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Lawyers submit big bill in Fair Finance case

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Most of the $1.8 million that Fair Finance trustee Brian Bash has recovered so far could go to attorneys and accountants working on the massive fraud case involving Indianapolis financier Tim Durham.

Bash’s Cleveland law firm, Baker Hostetler, accounts for the largest part of about $1.7 million in professional fees, which were recently submitted for approval by U.S. bankruptcy court in northern Ohio. The fees cover 2010 expenses. 

Bash has said he expects to recover $78.5 million more of the estimated $230 million that investors lost to Fair Finance’s alleged Ponzi scheme, the Akron Beacon Journal reported.

Indianapolis businessman Tim Durham bought Ohio-based Fair Finance in 2002 and used it to orchestrate the largest Ponzi scheme in state history, Bash alleges. Durham also faces criminal charges in Indianapolis, where he is under home detention.

Bash has gone after real estate, paintings and Durham's classic car collection. He's also filed multiple lawsuits and plans to file more, his counsel Kelly Burgan said in a recent petition for payment.

Bankruptcy judges have final say over payments to lawyers and other professionals working on such cases.

Baker Hostetler spent 4,516 hours on the case in 2010 and racked up $1.3 million in fees, according to the recent petition for payment. The filings do not include Bash’s hours.

The firm's hourly rates ranged from $680 for the top-paid partner to $120 for a law clerk. The average was $299 per hour.

Burgan logged nearly 1,344 hours at $400 per hour.

“Baker Hostetler takes seriously the losses suffered by the debtor’s investors in excess of $200 million,” Burgan wrote in the petition.

The firm’s efforts resulted in quick initial recoveries, plus the pending lawsuits, she noted.

Forensic accounting firm Howard L. Klein Co. in Beachwood, Ohio, submitted a bill for $298,156 for 1,327 hours of work, or an average rate of $224 per hour.

Attorneys Michael Moran and David Mucklow, special counsel to Bash, and Baker & Daniels, Bash’s attorneys in Indianapolis, also submitted bills.

More of IBJ's coverage of Tim Durham and Fair Finance can be found here.

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  • Re: Attorney fees
    To Bryan: I understand your objection to a $680/hr. rate. It may be so large as to be unreasonable under the circumstances. But you can't seriously think that the lawyers should get paid last. If the lawyers get paid last, there won't be any lawyers to work on the case. Then nothing will be accomplished.

    To "Scam": The legal profession is regulated, mainly by the Supreme Court in each state. You are free to file a grievance with the Supreme Court's disciplinary commission about "scumbag" $200/hr. rates. Don't be surprised when no one takes you seriously. Lawyers, like most folks, generally charge what the market will bear for their skills. Right now, the market will bear $200+/hr.
  • Re
    Especially since a forensic specialist named Erich Risenberg in Iowa spoonfed the trustees office countless hours of work for free--for example, on the bill Joe Esmont bills for "researching Diamond Auto Sales on the internet"--ridiculous because the UCC filings as well as the lack of paying sales tax and the phone number and email address for Don McCloud, who at the time ran the dealer sales tax division, as well as the phone number and pictures of the closed pretend auto dealership, were provided directly to Esmont. So much for two hours of research.
  • I've said it before...
    ...but I'll say it again. I'm willing to bet that Bash et al are going to make sure they keep every dollar that they recover from this circus. 2011 fees aren't even included yet in that $1.7 million figure -- it only covers 2010.

    "Bash has said he expects to recover $78.5 million more" and yet back in March he himself said "all of the 'low-hanging fruit' has been plucked".

    How much longer will the bankruptcy courts allow him to go on racking up fees with no progress to show for it?
  • What about??
    Scam, I agree, but do you have any idea how much Peyton Manning makes an hour?
  • Better Question To Ask
    How much is Durham spending on his attorneys and how is he able to afford it considering the efforts of creditors, plaintiffs, and federal prosecutors to free and liquidate assets for victims?
  • Truly the crook
    There is not a person that is worth more than $200/hour. Let alone a scumbag attorney. What truly do they do???? This is the most unlooked at industy. We should all look at attorneys as SCUM
    • It Would Be Nice
      It would be nice, but that just ain't gonna' happen...
    • Fair Finance
      Just goes to show how overpaid attorneys can be
    • Lawyer fees in Durham case
      It seems to me that those who were the victims of the Durham swindle scheme should be paid back first by the Trustee and Courts. Then the lawyer should get whatever is left in the pot. $600 per hour is an unreasonable billing amount as is even $299. The court should approve no more than $150 per hour billing, but should also rule that payment to the law firm be made after the victims receive their money.

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