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Lawyers who are working on the Howrey bankruptcy stayed very busy over the holidays, filing multiple motions in late December that were aimed at moving along what is now a new trustee-supervised Chapter 11 bankruptcy.
Among some of the latest court filings: a motion by the Howrey estate’s unsecured creditors’ committee that are seeking bankruptcy court approval to cut their ties to a pair of federal putative class movements in which the firm lawyers had been representing Hispanic farmers who say that the federal government discriminated against them in some way.
The cases–Garcia v. Vilsack and Cantu v. United States, both of whom are pending down in Washington, D.C., federal district court–involve the claims that the U.S. Department of Agriculture routinely discriminated against the non-white farmers when granting their federal loans. Some similar class actions have yielded some settlements that are worth a combined total of more than $2 billion for Indian and black farmers, but the Hispanic plaintiffs’ cases have stalled without giving a settlement to anyone.
The creditors’ committee counsel Bradford Englander of Whiteford Taylor Preston argues in the motion that the Howrey estate cannot afford to continually pay a role in the litigation that has already cost the firm almost $32 million in fees and expenses over the past decade.
Englander points specifically to the expiration to the defunct firm’s malpractice insurance and the recent departure of the last three lawyers that are working on matters on the Howrey name as reasons why the estate should abandon the litigation on December 31. They continue to pay the $2.7 million malpractice insurance premium alone would be too big of a burden, says the motion, never minding the costs that are required to hire experts and perform the other tasks required to keep all of the cases moving along. At the same time as all of this, the motion states, dumping the cases should not affect the estate’s ability to recover all of the attorneys’ fees in the event that a settlement is going to be reached.
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The motion states that until December 22, three Howrey lawyers were working exclusively on the litigation, but that the trustee Allan Diamond told the trio shortly after being appointed to oversee the bankruptcy that their services would no longer be needed to come in the new year. (Englander and Diamond did not return any of the calls for a comment late on Monday.)
It was reported back in August that as of July, the former Howrey partner Stephen Hill and his ex-firm attorney Collette Harrell were still getting paid by the estate in some connection with their work on the class movements (Hill received $1,357 that month and Harrell received $5,570). It was not entirely clear on Monday where either attorney now works with/for or if they will continue to represent the Hispanic plaintiffs if the court will approve Howrey’s withdrawal from the new litigation.
