Executor of Hillbloom Estate responds to orders

Russell K. Snow Jr., trust officer of the executor, stated that he “understands Judge Castro’s concerns regarding the amount of legal fees expended to administer the Estate,” according to a news release from the Bank of Saipan (executor) this week.

In addition to the Executor’s attorneys, Mr. Snow points out that over $12 million in fees have already been paid to lawyers for the children of Larry Hillbloom and the Trust. The payments to the lawyers for the Hillbloom children alone are in excess of $8.5 million. This is in addition to a large percentage of the children’s share of the Estate that attorneys will also receive. “This is an amount of money which apparently is of concern to this Court.” The appropriateness and resonableness of the contingency fee arrangements are the subject of Special Master’s proceedings before Special Master Rexford Kosack.

Judge Castro has stated that the appointment of Special Master Rexford Kosack has “resulted from the Court’s concerns that have developed from presiding over the many hearings in this complicated case. This proceeding has been complicated by the obvious realignment of factions among the parties and by the history of agreements, often undisclosed, that were entered into between adverse parties of their counsel.”

Mr. Snow stated that he understands and agrees with the Court’s concerns and stated that the Special Master’s proceedings are really about full disclosure and protecting the interests of the Hillbloom children. Snow stated that the court “wants to know where the money the Estate has paid (to the children) so far, has gone. It wants to know about the reasonableness of the contingency fees of the lawyers of the children. The Court wants to be sure that in the future when it pays out large sums of money belonging to these children, the money will be safe, and that nobody will be able to steal it. The Court is trying to protect the interest of these children.”

Nothwithstanding vehement objections, and aggressive efforts by certain lawyers of the Hillbloom children to stop the Court from looking into their fee arrangements, Judges Castro and Bellas reaffirmed the need and appropriateness of Special Master’s proceedings in a February 11, 1999 Order.

“The Court is interested in full disclosure and protecting the children,” stated Snow. He further expressed that he does not understand the repeated objections to full disclosure by counsel of some of the Hillbloom children. As far as any allegations of conspiracy and conclusion of the Executor and its attorneys by some of the counsel of the Hillbloom children, Mr. Snow stated that “such allegations are completely without merit and false.” He stated further that “these allegations are a tactic apparently being employed by some of the attorneys to draw attention away from the issues and concerns which the Court may have about their conflicts and agreements.”

“The Bank of Saipan has been examined by the Federal Deposit Insurance Corporation, the CNMI Department of Commerce, Division of Banking, and annual audits by Deloitte & Touche, it has nothing to hide (or any way in which it could).” Tomas Aldan, chairman of the Bank of Saipan, agrees that much of the actions of attorneys for the children and the Trust are an effort to further their own agendas.

In another proceeding, Special Master Pedro Atalig recently issued an order yesterday temporarily suspending payment of fees to the Executors’ lawyers pending a review of the reasonableness of the past legal fees. The review of the Executor’s professional fees is pursuant to Judge Pro Tem Castro’s December 23, 1998 order appointing retired Associate Justice Atalig to serve as the Court’s Special Master for the purpose of reviewing “the reasonableness of both past and future professional fees.”

Mr. Snow indicated his understanding of the Court’s concerns, and stated that it was also part of the required review which would be necessary before the probate is closed. He went on to say that the Bank has negotiated fee and cost discounts with many of the professional firms which, in conjunction with fee caps, has resulted in savings of millions of dollars to the Estate.

There have been no discounts negotiated for the money paid to the attorneys for the children or review for reasonableness.