Thursday, September 17, 2015
NECC Trustee Chops Fee Request Amid Protests
By Walter F. Roche Jr.
The trustee who oversaw the bankruptcy of the New England Compounding Center has agreed to a $2 million or 34.8 percent cut in his requested fees, even as creditors in the case are calling his original request excessive and unreasonable.
Filings in U.S. Bankruptcy Court in Massachusetts show Paul D. Moore, who served as NECC's trustee, reached an agreement with U.S. Trustee William K. Harrington to reduce his fees in the three-year-old case from $5.75 million to $3.75 million.
According to the filing the reduced fee for Moore and smaller reductions by other parties seeking payments was the result of recently completed negotiations.
On the same day that agreement was announced, creditors in the case filed an objection to Moore's original fee request charging that it, if approved, would amount to an hourly payment of $3,320, compared to Moore's normal hourly fee of a little over $600.
"This is excessive," the creditor's attorney William Baldiga wrote in the objection, adding that it would amount to "a windfall."
Conceding that Moore's work on the bankruptcy was "important and beneficial," Baldiga added, " he (Moore) was by no means the only party to drive the result. Trustee is seeking the maximum possible commission for himself."
In addition to his own fee request, Moore's law firm, Duane Morris, has asked for just under $4.3 million in fees and $63,601.10 in expenses. No reduction in those amounts have been offered.
In the filing by Moore and the U.S. Trustee, they also disclosed an agreement to cut payments by a little over $10,000 requested by two other firms involved in the case.
William Baldiga, the attorney for the creditors, did not respond to a request for comment on Moore's fee reduction.
The Moore fee cut agreement is not the first to be disclosed. Previously a Florida attorney disclosed he had agreed to cut his fee request by nearly $1 million.
Prior to those reductions, fee requests in the case totaled some $17 million.
Payments of the claims, if approved by Boroff, will come from a $200 million trust fund created under the NECC liquidation plan. Victims will be paid from the remaining funds after the expenses are paid.
NECC has been blamed for the 2012 fungal meningitis outbreak that killed 76 patients across the country. An additional 702 patients were sickened.
The fees are scheduled to be argued in November before U.S. Judge Henry J. Boroff.