By Joseph Ax
NEW YORK, Feb 8 (Reuters) - U.S. Coal Corporation must pay
Pryor Cashman nearly $2.5 million in legal fees, a New York
state judge has ruled, rejecting claims of overbilling and
conflicts of interest from the mining company.
Acting Supreme Court Justice Melvin Schweitzer granted Pryor
Cashman's motion for fees stemming from work the firm performed
from 2006 to 2011 for the coal company as it sought to acquire
other companies and considered a public offering.
Pryor Cashman sued U.S Coal Corporation in 2011, after it
said it had given U.S. Coal numerous chances to pay the balance
of millions of dollars in legal fees it had billed, and moved
for summary judgment last June.
Lawyers for U.S. Coal did not immediately respond to
requests for comment on Friday.
In a cross-motion for summary judgment, U.S. Coal claimed
that the firm had overbilled the company. It also alleged that
the firm failed to disclose several potential conflicts of
interest, including that its lead lawyer on the case, Eric
Hellige, held both shares and notes issued by the company.
Since Pryor Cashman was advising U.S. Coal on transactions
that affected shareholders and creditors, the company claimed,
the firm should have told it about Hellige's financial holdings
and was therefore not entitled to collect legal fees.
Schweitzer rejected those arguments, noting that U.S. Coal
never contested the invoices and in fact paid some of them
"The record ... establishes that U.S. Coal did not make a
timely objection to the invoices, which is critical to the
validity of the claim," he wrote.
Schweitzer also dismissed the conflict of interest argument,
saying that U.S. Coal had not shown that it was damaged in any
way by the potential conflicts.
The firm argued in court papers that Hellige owned stock and
notes as any other individual investor and that "simply owning
stock does not give rise to a conflict of interest."
Gideon Cashman, the firm's chairman, said in an interview
that the alleged conflicts caused no harm to U.S. Coal.
"Their reciprocal motion for summary judgment was denied
completely," he said. "We're quite pleased with the result."
The case is Pryor Cashman v. U.S. Coal Corporation, New York
State Supreme Court, New York County, No. 651908/2011.
For Pryor Cashman: Gideon Cashman, Eric Fishman and Ross
Bagley of Pryor Cashman.
For U.S. Coal: Christopher Mason and Melisa Gerecci of Nixon
Follow us on Twitter @ReutersLegal | Like us on Facebook