USBC Judge Albert sent a strong message to SH&B LLP completely denying their $211K Fee Application + making them disgorge $58K
Below is an article published today in the Daily Journal regarding a case in which I successfully opposed a $211,889.50 fee application from Debtor’s prior bankruptcy counsel, Schulman Hodges & Bastian, as well as my client’s five star review of my services:
OCTOBER 24, 2014 | BANKRUPTCY
Judge slaps Shulman Hodges with fee denial, disgorgement
A judge denied Shulman Hodges & Bastian’s $211K fee application as well
By Alex Shively
Daily Journal Staff Writer
A judge has tentatively ordered Shulman Hodges & Bastian LLP of Irvine to disgorge $58,000 in fees in the bankruptcy of a travel entrepreneur in Orange County.
U.S. Bankruptcy Judge Theodor C. Albert also tentatively denied a $211,000 fee application filed by the firm, which previously represented the debtor, Steve Sedgwick.
Sedgwick hired Shulman Hodges to help him with restructuring. When a trustee was appointed to take control of Sedgwick’s property, a split between him and his counsel developed.
Albert had earlier chastised Shulman Hodges for failing to notify the client or the court about its handling of Sedgwick’s assets.
“Some basic rules were either misunderstood or ignored,” Albert said.
In an interview, Irvine-based Shulman Hodges partner Mark E. Bradshaw defended his firm’s conduct.
“Sedgwick objected to paying any fees for his bankruptcy work,” Bradshaw said. “All of his subsequent allegations are completely groundless and we will dispute them. We gave him advice throughout his proceedings and he chose not to act on them.”
Albert gave Shulman Hodges 10 days to file a motion to reconsider; Bradshaw said he will file such a motion.
“We hope the court will see the full story,” Bradshaw said.
Sedgwick hired Beverly Hills-based Michael Jay Berger, founder of the Law Offices of Michael Jay Berger, after the split.
One allegation Berger brought before the judge was a conflict of interest, as Shulman Hodges was still representing Sedgwick even though it was a creditor for prior legal work.
Sedgwick said that he was told to consider changing counsel by Berger and his friend Robert K. Wing, another local attorney, who warned him that he faced even greater losses.
“I’m grateful to them for giving me a heads up that I should look elsewhere for counsel. So much of my private property is on the line,” Sedgwick said.
In his tentative ruling, Albert could not establish a reason to grant Shulman Hodges any of the fees it requested.
“If the firm has any argument,” Albert said, “it must be because it believes it has earned some or all of the funds in question. That has not been determined.”
For anyone considering a Chap 11 or assistance on evaluating a financial reorganization The Law Office of Michael Jay Berger, (ORI and staff) has been a 5 star experience. After having two previous attorneys botch my case for personal reasons and nearly drive my estate into liquidation, I hired Michael to salvage and get back on track. Within days of having my beachfront estate sold, Michael soon realized previous counsel was the reason I had lost possession of the estate. Today (10-22-14) Michael successfully won a motion that disgorged 100% of the fees paid to previous counsel and saw the Judge admonish along with the UST work provided by elite top 5 OC BK firm. I only wish I had started with Michael from the beginning as he has been honest, direct and would seek input to help better understand the case. He has been hands on and has appeared in person for court appearances. Great Job team you deserve attention for a job well done. Thanks for the early B day present as today I celebrate 52 knowing my retirement will be intact.