Lawyers Denied Request for $48-Million Bonus
A federal judge on Wednesday rejected a $48-million bonus sought by the law firm that represented Orange County in its bankruptcy litigation, bringing the county a big step closer to recovering from the 1994 financial crisis.
The ruling lifts a final barrier that will allow officials to pay out the $865 million in settlements from the various Wall Street firms that the county accused of helping cause the largest municipal bankruptcy in U.S. history.
The sum will be shared by 200 government agencies and school districts that lost nearly $1.7 billion in the ill-fated investment pool administered by former treasurer Robert L. Citron.
The payments have been held up since September by a last-minute demand from Hennigan, Mercer & Bennett for $48 million in legal fees on top of the $26 million the firm has already received.
U.S. District Judge Gary Taylor agreed that the firm was entitled to an adjustment under their contract, but called the firm’s own calculations a “huge magnitude leap” from a fair hourly rate. He ruled the firm was entitled to $3 million in additional compensation.
County supervisors and community activists said they were glad to move forward but remained critical of the lawyers.
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