no committee is appointed, the debtor must serve the 20 largest general unsecured creditors (excluding insiders). These early-case reporting requirements are designed to give the court and creditors visibility into the liquidation plan and the estate's ability to fund administrative expenses.

Venue questions. At the first-day hearing, the court noted that any party seeking a venue transfer would need to file a formal motion and that the debtor would have the opportunity to concede or oppose the request. The court signaled a willingness to address venue by live or remote hearing if a motion is filed.

Claims agent and noticing. Donlin Recano, now part of Angeion Group following the 2025 acquisition, is responsible for the claims register and noticing.

As of January 28, 2026, the docket reflected only first-day orders and scheduling entries, with no liquidation plan or asset sale motion filed. The case remained in an early administrative phase focused on documentation and scheduling.

Professional engagements. Court filings list The Law Firm Nuti Hart LLP as debtor's counsel, with a retainer balance of approximately $39,387 at filing and a separate $15,000 prepetition retainer for Donlin Recano. The firm also reported three corporate credit cards with a combined limit of about $10,000 for wind-down expenses. These professional engagements are limited relative to a typical operating-company chapter 11, reflecting the firm's liquidation posture and the absence of ongoing operating units.

The claims agent provides case notices, claim forms, and hearing updates for creditors who do not receive electronic noticing through counsel. For trade vendors, landlords, and former shareholders, the claims agent process is the primary reference point for filing a proof of claim and monitoring the case calendar.

Firm history and practice profile

Founding and expansion. Bullivant Houser Bailey was founded in 1938 in Portland, Oregon by V.V. Pendergrass, Charles R. Spackman, Jr., and R.R. Bullivant. The firm began with a focus on banking and corporate law, supported by founders with banking and trial backgrounds. In 1983, it opened an office in Vancouver, Washington, and by the late 1990s had expanded to Portland, Seattle, and San Francisco. The firm adopted the current Bullivant Houser Bailey name in 1998 and later merged with Derby Cook Quinby & Tweedt in San Francisco, a firm known for admiralty and maritime work with roots dating to 1906.

The founders' backgrounds shaped the firm's early identity. Pendergrass built a reputation in Oregon banking law, while Bullivant had experience in rail transportation law, and Spackman was known for trial work. That combination supported a broad litigation and commercial practice base as the firm expanded across the Pacific Northwest. By the 2000s, Bullivant had become one of the larger law firms in Oregon with multi-state offices and a client base tied to insurers and corporate defendants.

Core practices. Bullivant's practice mix centered on insurance defense, insurance coverage, professional liability, and commercial litigation. The firm also handled product liability defense and regulatory matters for national manufacturers and suppliers. Its professional liability lawyers represented architects, engineers, brokers, attorneys, directors and officers, and healthcare professionals, reflecting a client base tied to risk management and insurance markets. The firm served insurers and insureds across the Pacific Northwest, providing coverage counsel, litigation defense, and claims-related advisory work.

Firm profiles also list practice capability in ERISA and employee benefits, labor and employment, intellectual property, and general commercial litigation, consistent with its role as counsel to insurers and insured corporate clients. That breadth allowed the firm to manage complex defense dockets while also supporting coverage counseling, regulatory matters, and litigation for policyholders.

Industry recognition. Bullivant received Tier 1 rankings from U.S. News & World Report and Best Lawyers in Insurance Law and Admiralty & Maritime Law. In the 2025 Chambers USA guide, the firm's Litigation: General Commercial practice in Oregon was ranked Band 4, while its Insurance practices were ranked Band 1 in Washington and Band 4 in California. Chambers described the team as compact and capable, with experience in insurance defense, breach of contract, investigations, and merger-related litigation. Bullivant also served as the exclusive Insuralex member firm in California, a network focused on insurance and reinsurance counsel.

Insuralex materials describe Bullivant as having long-term relationships with large insurance companies and a multi-decade track record representing property and casualty, life, health, surety, and reinsurance carriers. That focus reinforced the firm's position in the insurance defense market, but also exposed it to insurer-driven pricing constraints and competitive pressure from larger national firms with broader platforms.

Partner departures and the path to dissolution

2011 merger attempt and partner exodus. Bullivant's merger talks with Virginia-based LeClairRyan ended in 2011. Willamette Week reported that LeClairRyan approached Bullivant about an acquisition and that Bullivant declined the offer after concluding the firms were not the right fit. After the talks collapsed, the firm's attorney roster declined from 236 to 58 and capital shareholders left for other firms. The firm advised departing partners that repayment of capital contributions would take longer, though it intended to pay in full.

The ABA Journal reported that 22 capital shareholders left in early 2011, and 38 had departed over the prior four years, leaving a smaller ownership group to carry ongoing capital repayment obligations. The firm stated that it expected to continue making capital repayments but acknowledged the need for more time, highlighting how partnership departures can turn into balance-sheet liabilities when capital accounts are repayable on withdrawal.

Capital repayment pressure. Departing partners created repayment obligations that persisted over time. In a law firm partnership, capital accounts represent the partner's equity stake and are often repaid over a schedule set by the partnership agreement. When departures accelerate, repayment obligations can rise faster than cash collections, putting pressure on liquidity. Bullivant ultimately defaulted on its capital repayment obligations on September 30, 2025, shortly after the dissolution vote.

Shareholder agreements typically set the valuation and repayment framework for departing partners and are intended to address contingencies like withdrawal, disability, or dissolution. A failure to align those agreements with liquidity realities can leave a firm with contractual repayment demands that outstrip receivable collections in a wind-down. The bankruptcy case places those contractual obligations alongside trade debt and lease claims for the court to prioritize under the Bankruptcy Code.

2025 lateral moves and closure. The final year of operations saw a series of team departures to national firms. Wilson Elser hired an eight-attorney team in July 2025 and added six more attorneys in September. Kennedys recruited an eight-person team in Seattle in September 2025, and Wilson Elser later announced a broader Pacific Northwest expansion that included former Bullivant lawyers. These departures preceded the October 31 cessation of legal services and the November 1 closure.

The departures reduced billable capacity during a period when the firm still faced capital repayment obligations and lease commitments. Once shareholders voted to dissolve on September 23, 2025, the firm shifted to a wind-down posture, with Ronald L. Richman appointed as Chief Dissolution Officer to oversee the process. The short period between the dissolution vote and the bankruptcy filing reflects the speed at which the remaining assets and liabilities needed to be stabilized within a court-supervised framework.

Dissolution timeline.

The civil action by former shareholder Thomas Hutchinson sought recovery of capital repayment claims. The chapter 11 filing imposed the automatic stay, halting the litigation and channeling the dispute into the claims process.

Financial position at filing

Assets. The estate's principal assets are accounts receivable and cash. Court filings list approximately $2 million in collectible receivables as of December 4, 2025, with a higher $4.2 million combined receivables and work-in-progress estimate from November 1, 2025. Cash and operating funds totaled about $968,796 on the petition date, and the firm maintained a $126,779 severance trust account intended to support employee obligations.

Liabilities.

The largest liability category consists of former shareholder capital repayment claims. The debtor's Section 510(b) strategy is designed to treat those claims as equity-like interests rather than general unsecured debt. Contingent lease claims reflect obligations under office leases in multiple markets, and trade debt is estimated at roughly $450,000. With secured debt paid in full before filing, the estate's remaining obligations are predominantly unsecured.

Employee obligations. The firm reported eight active employees at filing. The court authorized payment of prepetition wages and benefits subject to the Section 507(a)(5) priority cap of $17,150 per employee for wages and benefits earned within 180 days of filing. The severance trust account was established to address remaining employee obligations in the wind-down.

Court filings also capped prepetition wage and salary payments at an aggregate $18,000, reflecting the limited employee footprint at the time of filing. Those constraints are consistent with the firm's liquidation posture and the fact that most attorneys and staff had already transitioned to other firms or concluded employment by the time the chapter 11 petition was filed.

Law firm bankruptcy context and regional market

Law firm liquidations as a pattern. Bullivant's filing fits into a longer list of law firm dissolutions that reached bankruptcy court. Dewey & LeBoeuf, described as the largest law firm collapse, peaked at more than 1,300 lawyers before partner defections and debt pressures forced a 2012 bankruptcy. Heller Ehrman, an international firm of more than 730 attorneys, filed chapter 11 after partner departures triggered credit line problems. Howrey, which had more than 700 attorneys and a global antitrust practice, dissolved in 2011 after sustained financial underperformance. Brobeck, Phleger & Harrison expanded rapidly during the dot-com boom and liquidated after a failed merger and partner departures.

LeClairRyan, the firm that approached Bullivant about a merger in 2011, offers a more recent point of comparison. The firm grew to 25 offices with roughly 385 lawyers and 160 shareholders at its peak, then faced revenue and profitability declines and waves of partner resignations. LeClairRyan dissolved on July 29, 2019 and filed chapter 11 on September 3, 2019, with the case later converting to chapter 7. Those facts underscore how quickly partner departures can accelerate once profitability and liquidity are impaired.

Other historical failures illustrate similar dynamics. Heller Ehrman lost 15 intellectual property partners in 2008 and saw roughly 50 partners exit before its dissolution. Howrey, a global antitrust and intellectual property firm, dissolved in March 2011 after two years of disappointing results and later entered bankruptcy, with a trustee pursuing recoveries for the estate. Brobeck's revenue grew from $214 million in 1998 to $314 million in 2000 during the dot-com boom, but the firm announced a disbanding shortly after merger talks with Morgan Lewis fell apart in 2003, ultimately liquidating under chapter 7.

These cases share recurring issues: reliance on partner-driven revenue, exposure to sudden client and lawyer defections, and capital repayment obligations that convert departures into near-term cash demands. When a firm loses billable capacity faster than it can cut expenses, the liquidity gap can accelerate dissolution.

Insurance defense market pressure. Bullivant's core practice was insurance defense and coverage. In that segment, client-imposed billing constraints are common. Industry reporting on insurance defense firms notes that constrained billing rates and flat-fee arrangements limit pricing power, while aggressive auditing and cost-containment practices by insurers can hinder retention of experienced attorneys. Those pressures create a competitive disadvantage for regional insurance defense firms when national firms can offer higher compensation, broader client platforms, and deeper benches for specialized litigation work.

Pacific Northwest legal market dynamics. The region has also seen consolidation. Ballard Spahr and Lane Powell agreed to combine effective January 1, 2025, creating a combined firm of more than 750 attorneys in 18 offices and expanding Ballard Spahr's presence in Seattle, Portland, and Anchorage. Seattle's litigation market is buoyed by the presence of major corporate headquarters and a port that is among the largest in the United States, while Portland's business base includes global athletic and footwear companies that create steady demand for commercial and insurance litigation. Regional legal market guides note Seattle's concentration of large employers, from technology to aerospace, and highlight litigation as a particularly active practice area across the Pacific Northwest.

Oregon's broader professional services economy also shapes the legal services market. State business reporting estimates that professional and business services contribute roughly $38.5 billion to Oregon's GDP, with attorney distribution concentrated in metropolitan areas. Oregon has also pursued regulatory innovation, including the Licensed Paralegal program introduced in recent years, which reflects ongoing structural change in the delivery of legal services.

Broader bankruptcy environment. The U.S. Courts reported that bankruptcy filings rose 13.1 percent in the 12-month period ending March 31, 2025, with business filings rising 5.6 percent. Industry research also points to a wave of large corporate bankruptcies in 2024-2025, with 694 filings in 2024 compared with 635 in 2023. The same analysis notes that 83% of sector professionals expect restructuring mandates to grow, driven by tighter financial conditions, inflationary pressures, and post-pandemic market realignment. Bullivant's case sits within that higher-activity environment, even though the debtor itself is a regional professional services firm rather than a large corporate issuer.

Frequently Asked Questions

What was Bullivant Houser Bailey PC?

Bullivant Houser Bailey PC was a Pacific Northwest law firm founded in Portland in 1938. It operated offices in Portland, Seattle, and San Francisco and focused on insurance defense, coverage litigation, professional liability, and commercial litigation. The firm received Tier 1 rankings in Insurance Law and Admiralty & Maritime Law from U.S. News & World Report and Best Lawyers.

Why did Bullivant Houser Bailey close?

The firm closed after shareholders voted to dissolve in September 2025 and partner departures accelerated. Merger discussions with an Am Law 200 firm ended on September 12, 2025. The firm ceased legal services on October 31, 2025 and closed effective November 1, 2025.

Why file chapter 11 instead of dissolving outside bankruptcy?

The chapter 11 filing provides a centralized process to liquidate assets, pursue accounts receivable collections, and resolve disputes over partner capital repayment claims. The case is designed to address the priority of claims and to seek subordination of former shareholder capital claims under Section 510(b).

What is Section 510(b) and why does it matter here?

Section 510(b) subordinates claims arising from the purchase or sale of securities to the level of the underlying equity. Bullivant argues that partner capital repayment claims are equity-like and should be treated as subordinate to trade and employee claims. If the court agrees, those former shareholder claims would sit behind general unsecured claims in the distribution waterfall.

What assets does the estate have?

The estate holds approximately $2 million in collectible accounts receivable, roughly $968,796 in operating cash, and a $126,779 severance trust account. The firm's secured debt was paid in full before filing, leaving no remaining secured obligations.

What are the largest liabilities?

Major liabilities include about $1.64 million in former shareholder capital repayment claims, roughly $450,000 in trade debt, and an estimated $1.75 million in contingent lease claims tied to office leases.

What are the key case dates?

The Section 341 meeting of creditors is scheduled for January 16, 2026, and the non-governmental claims bar date is April 16, 2026. A status conference is scheduled for February 6, 2026, with additional milestones to be set by the court as the liquidation progresses.

How does this compare to other law firm bankruptcies?

Bullivant follows a line of law firm dissolutions that reached bankruptcy court, including Dewey & LeBoeuf (2012), Heller Ehrman (2008), Howrey (2011), and Brobeck, Phleger & Harrison (2003). In each case, partner departures, revenue loss, and capital repayment obligations played central roles.

What practice areas defined Bullivant before closure?

The firm was recognized for insurance defense, insurance coverage, professional liability, and commercial litigation, with national rankings in Insurance Law and Admiralty & Maritime Law and regional recognition in Washington, Oregon, and California.

Who is the claims agent for Bullivant Houser Bailey?

Donlin Recano & Company, LLC serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

For more bankruptcy case analyses and restructuring insights, visit ElevenFlo's bankruptcy blog.