Charles Binder began representing applicants for Social Security Disability Benefits with his brother, Larry, in the 1970s.  In 2010, Binder & Binder scooped up $88 million in fees representing applicants for Social Security Disability Benefits (SSI/SSDI). It was the largest firm of its kind, thriving amid an aging workforce, high unemployment and less oversight than in the current environment.

On Thursday night, the firm filed for bankruptcy protection.

The Wall Street Journal reports:

The firm listed assets and liabilities each between $10 million and $50 million in a bankruptcy petition filed in U.S. Bankruptcy Court in White Plains, N.Y.

Those debts include $23 million in secured debt to lenders U.S. Bank and Capital One Bank and $16.7 million in unsecured debt to Stellus Capital Management, a spinoff of investment firm D.E. Shaw & Co., court filings show.

U.S. Bank and Capital One Bank are prepared to lend up to $26 million in bankruptcy financing, filings show, subject to court approval.

The firm is dependent upon government-paid fees earned from shepherding Social Security disability claimants through the system.

The firm is now facing a shrinking number of people seeking benefits and tougher scrutiny from the Social Security Administration (SSA) Administrative Law Judges (ALJ) who decide cases.

Binder& Binder has about 58,000 active cases or its 966 employees, many of whom aren’t lawyers. (In 2004, Congress made it easier for non-lawyers para-legals to represent applicants for Social Security disability benefits.)

In projections filed in court papers, Binder estimates its employee head count will drop to less than 400 over the next two years.

U.S. Bank National Association and Capital One have agreed to provide debtor-in-possession financing of up to $26 million, the filings showed.

The case is in the U.S. Bankruptcy Court Southern District of New York, Case No: 14-23728.

The move will allow the firm to reduce institutional debt after payments from the federal government slowed, hurting cash flow, said Kenneth Rosen, an attorney with Lowenstein Sandler representing Binder & Binder. The company listed both assets and liabilities of between $10 million and $50 million, according to court papers filed in U.S. Bankruptcy Court in the Southern District of New York.

“We have filed papers to pay our employees in the ordinary course. We don’t want the employees to feel anything; they will not. We don’t want the clients to feel anything; they will not,” Mr. Rosen said. “The last thing we would want is there to be any interruption. It’s business as usual.”

U.S. Bank and Capital One made a $23 million secured loan to the company. The financing will allow for operations to continue without interruption, Mr. Rosen said.

The law firm, with about 57,000 clients, has approximately 900 employees in 13 states, including New York, where it has offices in Manhattan, the Bronx, Long Island City and Hauppauge, L.I.

The company’s largest unsecured creditor was Houston-based Stellus Capital Management, which had loaned the company $16.7 million. Google and Manhattan-based Integrated Media Solutions were also among the firm’s largest creditors, with $800,000 and $2.7 million owed for services, respectively.

Manhattan management consultant Development Specialists will provide a chief restructuring officer to manage the bankruptcy and improve operating performance, according to the filing.

Binder & Binder was founded in 1975 by brothers Harry and Charles Binder. Charles would appear in TV commercials, saying in the ads “You have enough to worry about.”