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Bankruptcies and Bloated Legal Fees

February 16, 1992

We read with interest Tom Furlong's article, "Many Firms Don't Survive Filings for Bankruptcy" (Jan. 13), which detailed the demise of A & B Transportation Services.

We have just emerged from a series of three inherited bankruptcies (both corporate and personal) that recently closed after five years of turmoil orchestrated by the attorneys "managing" our affairs.

As misfortune would have it, we engaged the same law firm as Vince Punaro, the owner of A & B transportation.

Our attorney fees were in excess of $450,000, (representing 40% of the remaining value of the estate upon completion of the cases). Thoroughly frustrated by the mounting fees and seemingly endless course of the cases, we contested our attorney's interim fee application in court.

The judge showed some sympathy, instructing our attorneys to reduce their fee application by 12%.

Fee caps for professionals must be an essential ingredient in any attempt at righting the corrupt system in Southern California.

While the mechanics and logistics of creating bankruptcy "deadlines" is significant, there must be legislation developed to prevent Chapter 11 cases from lingering in the courts for years, and by implication, fattening the already plump wallets of disorganized attorneys and their law firms. There is no financial incentive to get the job done in an expeditious manner.




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