Diocese of Davenport's lawyers submit final bill

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By Ann McGlynn | Tuesday, May 13, 2008 |

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Diocese Attorney Fees

The lawyers who represented the Diocese of Davenport in its bankruptcy submitted their final bill to the court this week, bringing the total for their legal services and expenses to nearly $570,000.

The money will come from the $37 million settlement. Any work done after May 1 will be billed directly to the diocese, said Dick Davidson, the attorney who led a team from Lane & Waterman in Davenport. The legal firm representing the claimants has yet to file its final request for payment. Its first request was for $746,274.

Davidson expects the total for all legal services to be approximately $2 million to $2.5 million, an “extraordinary result” given the $37 million settlement, he said. Diocese bankruptcies in other parts of the nation have resulted in bills several times more.

Billing statements attached to the request for payment detailed the hours each attorney worked between September and May 1. Davidson, for example, billed for 719 hours. Rand Wanio, who also has worked extensively on the bankruptcy, worked the next highest number of hours at 278. Judy Herrmann put in 214 hours.

The statements show how much time officials devoted to researching insurance coverage, negotiating the final settlement, talking with diocesan leadership and crafting court filings. Senior partners in the firm bill at $230 an hour.

Expenses included:

- The firm spent approximately $12,000 to send out 162 ballots to claimants. The ballots allowed them the opportunity to cast their vote in support of or denial of the plan, as well as to choose how they wished to be treated for payment from the settlement.

- An investigator hired to examine claims, James Sweeney, charged $12,000 between September and May.

- For two days-long settlement negotiations in Chicago, the firm made accommodations at the Union League Club and Wyndham Drake Hotel. Lawyers ate at such places as the Greek Island Restaurant, Shaw’s Crab House, Coco Pazzo Café, Keefers Restaurant, Gaylord India Restaurant, Maggiano’s and Wildfire. Hotel and food expenses totaled $4,200.

Separately, a request for payment from Alix Partners, the financial adviser to the representative for people who file claims up to 10 years from now, totals approximately $180,000.

The diocese filed for bankruptcy in October 2006 after it lost its first civil sex abuse trial. The lawsuit was brought by Michl Uhde, who was awarded $1.5 million by a Scott County jury, double what he requested, for abuse he suffered as a child by the late Monsignor Thomas Feeney. A second lawsuit by Florida resident Michael Gould was set to go to trial when the diocese filed for bankruptcy.

The diocese, Travelers insurance company and the creditors committee agreed to a $37 million settlement, with the stipulation that all Catholic entities in the diocese were to be released from liability just as the diocese will be released once the bankruptcy process is completed. The entities will relinquish their Travelers insurance policies, all dating from before 1996.

There is the possibility for continued litigation, however, as the diocese and the claimants can sue insurance companies that did not participate in the settlement.

Travelers is to pay $19.5 million, the deed to the diocese-owned St. Vincent Center valued at $3.9 million is to be turned over to the bankruptcy trustee and the diocese is to pay $13.5 million.

Davidson expects the payment to be made within the next several weeks to the bankruptcy trustee and for the case to be closed out at the end of the month. Payments are expected to be made to claimants beginning this summer.

Ann McGlynn can be contacted at (563) 383-2336 or amcglynn@qctimes.com.