Hillblom executor files petition

Recently, the Bank of Saipan, Executor of the Estate of Larry Hillblom, filed a petition for a $50 million preliminary distribution to the distributees of the Estate according to a Settlement Agreement entered into in late 1997, the Tribune has gathered.

Under the Settlement Agreement, the distributees are four children and a charitable trust established pursuant to Hillblom’s will. The four children of “Qualified Heir Claimants” under the Settlement Agreement are: Junior Larry Hillblroom, 14, of Palau; Jellian Cuartero, 4, from the Philippines; Mercedita Feliciano, 3, from the Philippines; and Nguyen Be Lory, 4. of Vietnam.

Of the proposed $50 million distribution, $30 million will be divided between the four Hillblom children and $20 million will go to the Trust.

Although each of the children has received $5,000 per month since May 1998 and the lawyer for the children and the lawyers for the Trust have already received over $12 million in payments, this will be the first multi-million dollar distribution intended for Hillblom’s children and the Trust since his mysterious death in 1995.

Additionally, the children’s lawyers will receive a percentage of the children’s respective shares according to separate contingency fee deals. The contingency fee deals plus previous payments could result in the children’s various lawyers receiving from 30 percent to over 40 percent of their client’s share of the Estate, according to sources.

The Saipan probate and guardianship courts have expressed concerns that the children’s interests be safeguarded and that they actually receive their share of Hillblom’s estate.

In a joint order issued by Probate Judge Pro-tem Alexandro C. Castro and Guardianship Judge Timothy H. Bellas, local lawyer Rexford Kosack was appointed Special Master to look into and report on the following:
1. The competence and independence of the guardians of the QHCs to protect their respective wards from financial and/or physical harm, including harm caused by potential distributees, their attorneys, relatives, guardians, or any third parties, and the adequacy of each guardian’s efforts to date.
2. The disposition of all payments made pursuant to the Settlement Agreement in this matter.
3. The legality and reasonableness of compensation to QHC attorneys and guardians, including any and all contingent fee and other compensation or reimbursement arrangements whether created or modified prior to or after entry into the Settlement Agreement in this case.
4. The existence of heretofore undisclosed compensation received or paid or expected to be received or paid to QHC attorneys, guardians, claimant’s relatives, or third parties.
5. The physical safety and welfare of the QHCs.
6. The necessity of a bond pursuant to Com.C.Civ.P.26 (d).

The Order requiring full disclosure and review has resulted in an attack on the Executor and its counsel by some of the attorneys for the children and the Trust.

They have accused the Executor’s counsel of improperly instigating a review of their dealings and have asked the Courts to stop the disclosure and review of their deals.

On February 11, 1999, the Court rejected the motions of David Lujan and Barry Israel (attorneys for Junior Hillbroom) and Randall Fennel and David Axelrod (attorneys for Jellian Cuartero) to stop a review of their arrangements.

The Court stated that the order appointing Special Master Kosack “resulted from the Court’s concerns that have developed from presiding over teh many hearings in this complicated case. The 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 or their counsel.”

The various attorneys of the children have ever accused each other of wrongdoing. Lujan and Israel have attacked the fees of counsel by Nguyen Be Lory, and suggested that Mr. Gallagher’s actions be investigated.

Mr. Gallagher, representing Nguyen Be Lory from Vietnam, responded by raising concerns and implications of serious wrongdoing and impropriety by Lujan and Israel.

In a February 26, 1999 filing, Gallagher raised five areas of concern for the Court’s consideration:

– “Are Lujan and Israel concerned with explaining why they have the highest contingent fee percentage of any of the Heir Claimants’ counsel?

– Will it be difficult for Lujan and Israel to explain why they have negotiated a substantial increase in their contingent percentage after they had already negotiated a settlement of the case?

– Perhaps Lujan and Israel are concerned that the total fees of their two-person team will exceed those of the 30-person Morrison & Foerster legal team?

– Perhaps Lujan and Israel are concerned over having to testify under oath in response to allegations that they were somehow involved in criminally obtaining DNA from Mr. Hillblom’s mother, Mrs. Anderson.

– Are thay concerned with how to explain the numerous side deals and additional compensation arrangements that they have negotiated and received in this case?”

Rather than complying with the Court’s order, the Lujan and Israel team and the Fennel and Axelrod team continue to try to stop the disclosure and review process by applying to the CNMI Supreme Court. The Supreme Court in this matter is Justice Miguel Demapan, former Chief Justice Marty Taylor and Guam Judge Alberto Lamorena.

In a public statement, Executor’s counsel Jack Londen has stated: “The Superior Court issued orders to get answers to some important questions… the Court wants to know where the money the Estate has paid so far has gone. It wants to know about the reasonableness of the lawyers’ contingent fees. The Court wants to be sure that in the future when it pays out millions of dollars belonging to these children, the money will be safe and that nobody will be able to steal it.”