Legal News

Such a Deal: Marc Pomerantz Cuts Fees in Dreier Case

By Ashby Jones

Earlier this week, we chronicled the fact that Weil Gotshal had recently submitted a fee request in the Lehman Bros. bankruptcy to the tune of $55.1 million — the largest quarterly fee request ever made by a bankrupt debtor’s counsel.

Now comes Paul Weiss, another elite, large, New York-based firm, which happens to be helping clean up another failed enterprise — the law firm Dreier LLP, which imploded spectacularly last fall after its founder and sole equity holder, Marc Dreier, was arrested on impersonation charges.

Late last week, Paul Weiss made clear it’s in a slightly charitable? gracious? appreciative? mood. As reported by the New York Law Journal, “citing inefficiencies engendered by the “chaotic” conditions following the arrest of Marc S. Dreier and the implosion of his 250-lawyer firm,” as well as the “quasi-public interest nature” of the work, Pomerantz and his crew agreed to lop about $500,000 off of their customary rates.

“Having witnessed the gravity and breadth of the damage inflicted first-hand, the Receiver is inclined to leave more, not less, money in the pot of funds that will be used to compensate injured victims and creditors,” the application states.

In an interview with the New York Law Journal, Pomerantz said he was indebted to ex-Dreier staff and attorneys who helped in the work of the receivership, without receiving any compensation. He said the substantial discount in the fee application “reflects in part the firm’s desire to not profit unduly in light of the hardship that so many have suffered.”

Based on “prevailing rates,” Paul Weiss’ bill would come to roughly $2 million. However, after chopping more than $100,000 in fees and expenses for which the SEC does not reimburse and then taking a discount, the requested fee tops out at about $1.5 million.

In other Dreier news, the NYT’s Dealbook blog is reporting that Dreier’s name has turned up in connection with the prostitution ring run in the 1990s by Jodi "Babydol" Gibson, a well-known Hollywood madam.

A lawyer for Dreier, Gerald Shargel, told DealBook that Dreier has "no idea" who Ms. Gibson is.

Full post as published by Law Blog - WSJ.com on April 17, 2009 (boomark / email).