Change the Name, the Game Remains the Same

By July 15, 2008Briefly Legal

Even after convictions of top partners left it a rump  Milberg LLP, the law firm formerly known as Milberg, Weiss, Bershad & Schulman, L.L.P, continues to astonish in its arrogance.  The Wall Street Journal revealed the latest in an editorial Monday, “The Milberg Double Cross.” Despite being convicted of paying kickbacks to gin up class-action plaintiffs — part of a three-decade conspiracy — former partner Mel Weiss is still being rewarded by the firm.

The news came out in paper filed in New York State Court:

According to that filing, on October 1, 2007 — meaning after Weiss had been added to the indictment — Milberg signed a deal agreeing to pay him lucrative fees for settlements in some of its most high-profile cases, including those against Tyco, Xerox, Exxon, Enron, and dozens more. The formula is complex, but in many cases Weiss will receive roughly 15% of the firm’s fee award multiplied by the firm’s profit margin for the year of the settlement. The precise payout is uncertain but could well add up to tens of millions of dollars. That would more than make up for the $9.75 million in forfeitures that Weiss agreed to pay as part of his felony plea deal.

The firm also agreed to pay Melvyn Weiss’s legal fees and expenses stemming from his indictment (including travel, room and board) — even if he pleaded guilty. Two days after Weiss pleaded guilty, on March 17, 2008, Milberg amended the agreement, so he would continue to get his share of the settlement loot even if he resigned from the firm.

The Examiner comments editorially today:

When corporations such as Enron get involved in fraud, Congress rushes headlong into hearings. But a whole series of trial lawyer criminality, spanning Milberg, Dickie Scruggs and a host of others, has yet to inspire the congressional leadership to utter a peep of protest, much less convene the investigation that so clearly is called for by the facts.

Yet, when corporations are sued, their stocks lose value. Shareholders and pensioners suffer. And, as one example of terrible results, scores of good companies have closed their doors as a result of what later proved to be fraudulent claims of asbestosis — costing thousands of innocent workers their jobs. A Democratic Congress that does not lift a finger to rein in such abuses is complicit in the economic hardship that results.

 

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