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Judge in Heller Case Hears Objections to Attorney Fees, Proposed $19 Million Settlement
The Recorder
November 02, 2009
One brave former Heller associate tookto the podium in front of Judge Dennis Montali on Thursday, demanding a clearer liquidation plan and questioning the $1 million fee proposed for the employees' lawyers at Blum Collins.
At a hearing on the employees' $19 million proposed settlement in the bankruptcy, David Simon's voice quavered slightly as he began to speak to a courtroom full of experienced bankruptcy attorneys and litigators and to a judge well-known for his intelligence and wit.
As the young attorney stood up, Montali ruffled him, asking if he was an objector. Simon stumbled a little, saying, "I guess I'm an objector."
But he got up his nerve and went straight to the point.
"Going over the proposed class action settlement, I'll tell you that it's nearly impossible to understand," Simon said. "And that's my objection here today. And that is: The court is going to be asking not just associates, but paralegals, secretaries and file clerks to give a thumbs-up or thumbs-down on something that most of them I believe won't be able to understand."
Montali agreed with Simon's request that the plan provide several examples of how various employee claims might be treated under the plan.
Simon also questioned the $950,000 that Blum Collins would get under the settlement, pointing out that employees would have been owed nearly the same amount of money even if they hadn't hired lawyers.
"I do understand that there has been some, or a lot, of battle over the WARN Act claims. And maybe that is where Mr. Blum and Mr. Collins and their colleagues hang their hat, but I do call into question how much money of those WARN Act claims will be actually paid out, not mythically written down as a general unsecured claim at possible 20 percent, but how much will actually be paid out, how much benefit they actually made for the class members versus how much they were paid," Simon said
Montali said he understood Simon's argument, but didn't comment further.
The WARN Act claims in the settlement are about $6 million.
A post on Heller Highwater from the four named employee plaintiffs in the class action praises Blum Collins' work and urges employees to support the settlement.
Simon was a junior associate in Heller's litigation department. He was one of the first to file suit against his old firm, for about $57,000 in unpaid wages.
This article first appeared on Legal Pad: A Cal Law blog.
