‘$1.2M attorneys’ fee in Fund bankruptcy case exorbitant’

In a letter to Faris filed in court, Weil, a Fund member who is now based in Hawaii, expressed his strong opposition to the $1.2 million that the Boston-based Brown & Rudnick law firm has allegedly requested for their services in the Fund’s failed Chapter 11 bankruptcy petition.

“The amount sought is excessive and unwarranted considering the work done, the result obtained, and the hefty increase above the amount contracted for with the Fund,” said Weil, who also previously served as legal counsel for the Public Auditor’s Office.

Saipan Tribune tried to obtain comment from attorney Braddock Huesman, one of the Fund’s counsels, but he did not reply as of press time.

Weil said it seems to him that Brown & Rudnick should not even have been retained in the first place. He said the issue was a threshold one: “Is a government entity eligible to file for federal bankruptcy protection under Chapter 11?”

The issue is not that difficult to research, he said. Basic research could have and should have been done by the Fund’s two in-house legal counsels, he added.

“I don’t have the circumstances surrounding the Fund’s decision to retain the Boston law firm, but I believe that decision was strongly influenced by one of the Fund’s outside counsel whose law school classmate was a member of that firm,” Weil said.

Weil said he doesn’t have the detailed billing, but that he suspects that it contained services for suing various autonomous agencies in bankruptcy court for debts owed to the Fund, and transferring the $231 million judgment against the central government from the local court to the Bankruptcy Court for collection.

In the last week of May 2012, Fund counsels filed five separate lawsuits before the Bankruptcy Court against different government agencies for alleged failure to remit payments. The separate lawsuits were filed a day or two before Faris issued a tentative ruling saying he is inclined to dismiss the Fund’s bankruptcy petition.

According to Weil, the Fund’s court actions should not have been taken until the ruling on whether the Bankruptcy Court even had jurisdiction, because if the court lacked jurisdiction-as the ruling held-those actions would be meaningless.

“Such premature actions by the lawyers can’t help but raise a question as to whether they may possibly have been running up their fees in the bankruptcy proceedings,” Weil said.

The former attorney general hopes that Faris will agree that no fees should be awarded for performing such premature and unnecessary services in the bankruptcy case.

“The amount paid for professional fees has been staggering. An attorney fee here, a consultant’s fee there, another attorney fee over here.the process has gone on unchecked, and the Fund’s cash balance has taken numerous such hits. Death by a thousand cuts,” Weil added.

By Ferdie de la Torre
Reporter