Tuesday, October 6, 2015

Judge Defers Action on Disputed Meningitis Fee Request

By Walter F. Roche Jr.

After nearly two hours of arguments, a federal judge has deferred action on a disputed $3.75 million fee request in the bankruptcy of the firm blamed for a nationwide outbreak of fungal meningitis.
U.S. Bankruptcy Judge Henry J. Boroff said he would take the pay issue under advisement in the fee requested by Paul D. Moore for his work in the bankruptcy of the New England Compounding Center.
Moore originally requested a fee of $5.758 million but later reduced it to $3.7 million under an agreement with the U.S. Trustee. Thomas Sobol, representing victims of the outbreak, argued Tuesday that it should be reduced further to $1.3 million
"This case is one in which there has to be some sacrifice," Sobol said. "It is not the case for an enhancement."
Stating that he has "an enormous amount of respect for Mr. Moore," he added, "The victims should not be paying an enhancement."
Moore's attorney, Michael Lastowski, referred to the case as a "resounding success," and gave a detailed history of the litigation from the time the bankruptcy was filed on Dec. 21, 2012.
Stating that "prospects looked bleak" for any substantial recovery, he said at the onset even basic information was scant.
He said the case was "very sophisticated" and Moore achieved an extraordinary result. He also noted that some 8 per cent of the total recovered could go to plaintiff and other creditors' lawyers who took lead roles in the case.
Sobol, however, said the comparison with the so-called common benefit fund was not fair as it would be shared by some two dozen lawyers.
"No one will be paid more than their lodestar," he said referring to a method of computing a lawyer's individual fee.
Earlier in the session Boroff did approve several other fee requests, including two which were adjusted downward slightly.
Among those approved was a fee of some $4.3 million for Duane Morris, Moore's law firm.
Sobol noted that that amount included $1.2  million for work done by Moore.

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