Dewey & LeBoeuf requested $2,147,666.75 in fees for its work as a receiver in the receivership of Wextrust, which has been sued by the SEC for being a “massive Ponzi scheme.” Query whether “massive” is an appropriate description anymore when the victims lost only $255 million. My, how the times have changed.
Anyway, Timothy Coleman (Northern Kentucy BA ‘87, Georgetown JD ‘90) got the receivership appointment from the SEC, but only faced two competitors: an unidentified DC lawyer who would have engaged his ”international firm” as counsel (as Coleman did with Dewey) and a financial advisor from Atlanta who, while not a lawyer himself, had extensive experience as a receiver and would have retained “an international law firm headquartered in Atlanta with an office … in New York.” Coleman and Dewey weren’t the cheapest, but they did offer substantial discounts off their standard rates.
Chin was none too happy with the SEC for the limited interviewing. In his opinion, he extolls Dewey’s work, but found the fee request excessive. Breaking it down as 275 hours per day, for 24 straight days (lawyers, paralegals, summer associates, and all sorts of other staff), he found both that “there was some excessiveness and redundancy” and that “the number of hours expended simply is not reasonable.” He ultimately knocked $429,533.35 off the fee request.
More on the fees and the other BigLaw firms that took their shots after the jump.
As if it weren’t enough just to find the firm had padded the time sheets, Chin went on too point out that Dewey’s rates were excessive, albeit in the context of receivership, without opining on whether they would be appropriate in an actual bankruptcy proceeding. Dewey, of course, claimed that the Wextrust receivership was unique and it was therefore unable to find analogous fee requests. Ahh, the old, “but this case is unique” defense. At least the SEC offered up a Kaye Scholer engagement from October 2007 in which rates up to $795 had been approved.
Chin wasn’t persuaded. He cited the objecting creditors’ references to another Kaye Scholer engagement at up to $200 (in 2003), and another matter in which Hogan & Hartson partners billing at up to $525, and Kirkpatrick & Lockhart partners at up to $390 in 2006. Dewey’s 7th years billing at $605 didn’t fly.
On the creditor side, Dechert represented the International Ad Hoc Committee of Wextrust Creditors, Brown Rudnick represented the International Consortium of Wextrust Creditors, and Sullivan & Worcester represented G&H Partners, a major creditor. All objected to the fees and a number of procedural issues. Sullivan & Worcester was particularly offended by Dewey’s request and wanted it slashed by 60%. No word on whether they’ll appeal the 20% reduction.
Really? $605 for associates from class of 2002?
HT: American Lawyer
Related posts:
This website uses IntenseDebate comments, but they are not currently loaded because either your browser doesn't support JavaScript, or they didn't load fast enough.
0 Responses
Stay in touch with the conversation, subscribe to the RSS feed for comments on this post.