Attorneys want $7 million, lobbyists want $450,000 and accountants are billing at $200 an hour. Everybody wants a piece of the proposed multimillion-dollar settlement going to depositors in Utah's failed thrifts.
But thrift depositors, who lost millions of dollars in savings when the state's thrift industry collapsed in 1986, are reluctant to pay the bills as they try to come to grips with the expenses of their legal battle to get their money back.A team of four lawyers, who have represented the 15,000 thrift depositors since May 1987 in a complex class action suit against the state and thrift industry officials, have requested $7.25 million for their work in reaching a proposed $103 million out-of-court settlement with the state and other defendants.
A pair of lobbyists, David Irvine and Georgia Peterson, have submitted a bill that sources say is more than $450,000 for work on Capitol Hill, where lawmakers avoided the thrift issue for months before approving the settlement in special session.
To distribute the proposed settlement, depositors' legal counsel has selected Big Eight accounting firm Arthur Andersen & Co., whose hourly rates range from $46-$235. Court documents show the firm has so far racked up a $42,792 tab for 196 hours of work.
"It's like a bunch of vultures coming down on the prey," one depositor said, referring to the accounting fees.
Depositors' co-counsel George Haley said he and his colleagues - partner Robert Stolebarger and California litigators Malcolm Misuraca and Doug Provencher - are declining comment on reports of discontent about legal fees.
Haley said a contract was signed asking for 20-40 percent of any judgment or settlement. The $7.25 million is 25 percent of the state's $29 million contribution to the settlement.
Notwithstanding the contracts and concerns, 3rd District Judge David S. Young has the final say on how much plaintiffs' attorneys will make on the case. A Nov. 30 hearing has been scheduled on the settlement and fee issue.
It's not the first time legal fees have come up during thrift deliberations. Lawmakers found it politically unpalatable to have state money pay lawyers' salaries. They finally maneuvered around the touchy question by including language in the bill that recommends the court cap fees at $1.5 million.
Depositors, organized as a non-profit organization called Depositors of Insured Thrifts or DOIT, most likely agree that their attorneys and other professionals who have helped their cause deserve to be paid, but some members feel the requested amounts are too much for 18 months of work on a case that never went to trial.
"I feel the $1.5 million is inadequate, but the $7 million is unconscionable," said Carol Thompson, a depositor who has served on two state-appointed task forces that investigated solutions to the thrift crisis.
DOIT's steering committee has met with the attorneys and will meet with the lobbyists to discuss the costs. Some committee members, one source said, believe the thousands of volunteer hours by depositors to help in the litigation and lobbying are not being considered.
"It's true they (the attorneys) did a lot of work, but we did too," said Dolly Plumb, who is the lead plaintiff in the class action case, but not a committee member. "I guess if we hadn't done all that work the fees would be 10 times as much?"
Plumb said she has mixed emotions about protesting the requested legal fees. "We hired the attorneys in the first place. We interviewed them in my basement."
But she said she signed the contract assuming it would be a long-term legal battle that would return depositors' principal, interest and legal fees. The proposed $103 million settlement is $3 million short of covering depositors' principal. DOIT and their attorneys can still get more money by suing defendants not included in the settlement.
Depositors who have opinions about the settlement and legal fees can be heard at the Nov. 30 hearing, if the court receives notice by Monday. Meanwhile, Arthur Andersen and Grant Thornton are working out a way to share settlement distribution responsibilities.
The apparent confusion about the settlement and fees, however, isn't showing up in the ballot box. In order for the settlement to take effect, at least 90 percent of depositors must vote in favor of it. Out of 6,000 ballots collected by Arthur Andersen & Co., fewer than five depositors have declined to take part in the settlement. Depositors who don't vote will be counted as approvals.