Make us your home page
Instagram

Fees could swallow Lou Pearlman settlement money

Lawyers and accountants working on the Lou Pearlman and Trans Continental bankruptcy cases submitted bills this week that bring the fee and expense tally to more than $5-million — more than their efforts have recovered.

Pearlman, a former Orlando music producer, admitted stealing $300-million from banks and investors and was sentenced to 25 years in prison. Escalating fees make it more likely that Pearlman's victims will never see a dime.

Bankruptcy trustee Soneet Kapila has recovered about $4-million in assets since the bankruptcy process began in March 2007. Additional efforts are pending, including lawsuits against some of Pearlman's former associates. Kapila, his lawyers and accountants have been working without pay, hoping to recover money later. He said they delayed asking for payment until they had some results to show.

"We wanted to make sure that we had done enough work to demonstrate that the work wasn't wasted, he said. "It's a major financing burden to everyone who's working on the case."

The biggest bill is from the law firm Akerman Senterfitt, which asked for $1.9-million. Kapila's accounting firm, Kapila & Co., put in a $1-million bill, but Kapila said it does not include anything for his work as trustee. Some of the lawyers billed at a rate of $500 an hour.

Kapila said he will propose that only a portion of the cash collected be used to pay the lawyers and accountants a percentage of their fees. "We're not going to pay the entire $5-million," he said.

News of the legal bills prompted griping on the Times' MoneyTalk blog (blogs. tampabay.com/money), which has been following the Lou Pearlman case and has more details on the bills.

However, the chairman of the court-appointed creditors committee defended Kapila.

"The trustee and the professionals are not the guarantors of success and they have done as good a job as possible to date under the very difficult and complex facts of this case," said Lawrence Rifken. "They have provided the working capital for this case when no one else would or could."

Helen Huntley can be reached at hhuntley@sptimes.com or (727) 893-8230.

Fees could swallow Lou Pearlman settlement money 06/26/08 [Last modified: Friday, June 27, 2008 7:05pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Rick Scott appoints 'my friend,' Jimmy Patronis, as Florida CFO

    State Roundup

    TALLAHASSEE — Gov. Rick Scott on Monday appointed a long-time friend and political supporter, Jimmy Patronis, to replace Jeff Atwater as Florida's next chief financial officer, making him one of three members of the Cabinet that sets state policy on a wide range of issues. He'll take over Friday.

    Rick Scott appoints Jimmy Patronis (background) as CFO. [STEVE BOUSQUET | Tampa Bay Times]
  2. Local gas prices plummet as Fourth of July holiday travel approaches

    Tourism

    TAMPA — Local gas prices are enjoying an unseasonal dip around the $2 mark just in time for the hectic Fourth of July holiday travel weekend.

    The price of regular unleaded gasoline has dropped to $1.99 at a Rally station on Pasadena Ave. South and Gulfport Boulevard South, South Pasadena.
[SCOTT KEELER   |   Times]

  3. Air bag recalls, lawsuits lead Takata to file for bankruptcy

    Autos

    Shattered by recall costs and lawsuits, Japanese air bag maker Takata Corp. filed Monday for bankruptcy protection in Tokyo and the U.S., saying it was the only way it could keep on supplying replacements for faulty air bag inflators linked to the deaths of at least 16 people.

    Japanese air bag maker Takata Corp. CEO Shigehisa Takada bows during a press conference in Tokyo on Monday. Takata has filed for bankruptcy protection in Tokyo and the U.S., overwhelmed by lawsuits and recall costs related to its production of defective air bag inflators.
[(AP Photo/Shizuo Kambayashi]
  4. Airbag maker Takata bankruptcy filing expected in Japan, U.S.

    Corporate

    DETROIT — Japanese airbag maker Takata Corp. has filed for bankruptcy protection in Tokyo and the U.S., overwhelmed by lawsuits and recall costs related to its production of faulty air bag inflators.

  5. Federal agencies demand records from SeaWorld theme park

    Tourism

    ORLANDO — Two federal agencies are reportedly demanding financial records from SeaWorld.

    Killer whales Ikaika and Corky participate in behaviors commonly done in the wild during SeaWorld's Killer Whale educational presentation in this photo from Jan. 9. SeaWorld has been subpoenaed by two federal agencies for comments that executives and the company made in August 2014 about the impact from the "Blackfish" documentary. 
[Nelvin C. Cepeda/San Diego Union-Tribune/TNS]