Bankruptcy lawyers are overcharging the Catholic Diocese of Spokane, according to the U.S. Trustee, a federal official who watchdogs the bankruptcy case.
Lawyers working on the case bill in six-minute increments, whether the time is spent arguing in court, setting strategy or reading case-related e-mails. Based on billings throughout the year, it appears attorneys will have accrued fees in excess of $3 million by the time the case is a year old in December.
U.S. Trustee Ilene Lashinsky reviewed some of the early bills submitted to the diocese and contends in recent court filings that four firms overcharged a total of $294,000 for such things as having multiple attorneys at court hearings and doing duplicative work.
Diocese attorney Shaun Cross sharply criticized the objections by Lashinsky, saying it was she who erred early in the case by appointing two creditors’ committees, resulting in the hiring of two high-priced law firms from Seattle and Los Angeles to represent them.
“I’m proud of the work our firm (Paine Hamblen Coffin Brooke and Miller) has done, and I’m confident of the reasonableness of our fees,” he said. “I regret her objections and take great umbrage at her attacks on our professionalism and integrity.”
The trustee’s office declined to comment on the objections filed in federal bankruptcy court this week.
The trustee has asked U.S. Bankruptcy Judge Patricia Williams to withhold:
“ $150,000 from Paine Hamblen.
“ $89,000 from Riddell Williams, the Seattle firm representing a small creditors’ committee of alleged victims who have not hired lawyers or sued the diocese.
“ $40,000 from Pachulski Stang Ziehl Young Jones & Weintraub, the Los Angeles firm representing the creditors’ committee of alleged victims who have filed legal claims against the diocese. The law firm won a landmark ruling earlier this year that found parish assets, such as churches and schools, are owned by the diocese and should be made available to settle sexual abuse claims.
“ $15,000 from Esposito George & Campbell, which acts as local counsel for the Pachulski Stang creditors’ committee.
The trustee’s office said the two creditors’ committees have failed to work together, thereby unnecessarily duplicating work.
The two committees remain deeply distrustful of each other, a holdover from the early days in the case when the trustee first appointed one committee that did not grant a majority of the seats to the group of alleged victims who hired attorneys to press their claims of sexual abuse by priests.
Stang, who represents these victims, said he was not about to go against his clients’ wishes.
“Lawyers do not operate in a vacuum,” he said. “In the end I am answerable to the committee I represent. I am not about to go sneaking around behind their back to strike deals with … a committee they don’t trust.”
Stang did say the two committees cooperated on some motions.
He added that he believes the firms have been fair in their billings.
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