NEW YORK, April 19 (Reuters Legal) - The trustee for
victims of Bernard Madoff's Ponzi scheme asked a federal
bankruptcy court judge on Monday to approve nearly $45 million
in fees and expenses, his first compensation request since
regulators voiced concern over his fees in March.
Irving Picard and his legal team at Baker & Hostetler LLP
filed a motion seeking roughly $44 million in fees and $1
million in expenses for work done between Oct. 1 and Jan. 31.
Picard told the U.S. Bankruptcy Court in Mahnattan that the
firm's work during the period -- which included striking a $5
billion settlement with the estate of former investor Jeffry
Picower -- justified the request.
According to the motion, Picard worked 954.8 hours during
the four-month period, at an average rate of $747.59 per hour.
Other Baker & Hostetler lawyers worked 116,398 hours at an
average rate of $370.94 per hour.
If approved, the firm's total compensation would jump to
nearly $150 million since Picard's appointment in December
2008. The high payments caught the attention of the Securities
and Exchange Commission in March, when Inspector General David
Kotz said the fees risk depleting the Securities Investor
Protection Corp's fund that is paying some of the costs of
former Madoff customers.
Those concerns have been downplayed by SIPC President
Stephen Harbeck, who said the fund will remain stable thanks to
new fees being imposed on the brokerages that pay into it. The
fund still has $1.3 billion in reserve despite costly
liquidation proceedings for Lehman Brothers Holdings Inc and
Madoff, Harbeck said.
"Any suggestion that administrative expenses paid by SIPC
could render the organization insolvent is both alarmist and
not based on actual facts," Harbeck said in a statement.
Some analysts disagree. David Paige, head of Sterling
Analytics, a legal fees consultancy, questioned whether charges
for things like online research and work done by people who are
not attorneys, including photocopying, are excessive and
possibly unethical. He also called for more transparency on how
Picard's team arrived at some of its costs.
"We really need to see the bills themselves, to have
something real to look at," Paige said.
A spokeswoman for Picard declined to comment.
SIPC has so far committed to pay nearly $800 million to
former Madoff customers, according to Picard's website for the
Madoff liquidation.
(Reporting by Nick Brown)