Michael Avenatti has been ordered by a bankruptcy judge to explain why he put his law firm into chapter 11 last week, WSJ Pro Bankruptcy reported. Bankruptcy Judge Catherine Bauer on Wednesday dismissed the chapter 11 case of Eagan Avenatti LLP and barred the lawyer from placing the firm back into bankruptcy for 180 days. Avenatti filed the bankruptcy on March 7, the night before his former business associate Jason Frank was scheduled to question him about the firm’s finances. Frank has been attempting to collect a $10 million judgment against Eagan Avenatti relating to his departure from the firm. Judge Bauer could sanction Avenatti if she determines he made the chapter 11 filing in bad faith, a claim he and his lawyer have denied. Judge Bauer said on Wednesday that she would tentatively schedule a hearing for May.
The judge presiding over the Archdiocese of Agana bankruptcy case is questioning the legal fees sought by an attorney who specializes in extracting maximum settlements from insurance companies, the Guam Daily Post reported. Ford Elsaesser, the bankruptcy attorney for the Archdiocese of Agana, asked the court for approval to hire James Murray of the Philadelphia law firm of Blank Rome LLP during a motions hearing Friday in the District Court of Guam. Murray leads Blank Rome's insurance recovery practice. His normal fee is $1,025 an hour. He has agreed to provide a 25 percent discount if he is hired to recover damages from the insurance companies who provide liability coverage for the archdiocese. That would bring his rate down to $755 an hour. Legal fees on Guam generally range from $150 to $300 an hour. "When I first saw those fees, I was shocked," said Chief Judge Frances Tydingco-Gatewood of the District Court of Guam. She said this is not New York City, "that's way too much money." Elsaesser acknowledged that Murray's rates are "substantially" above local legal fees, but he said Murray's "specialty is unique." Edwin Caldie, the attorney for the unsecured creditors' committee, said that the victims are aware of the fees and comfortable with the choice of Murray. The committee represents the victims and they have the right to challenge any settlement agreements. However, Tydingco-Gatewood expressed concern about the precedent, saying that the rate she agrees to "could change the landscape" for legal fees on Guam. The judge took the matter under advisement and said she would issue her decision next week.
