The law firms of Dewey & LeBoeuf and Young, Conway, Stargatt & Taylor have recently encountered their second attack on the Dodgers’ bankruptcy case in relation to fee disputes. The first came on September 23, when Major League Baseball alleged that the law firms were working in the interests of Frank McCourt, the team’s owner, instead of the Dodgers. The second is in regards to a finance deal with Highbridge Principal Strategies.
The period in dispute is from June 27 through July 31. The U.S. trustee has objected to $350,000 in legal fees and expenses during this period. Mark Kenney, the trial attorney, stated the work billed was “not reasonably likely to benefit” the team.
Dewey & LeBoeuf
Dewey sought more than $1.7 million in compensation and $32,000 in expenses. Over $1.1million of the charges, and 2,000 hours of work, were spent on the financing deal. Kenney argues that compensation should be reduced by $312,000.
Young, Conway, Stargatt & Taylor
Young sought more than $267,000 in compensation and $41,000 in expenses. Over $104,000, and 256 hours of work were spent on attempts to obtain financing. Kenney argues that compensation should be reduced by $41,000.
The Deal
The law firms sought court approval for a $150 million deal, that required the Dodgers to pay a $5.25 million closing commitment fee and a $4.5 million deferred commitment fee. Major League Baseball countered the Highbridge deal with a competing offer that excluded both commitment fees.
It is reported that the law firms continued to negotiate the deal, even after the counteroffer. Despite the counteroffer, the firms still seek $310,000 and $32,000 in fees, respectively. Kenney argues that such work and negotiations were not necessary to the case and as such, not compensable.
Judge Kevin Gross rejected the Highbridge deal on July 22. Both firms have submitted fee applications for August, and Young has submitted a fee application for September.
