Legal Fees in Meningitis Case Top $17 million

By Walter F. Roche Jr.


Requests for legal fees exceeding $17 million have been submitted in the bankruptcy case of the Massachusetts company blamed for a deadly 2012 fungal meningitis outbreak.
The fee requests, which include a total of $10.5 million for the attorney who served as trustee and his law firm, were submitted this week to the judge who has been presiding over the nearly three-year-old case.
Paul D. Moore, the former trustee, submitted a claim for $5.75 million along with a claim for $416.52 in expenses. His law firm, Duane Morris, filed for fees of just under $4.3 million and expenses of $63,601.10.
In a massive filing explaining the request, Moore said that the hourly rates charged, ranging from $625 to $675 an hour, was at a reduced rate from his normal charges. The filings include hour by hour breakdowns of the duties performed, ranging from reading and analyzing emails to appearances in court.
"At the time of the Chapter 11 Trustee's appointment, the debtors situation was dire," the filing states, adding that even after he developed a strategy "implementation was fraught with peril."
Moore's services as trustee ended recently after Boroff approved his liquidation plan, but he will continue to serve as the attorney overseeing the implementation of the liquidation plan.
Under the liquidation plan developed by Moore and recently approved by U.S. Bankruptcy Judge Henry J. Boroff, over $200 million will be available for victims of the deadly outbreak, but legal and administrative fees will come out of the same pot.
The fungal meningitis outbreak, caused by fungus laden injectable steroids, sickened 778 victims across the country killing 76 of them.
Currently, according to filings this week, some 686 civil cases have been filed by victims or their survivors and are pending before another federal judge.
In addition to Moore's and his law firm's filings, claims have been submitted by other attorneys involved in the bankruptcy and financial consulting firms engaged to craft the liquidation plan.
The law firm of Brown Rudnick, which represented unsecured creditors, filed for $3.4 million in fees and $251,992 in expenses, while lawyers representing the unsecured creditors committee, including victims, are seeking $3 million in fees and expenses.
Mesirow Financial filed a claim for $497,655 and $2,329.80 in expenses while Huron Consulting, which was only recently retained, filed for $7,065 in fees and $105.80 in expenses.
Murtha Cullina LLP, a law firm, filed for $211,124 in fees and $2,416 in expenses. The firm, however, already had been paid a $127,300.06 retainer and is only seeking an additional $86,240.
A New Hampshire lawyer,meanwhile, filed motions in several cases for a waiver to file his claims at a later date.
Still other legal fees are likely to be claimed as civil cases are resolved and attorneys collect their share under existing fee agreements.
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