The Boston-based counsel for the NMI Retirement Fund is now asking to be paid $488,882 instead of the $750,937.82 it earlier demanded as payment for professional services and expenses.
Jeremy B. Coffey of the Brown Rudnick LLP law firm asked the U.S. District Court for the NMI Bankruptcy Division yesterday to order the Fund to pay the amount within five days of its ruling. He also asked the court to overrule all objections to the amount.
Coffey said this was an extraordinarily difficult and complex case and that the Fund’s board of trustees exercised its business judgment to seek Chapter 11 protection after considering all options, the pros and cons of a bankruptcy petition, and related risks and potential benefits.
He said that Brown Rudnick agreed to further cut its fees and expenses from the already-discounted amounts in its original billing in recognition of the situation in which the Fund finds itself and the fact that the Fund was not ultimately able to use Chapter 11 to address its financial problems.
Coffey pointed out that prior to the start of the bankruptcy case, their law firm assisted the Fund’s Saipan-based counsel without charge for about six months. At Brown Rudnick’s usual rates, that would have cost about $187,000.
“Brown Rudnick has not, and will not, seek compensation for such services,” he said.
As a result of their negotiated flat rate of $475 per hour for all their attorneys performing services for the Fund, the Fund received a discount of about 20 percent, he said.
In addition, Coffey said, their law firm voluntarily wrote off 204.6 hours of time incurred between the petition date and the date of the application, valued at around $95,000.
Additional negotiations between Brown Rudnick and the Fund further cut the total bill to $488,822, Coffey said, which translates to a further discount of $277,115.66 or 36 percent from the already discounted amounts.
Ultimately, he said, the revised amount is a 49-percent discount from Brown Rudnick’s normal rates for time actually billed, time written off, and time associated with a potential appeal of the dismissal of the case (for which the law firm is not seeking compensation).
This settlement, Coffey said, is a “give and take” on numerous points and reflects efforts to achieve a fair result and avoid any unnecessary litigation or further expenses.
“Brown Rudnick believes that it has carried its burden with respect to establishing that the fees incurred are reasonable, and it further believes that the objecting parties have failed to provide adequate evidence to carry their burden of proving how those fees are unreasonable,” Coffey added.
The law firm’s unrevised application claims that the Fund owes it $704,293.50 as compensation for professional services and $46,644 as reimbursement for expenses, for a total of $750,937.82 covering the period of April 17, 2012, when the Chapter 11 was filed, through June 13, 2012.
The CNMI government, the Commonwealth Ports Authority, and two members of the Official Committee of Unsecured Creditors have raised objections to the amount, describing it as unreasonable.
The Office of the Attorney General had asked the court to reduce Brown Rudnick’s compensation and reimbursement by 85 percent-to just $112,640.67-instead of $750,937.82.