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Milberg Claims Firm Cheated out of $12M Fee in Argentine Bond Case

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Milberg Claims Firm Cheated out of $12M Fee in Argentine Bond Case G THE B IN EN V C R H E S A N 8 D 8 B 18 AR CE WWW. NYLJ.COM SIN MAY 8, 2019 Milberg Claims Firm Cheated Out of $12M Fee in Argentine Bond Case The firm said it was fired shortly before it should have received a major contingency fee from a group of European investors who sued Argentina for defaulting on its sovereign debt. By Jack Newsham disputes panel in February 2019 that found the investors’ payments he plaintiffs firm Milberg has to Milberg and its other lawyers, sued a group of European totaling $513,000, was sufficient. The investors that it previously neutrals at the International Centre represented in years of for Dispute Resolution acknowledged Argentina bond litigation, Milberg had done more work for the Talleging the investors fired the law HWB group than the firm’s billing firm to avoid paying an $11.9 million records might indicate, but said fee. In the suit filed Monday, the New “qualitative considerations have York firm is asking a federal judge their limitations,” and said no further to throw out an arbitral award that fees were merited. left Milberg with a mere $87,000. “Anyone with passing familiarity According to Milberg’s suit, with complex litigation prosecuted filed in Manhattan federal court, on a contingency fee basis … would be shocked to learn that money manager Hans Wilhelm Jay Auslander of Wilk Auslander LLP Brand fired the firm shortly after a hard-fought case lasting well receiving a $162 million settlement over a decade, which resulted in previously paid $110,000 to Dreier offer from Argentina and learning a settlement recovery by plaintiffs and around $300,000 to Argentine that Milberg would be entitled to of $162 million, could end with an lawyer Patricia Rosito Vago and her an $11.9 million contingency fee if award of fees to plaintiffs’ counsel nonlawyer husband, the arbitral he accepted. People and entities of zero,” the law firm said in its award said in a footnote. whose money Brand managed, petition Monday. (The firm was Michael Spencer was the lead called the HWB investors, switched paid $87,000 before the arbitration Milberg lawyer on the Argentine lawyers and reached a nearly over legal fees began.) bond cases, according to the identical settlement a year later, Documents Milberg filed in its suit arbitral award, and the firm said according to Milberg’s suit against indicate that it took over the HWB the HWB group was its biggest the investors. entities’ claims from Marc Dreier Argentine bonds client. Milberg Milberg said it initiated arbitration by 2010, after Dreier admitted received between $5 million and against the HWB investors in 2017 to orchestrating a massive $5.5 million from other clients for seeking legal fees, but received a investment fraud scheme and his its work on those cases, the award stunning decision from a three-man law firm failed. The clients had said. MAY 8, 2019 The arbitrators noted that Milberg clocked 172 attorney hours and 90 paralegal hours on the HWB entities’ cases, worth $142,900, but spent “more time on the representation of HWB than is reflected in its HWB-specific time records.” Still, the panel declined to award Milberg any more than it had been paid, saying the $513,000 the HWB investors had paid to all their lawyers was “a reasonable total fee recovery.” In its lawsuit, Milberg, which reorganized in 2018 and now does business through the firm Milberg Tadler Phillips Grossman, argued that the award should be vacated Diego Giudice/Bloomberg Stacks of 100 Argentine pesos. because it showed manifest disregard for the law. will not reasonably be challenged.” Leslie Corwin of the law firm After firing Milberg, the award William Dahill, a Wollmuth Maher Eisner, who represents Schulman, said, the HWB clients hired the firm & Deutsch partner who represents declined Wednesday to state Wilk Auslander to go to bat for Milberg, declined to comment, as did whether the same was true for his them; that firm was paid $1.6 million Spencer, who is listed as of counsel client. “We hope they’re successful after billing $2.3 million, according on the website of Milberg Tadler. in this thing because we’ve got to the award. Milberg argued that The lawsuit, and the possibility an interest in it,” Corwin said Wilk Auslander failed to secure a that Milberg may forego nearly $12 about Milberg’s suit against HWB better settlement than Argentina million in fees, comes amid other investors. offered in 2016 through its bond recent litigation reflecting significant dispute settlement program known financial pressure on the law firm. Jack Newsham writes about the as the “propuesta.” Steven Schulman and David New York legal community and But Wilk Auslander partner Bershad, former partners at a the business of law, including law Jay Auslander, a lawyer for HWB Milberg predecessor firm who firm finance and management and investors, said in an interview that were sent to prison for their role the battle for talent. Email him at Milberg had ridden the coattails in a corruption scandal, have both [email protected] and find him of other law firms whose clients sued Milberg and Milberg Tadler on Twitter @thenewsham. held much greater amounts of in New York state court in the last Argentine bonds. It was those few months for allegedly failing to firms that did the heavy lifting, he pay amounts due to them under said, not Milberg. various agreements with Milberg. “That [Milberg] caused the They said Milberg Tadler lawyers propuesta is, in our view, absurd,” have said Milberg simply doesn’t he said in the interview. “We had a have the funds to pay them, but highly qualified, highly experienced the ex-partners argue that Milberg three-lawyer panel that had a very Tadler can be held liable. high level of juridical sophistication Bershad said in a letter filed in Reprinted with permission from the May 8, 2019 edition of the NEW YORK LAW and heard a tremendous amount of late April that settlement talks are JOURNAL © 2020 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, contact 877-257-3382 evidence. … We believe their award ongoing. or [email protected]. # NYLJ-05272020-449783.
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