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U.S. District Court Chief Judge Frances Tydingco-Gatewood reduced the professional fees approved for the Archdiocese of Agana's accounting firm and special immigration counsel in the church's bankruptcy case, for not complying with court orders and laws that require all bankruptcy-related billings and payments to be submitted to the court for approval, the Guam Daily Post reported. Davis & Davis PC and Deloitte & Touche LLP requested and received direct payment from the archdiocese, despite the court's issuance of "several orders dealing with the proper procedure to seek compensation," the judge said. Assistant U.S. Trustee Curtis Ching noticed the direct payments and asked the court to reduce the compensation to these firms because of violations of court orders, the Bankruptcy Code and the Bankruptcy Rules of Procedure. "These requirements are intended to protect against the 'unfairness of allowing the debtor to deplete the estate by pursuing its interests to the detriment of the creditors'," the judge wrote in her order. The creditors in the archdiocese's chapter 11 bankruptcy case include mostly clergy sex abuse claimants, who have yet to receive any compensation from the archdiocese. 

A Manhattan real-estate lawyer under criminal investigation by New York City and federal authorities allegedly can’t account for $17 million in client funds, according to liquidators called in to sift through his failed law firm, WSJ Pro Bankruptcy reported. The collapse of real estate firm Kossoff PLLC has destroyed livelihoods, tarnished reputations and left a trail of unpaid creditors behind, said liquidation attorney Neil Berger during a court hearing yesterday. Lawyers are only beginning to sort through the trove of documents associated with the defunct firm, which was pushed into liquidation last month after a wave of civil allegations that its namesake lawyer had absconded with client money. Berger said in a virtual hearing in the U.S. Bankruptcy Court in New York that liquidators are focused on collecting books and records for their investigation of the allegations and the firm’s collapse. The whereabouts of the firm’s top lawyer, Mitchell Kossoff, have been unknown since last month, according to the liquidators, who sought a court order yesterday forbidding anyone from taking or destroying documents from the firm’s offices at 217 Broadway or anywhere else. The Manhattan district attorney’s office and the U.S. attorney’s office in Brooklyn also are investigating Mr. Kossoff, whose lawyer said in the hearing that many of the documents at issue had been seized by prosecutors. Before the firm’s bankruptcy, Mr. Kossoff was accused in lawsuits of disappearing with client funds that were supposed to be sitting in escrow for real estate deals. He hasn’t been charged with a crime.