Given a long-established principle that lawyers working in receivership situations should be awarded moderate fees, “the request for fees of $2,147,666 for 20 days of work is excessive,” said US District Judge Denny Chin in Manhattan.

Lawyers, paralegals and staff at New York’s Dewey & LeBoeuf logged over 5,500 hours on the WexTrust case, or more than 275 hours a day.

Chin determined that the law firm should receive $1.7 million for the work performed between August 11th and 31st. Dewey & LeBoeuf may apply for the difference between what it sought and what he awarded when the final distribution of WexTrust assets is made.

The law firm’s request was part of a joint application for compensation by Timothy Coleman, the court-appointed receiver for WexTrust and a partner at Dewey & LeBoeuf.

Chin approved the full amount of Coleman’s request for $57,300 in receiver’s fees. Coleman’s hourly rate had been cut to $250 specifically for the WexTrust case, from his standard rate of $850 to $950. The judge also approved a request of $66,640 in fees for the accounting and advisory firm Deloitte Financial Advisory Services.

Chicago-based WexTrust and two of its owners, Joseph Shereshevsky and Steven Byers, were charged by the SEC with defrauding investors by diverting $100 million of funds to unauthorized uses. Afterward, the court froze the defendants’ assets and appointed Coleman as WexTrust’s receiver.

Via PilotOnline.

• Judge Questions Dewey & LeBoeuf’s $600 Per Hour
• DLA Piper Announces Launch of New International Securities Group, Along With New Partner
• Freshfields Bolsters U.S. Litigation Practice
• Boutique to Cut Client Billing Rates in 2009
• White & Case Lawyers Bill as Much as $1,260 an Hour

Separately, the Securities and Exchange Commission filed suit to recover the $113 million. Southern District of New York Judge Miriam Goldman Cedarbaum will appoint Mark Pomerantz of Paul Weiss Rifkind Wharton & Garrison as receiver to protect Dreier’s assets.

In another civil suit filed Monday, Wachovia Bank alleged the Dreier firm had defaulted on a $9 million revolving credit note made in connection with a $14.5 million credit agreement and a term note in the amount of $5.5 million. Wachovia is asking the court to enjoin the firm or any of its current, former or departing attorneys from disposing of any collateral belonging to the bank.

The criminal complaint charges Dreier with one count each of securities and wire fraud. He faces a maximum sentence of 20 years in prison if convicted on either count. He also could be forced to pay a fine equal to twice the value of any illegal gains.

Via Law.com.

• Prosecutor: $380 Million Lost in Dreier Fraud
• Greenberg Traurig Partner Charged in $1 Million Theft
• Morning Roundup
• Marc Deier Spent Ill-Gotten Gains on Art, Cars, Houses
• Lawyer Appointed to Probe $38.5M Dreier Debt