By Dan Christensen, BrowardBulldog.org
Attorneys and accountants for the court trustee in the messy bankruptcy of scamster Scott Rothstein’s collapsed law firm have asked a judge to authorize nearly $2.2 million in fees for less than three months’ work.
The biggest slice of that plump pie – more than $1.2 million – was billed by Berger Singerman, a South Florida law firm with deep ties to the Democratic Party.
“It is a significant amount of money, and there will be significant legal fees that will continue to accrue. There is a massive amount of work,” said firm partner and bankruptcy expert Paul Singerman.
Others that asked for large initial fees in the case last week: Miami accounting firm Berkowitz Dick Pollack & Brant ($611,640), and Miami law firm Genovese Joblove & Battista ($324,805).
Each of the firms has agreed to accept much less now than they claim they are owed – 65 percent less in Berger Singerman’s case – because there’s not enough money in the bankruptcy estate of Rothstein Rosenfeldt Adler. If their requests are approved, they would be entitled to receive that money later if funds are recovered.
Singerman said he did not know how much cash and assets were currently in RRA’s bankruptcy estate. He declined to speculate how high his firm’s fees might go as the complex case unfolds, but said his firm’s services were worth the cost.
Fort Lauderdale U.S. Bankruptcy Court Judge Raymond B. Ray has set a 10-minute hearing on April 7 to consider whether to approve the fees.
RRA imploded spectacularly in November. On Dec. 1, federal agents arrested Rothstein on charges of running a $1.2 billion Ponzi scheme out of RRA’s offices in the Bank of America building in downtown Fort Lauderdale. He pleaded guilty in January and is cooperating, but faces decades in prison when he is sentenced in May.
The lawyers and accountants were hired by Chapter 11 trustee Herbert Stettin to sort things out and recover as much money for Rothstein’s victims and other creditors as possible.
In support of their hefty charges, those firms filed hundreds of pages of detailed billing sheets and other paperwork.
They show that 19 Berger Singerman lawyers billed for the case – most at rates in excess of $400 an hour. Six Berger Singerman lawyers billed upward of $500 an hour.
The highest rates – $560 an hour – were billed by Singerman and colleague Charles Lichtman, both top-rated lawyers.
Singerman is co-chief executive officer of the firm along with partner Mitchell W. Berger, a former member of President Clinton’s transition team in 1992-93 and a senior advisor to Al Gore during his 2000 presidential campaign.
Lichtman, a fraud specialist, was lead counsel for Florida Democrats during the 2008 election. Before that he served as special lead counsel in Florida for John Kerry’s 2004 presidential campaign, and co-lead counsel for the Democratic Party in the 2000 presidential election recount.
In addition to the lawyers, 13 paraprofessionals at the firm billed hourly rates of $185-$195.
In all, the firm reported that during the case’s first 12 weeks its employees billed a total of 3,468.5 hours at an average hourly rate of $354.90
Berger Singerman’s application to the court for fees goes into great detail about the firm’s legal work. It says “much” of what was done the first three months involved “exploring and developing the claims that the trustee plans to bring in the near future.
“Although much of this background work has not yet resulted in substantial litigation recoveries, this preparatory work is essential in a case of this nature and magnitude.”
One of those cases, seeking more than $1 million, was filed Wednesday against Rothstein’s wife Kim.
Accountants at Berkowitz Dick Pollack & Brant told the court the $611,000 they seek reflects an average hourly rate of $222 for 2,749 hours. The Genovese law firm reported working 804.5 hours at an average rate of $404 an hour.