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Wednesday, July 16, 2008

Milberg Firm Defends Deal With Weiss

Milberg Firm Defends Pay Deal With Weiss
The New York Law Journal by Anthony Lin- July 16, 2008

Securities class action law firm Milberg yesterday defended at a court hearing a pay deal with co-founder Melvyn I. Weiss, who was sentenced last month to 30 months in prison for orchestrating a scheme to pay kickbacks to individual plaintiffs in shareholder suits. The October 2007 agreement to pay Mr. Weiss 15 percent of fees on matters being handled by the firm was sharply criticized in a Wall Street Journal editorial Monday as a sweetheart deal that would pay the convicted felon far more than the roughly $10 million he disgorged or was fined. But following a brief hearing on the agreement yesterday, Milberg partner Matthew Gluck took issue with the editorial, saying the deal had proceeded with the government's full knowledge and contained no litigation release that might forestall a potential effort by Milberg to collect from Mr. Weiss some of the $75 million the firm itself agreed to pay last month in exchange for dropping criminal charges against it. The deal was struck shortly after Mr. Weiss was indicted last fall and marked his stepping down as managing partner of the firm. As an active senior partner, Mr. Weiss would likely have received closer to 25 percent of fees, said Mr. Gluck. Represented by Leslie D. Corwin of Greenberg Traurig, Mr. Weiss had moved for approval of the agreement before Manhattan Supreme Court Justice Herman Cahn (See Profile), who oversaw yesterday's hearing. Though Mr. Weiss' application was unopposed, the judge reserved ruling, saying he wanted an explanation about a letter he received from Brooklyn lawyer Theodore A. Bechtold concerning the matter. Mr. Bechtold maintains a Web site in which he rails against those he regards as "racketeer lawyers," including but not limited to Mr. Weiss and other former Milberg partners. A lawyer for Steven G. Schulman, another convicted former partner, was also present in the courtroom yesterday, suggesting similar agreements were struck with the other figures in the kickback case. Along with Mr. Weiss and Mr. Schulman, federal prosecutors in Los Angeles also extracted guilty pleas from former name partners William S. Lerach and David J. Bershad. The last major figure in the case, Paul T. Selzer, a lawyer who helped facilitate the kickback payments, pleaded guilty Monday. - Anthony Lin


Anonymous said...

More people should have gone to jail in this case.

Anonymous said...

Mel is a SOB! The first posting is partially right, not only should more people have gone to jail, but a whole lot more money should have been turned over. Mel and his buds bought their way out of this one. How much money was spread around on this one?

Anonymous said...

what do you expect them to do? Of course they are going to defend what they did. Shame on them!

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