by John Darer CLU ChFC CSSC RSP
New York Federal Judge Alvin Hellerstein ruled August 27th, that lawyers for more than 10,000 9/11 first responders, CANNOT collect more than $6 million in interest on loans that the lawyers took from Counsel Financial to finance the lawsuits. Counsel Financial is the lawsuit financing firm with widely reported ties to New York Speaker Sheldon Silver, the name principals of the law firm of Weitz & Luxenberg and who we reported is tied to NSSTA member Millennium Settlement Consulting and Integrated Financial Settlements (IFS).
For background see our August 22, 2010 story "Hearing to Investigate If New York Lawyers Overcharged 9/11 First Responders"
According to the New York Post, Judge Hellerstein cited an exclusive report in "The Post" and told the lawyers that they had to absorb the borrowing costs.
Hellerstein was said to have remarked " Beyond the legality, and beyond ethics, it's important to have a sense of balance"
What if any implication the decision has for the lawyers who stand to make $150M in legal fees from the $712M settlement (as well as any other large law suit financings) remains to be seen. William Groner, one of the name partners in the law firm now on the hook for the interest was quoted as saying " the ramifications of this are chilling".
Whether or not the lawyers decide to appeal the Hellerstein decision Groner recognized the conflict between the firm and its clients and conceded that the decision puts more money into the pockets of their clients. It was reported that another big New York City firm, Sullivan Papain Block McGrath & Cannavo did not attempt to charge interest to the 689 clients it represented in the same action.
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