The Honorable Robert J. Faris
U.S. District Court for the Northern Mariana Islands
2nd Floor , Horiguchi Building, Garapan
P.O. Box 500687
Saipan, MP 96950
Dear Judge Faris,
I am writing you to express my concerns regarding the amount set aside to pay certain professionals in Case No. 12-bk-0003. I apologize for the late submission , but I only recently learned that the hearing on this matter was rescheduled to allow the Court to act on a motion to allow the NMIRF to make payments to beneficiaries and insurance companies before July 1, 2012. My concerns are limited to the amounts claimed by Jeremy Coffey and the law firm of Brown and Rudnick over $750,000.
I am a defined benefit member annuitant who has been a critic of the NMIRF’s handling of the case filed in 2009 to collect unpaid employer contributions from the CNMI government and its autonomous agencies.
From the outset , I was of the opinion that the proper court to file in was the Federal District Court not the CNMI Superior Court which had inherent problems in collecting any damages awarded against the CNMI government. However, the NMIRF , acting under the advise of counsel , chose to commence action in the CNMI Superior Court .These difficulties were stated clearly on January 25 , 2010 in Judge Alex Munson’s Order Staying Proceedings in Civil Case No. 09-0023 which had sought to have , among other things , a federal equity receiver appointed to assist the Federal District Court in the collection of damages on the $231 M judgment which had been awarded in June, 2009. The NMIRF appealed Judge Munson’s ruling and that appeal was dismissed by the U.S. Court of Appeals on October 17, 2011 following an oral argument before a three Justice Panel on October 13, 2011.
Within a short period following the dismissal of the Appeal , discussions appear to have commenced between the NMIRF and the Law Firm of Brown and Rudnick whose main offices are in Boston , Massachusetts. The only connection between the NMIRF and law firm that I am aware of is fact that Brad Huesman and Jeremy Coffey were law school classmates at South Methodist Law School , class of 2000. A spokesman for either or both the law firm and the NMIRF admitted that the NMIRF had been getting pro bono advice over a long period of time prior to the inking of the agreement formalizing the relationship. This, of course, is a marketing device used by many law firms.
What I find most disturbing is the fact that Brad Huesman , the attorney retained by the NMIRF and who had argued the unsuccessful appeal , not only introduced the NMIRF staff and members of the Board of Trustees to Coffey and the law firm of Brown and Rudnick , he may have greatly influenced the decision which was ultimately taken by the NMIRF to seek Chapter 11 Bankruptcy protection. We will never really know because the selection of an outside law firm was done without the benefit of an RFP for legal services and was conducted in total secrecy!
In my humble opinion, the decision to file in the Bankruptcy Division should have been reviewed by attorneys who had no financial interest in the outcome. Almost every opinion and comment that I have read , with the exception of a law school professor , concluded that the NMIRF was a governmental entity and did not qualify for Chapter 11 protections, Any competent , independent attorney would have reached the same decision and saved the NMIRF and its beneficiaries a very large sum of money! Were the members of the Board of Trustees every told that this costly approach had never been attempted or that the chances of success were slight. We may never know because of the cloud of secrecy which hung over the decision makers and their advisers.
It is my recollection that the fee agreement which was negotiated had a cap of $750,000 and that $250,000 was paid up front and that monthly expense in excess of the advance were limited to $125,000. If that is the case , anything amounts claimed by the Mr. Coffey and Brown and Rudnick should be denied as the Board of Trustees had lost its quorum and could not agree to any increase in fees and any delegation to the Administrator authorizing such payments was beyond the Board’s authority.
Thank you for allowing me to express my opinion. Again, my apologies for not having mailed or emailed this sooner.
Sincerely,
David L.Price
