Ex-Chairman Seeks Legal Payments From Cendant

Cendant Corp.’s former chairman, Walter Forbes, is seeking more than $1 million a month in legal fees from the company as he prepares for his federal accounting fraud trial April 19, court records show.

Forbes and former Vice Chairman E. Kirk Shelton are accused of inflating earnings for a decade at Cendant’s predecessor, CUC International Inc. A Cendant law firm made the fee disclosure in opposing a bid by Forbes’ law firm, Williams & Connolly, for company records to prepare for trial in Hartford, Conn.

Cendant, the world’s largest hotel franchiser, said Forbes wasn’t entitled to documents about company contacts with U.S. investigators since April 15, 1998, when it disclosed accounting irregularities at CUC. Forbes also seeks time records and bills of Cendant’s firm, Patterson, Belknap, Webb & Tyler.

“The Williams & Connolly bills submitted by Mr. Forbes -- which now exceed $1 million a month -- contain the bare minimum of detail and do not even identify the names of the attorneys working on the matter or the nature of any of the work,” Patterson Belknap said in the court papers, filed in Hartford.

Forbes and Shelton were indicted in February 2001, accused of creating phony income to boost CUC’s stock before it merged in 1997 with HFS Inc. to create Cendant. Forbes also is accused of insider trading.

An attorney for Forbes, Barry Simon, didn’t return a call seeking comment. Michael Drewniak, a spokesman for U.S. Atty. Christopher Christie, declined to comment.

Cendant, following a policy for executives, is advancing legal fees to Forbes and Shelton. It can seek reimbursement if they are convicted at trial. Company spokesman Elliot Bloom declined to comment.

Cendant is trying to recover $35 million in cash and $12.5 million in stock options that Forbes received in severance when he resigned in July 1998. That arbitration proceeding is on hold until after the criminal trial.