Otterbourg Successfully Represents Law Firm in Bankruptcy Fee Case
December 12, 2013
Kaye Scholer tapped Otterbourg to represent it in a dispute with the U.S. trustee in the GSC Group Inc. Chapter 11 case pending in the Southern District of New York. In January 2013, the U.S. trustee filed a motion seeking, among other things, the return of fees paid by the company to advisors Kaye Scholer and Capstone Advisory Group LLC since both Capstone and Kaye Scholer failed to disclose that an employee of Capstone acting as chief restructuring officer of the company was a contractor with a fee-sharing arrangement.
On December 12, 2013, U.S. Bankruptcy Judge Shelley Chapman in a 126 page decision approved the settlement negotiated by Kaye Scholer with the U.S. trustee. In her decision, the Judge was highly critical of Capstone; imposed significant fee reductions on Capstone; determined that ultimately the larger fault in this matter was with Capstone; was critical of Capstone’s lack of “remorse”; and noted the stellar work performed by Kaye Scholer during the case.
In her opinion resolving the matter, Judge Chapman was complimentary of the approach taken by Kaye Scholer in dealing with the action brought against it by the U.S. trustee over its fees. The Otterbourg team that advised Kaye Scholer in its strategy for the litigation and the settlement was led by partner Scott Hazan and included David Posner.