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The trustee in the bankruptcy case of Ponzi operator Scott Rothstein‘s defunct law firm has settled disputes with seven attorneys over future legal fees from cases they handled while employed at Rothstein Rosenfeldt Adler. In motions filed late Thursday, trustee Herbert Stettin seeks approval of settlement agreements with Russell Adler and six attorneys who banded together when they left RRA: Gary Farmer, Steven Jaffe, Matthew Weissing, Brad Edwards, Mark Fistos and Seth Lehrman. The agreements submitted to U.S. Bankruptcy Judge Raymond Ray for approval provide for the trustee to get a percentage of recoveries on unresolved cases the former RRA attorneys are handling for clients in the door before Rothstein’s $1.2 billion fraud collapsed last Nov. 1. No dollar amounts are listed, but Farmer said the total uncollected fees could exceed $10 million. That would include several class action cases and qui tam actions his new firm is working on, including cases against NationsRent, a home health care agency and Palm Beach millionaire Jeffrey Epstein, who has been sued for allegedly abusing teenage girls. In Adler’s case, the trustee’s percentage will be 15 percent or 20 percent. The lower percentage covers cases where suits had not been filed. The others’ percentages range from 5 percent to 25 percent. The settlement applies only to contingency fees, which could be why former equity partner Stuart Rosenfeldt, who billed hourly as a labor lawyer, wasn’t included. Client names and legal issues were blacked out in attachments filed in court records. Farmer said his firm agreed to the settlement because the trustee placed liens on its RRA cases, and fighting them in court could tie up attorney fees for more than a year with appeals. The settlement ends three months of negotiations on the issue. “It was a business decision at the end of the analysis,” he said. “The trustee’s attorneys get paid hourly. We eat what we kill. Waiting a year and a half is not good for your business model. . . . We hope this puts us one step closer to fully and completely putting Scott Rothstein out of our minds forever.” Scott Underwood, a Fort Lauderdale attorney representing Adler, said, “We are pleased to be able to work out these issues with the trustee.” The settlement motions filed by Berger Singerman, one of Stettin’s law firms, said: “The expense, inconvenience and delay that would be caused by litigating the estate’s entitlement to legal fees and costs and expenses regarding the relevant cases would not be in the best interest of the estate.” The proposed settlement would not affect an adversary case the trustee is pursuing against Adler to recover about $1 million in allegedly ill-gotten gains, including a $500,000 Manhattan apartment. Adler is fighting that action. Stettin has no similar case against Farmer and the other lawyers, who now practice together at the Fort Lauderdale law firm Farmer Jaffe Weissing Edwards Fistos and Lehrman. RRA dissolved last November following disclosures that Rothstein was being investigated for running a Ponzi scheme based on phony settlement financing out of the Fort Lauderdale law office. So far, only Rothstein has been criminally charged in the matter, but federal prosecutors said the investigation is continuing.

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