The good news for those owed money by lawyer-turned-scam-artist Scott Rothstein is cash has started flowing into his law firm's bankruptcy estate. The bad news for Ponzi victims is the professionals are first in line to claim it.
The court-appointed bankruptcy trustee for Rothstein Rosenfeldt Adler had $13.4 million on hand Thursday.
Trustee's attorney Paul Singerman, a partner in Fort Lauderdale, Fla.'s Berger Singerman, said the cost of operating the estate has been cut dramatically to about $20,000 per month, not including professional fees.
More money is expected as well.
Settlements provide for $4.68 million from Rothstein financial adviser Michael Szfranski and $700,000 from former RRA partner Steve Lippman. The U.S. government also has agreed to send $680,000 from seized bank accounts to the estate, Singerman said.
The U.S. Attorney's Office last month said it expected to collect $50 million to $60 million to distribute in Rothstein's criminal case to victims of his $1.2 billion Ponzi scheme, which produced a 50-year prison sentence.
A lot of the new bankruptcy cash is from Ed Morse, the South Florida car dealer who was a top investor in the settlement financing fraud.
Singerman said professional fees so far total $1.7 million. Besides Berger Singerman, the law firms of Genovese Joblove Battista and Akerman Senterfitt and the accounting firm Berkowitz Dick Pollack & Brant have worked on the bankruptcy case.
They will be back in court Tuesday before U.S. Bankruptcy Judge Raymond B. Ray with fee requests.
Singerman said the bankruptcy case is now moving into the second phase -- litigation. Trustee Herbert Stettin has filed several lawsuits to recover money for creditors.