Friday, October 30, 2009

"I needed a defibrillator."

That was Chief Judge Federico Moreno on how he reacted when he realized that Roberto Martinez was asking for an $11 million bonus, and not $1.1 million. Vanessa Blum has all the details here.

From the intro:

Then Chief U.S. District Judge Federico Moreno first read the final fee request for the Mutual Benefits fraud receivership, he thought lawyers were seeking $1.1 million, not $11 million. Then he realized there was no decimal point, the judge recounted Thursday at a hearing in Miami. “I needed a defibrillator,” he joked. “We’re talking about a lot of money.” It is up to Moreno to resolve a simmering dispute over how richly to compensate lawyers for five years of work on one of the largest scams in South Florida history. Roberto Martinez, the court-appointed receiver, is seeking the $11 million bonus to split between his law firm, Colson Hicks Eidson, and primary counsel Kozyak Tropin & Throckmorton. To date, the two Coral Gables firms have jointly collected about $4 million. Moreno did not say when he would rule on the request. Robert Levenson, regional trial counsel for the Securities and Exchange Commission, argued against any fee enhancement, saying it would reduce payments to bilked investors and award lawyers a windfall equivalent to more than $800 per hour.
Receivers should be viewed as public servants and be paid moderately in fairness to victims, he said. “The investors are only going to recover a fraction of their losses,” Levenson said. “These aren’t corporate, market-rate clients.”

Apprently the investors weren't happy either:

No investors spoke at the hearing. In an Oct. 15 letter to Moreno, one investor said he was “appalled” by the receiver’s request. “Please, let’s get these funds back where they belong — in the hands of the investors — and away from greedy hands,” wrote Ronald Meyers of Sanibel Island.

But there is a strong counter-argument:

But Michael Hanzman, of counsel with West Palm Beach-based Ackerman Link & Sartory, who represented defrauded investors in class action litigation, told Moreno the receivership lawyers “deserve a significant fee enhancement.” He did not specify an amount. “If you want to attract the best and the brightest people to take these cases, you have to pay a reasonable fee,” Hanzman said. “This is not a pro bono case.”

That might be overstating it a bit -- the lawyers made an average of $265/hour. The question is whether they should be paid about $800 hour (which is higher than their typical hourly rates) for what everyone agrees was excellent work or whether receivers should make less than their hourly rates because the goal is to return money to the victims.

What say you dear readers?


Anonymous said...

“I needed a defibrillator,” he joked. “We’re talking about a lot of money.”

I think the decision is in the bag here. Good luck collecting that bonus guys.

Anonymous said...

That is Fucking Ridiculous.

Don't they have to tell the court in advance in some form of proposal what their billable will be? Did they tell Moreno at that time they would ask for a 11 million dollar bonus if semi-successful?

I presume if that the Judge would have said thank you very much, there are 20 other firms in town capable and willing to do this work.

No wonder people think we are worse than used car salesmen.

Anonymous said...

I say show Roberto Martinez the money.

fake fred moreno said...

Meeeeester Markus!!! What say you? How much is reasonable here?

Anonymous said...

A reduction to the CJA rate of 105 per hour would be fine.

I guess taking from defrauded investors who may have lost their savings is okay, but CJA slips get slashed when the court's money is at stake.


The Court should start appointing CJA attorneys to handle receiverships.