New Century Class Action Attorneys Garner $14.4 Million in $125 Million Settlement.
U.S. District Judge Dean Pregerson of the Central District of California (Los Angeles) recently approved a $14.4 million settlement of a class action against New Century Financial Corp. (one of the subprime mortgage companies well publicized for its bankruptcy) in favor of plaintiffs’ counsel Bernstein Litowitz Berger & Grossman (lead counsel). Fees were well below the 25% settlement recovery benchmark often used in the Ninth Circuit for awards in subprime mortgage cases. Apparently, the “insurance tower” in this litigation was falling apart, which might have inspired the lower award. For more on this, see Amanda Bronstad’s November 9, 2010 post on law.com (National Law Journal).
Florida Subprime Mortgage Defendants Pay Have to Take Out Second Mortgage to Pay Their Attorney’s Fees.
In another quirk arising out of the subprime mortgage meltdown, Florida residents who get a foreclosure dismissed and homeowner debt to a bank reduced may have to take out a second mortgage in order to pay their defense lawyers. A growing movement is in the works to allow this to happen, which will allow the mortgage to be imposed for fees to the tune of 40% of the savings, minus any attorney’s fees paid by the bank or the client to the defense attorneys. Creepy, yes, even as acknowledged in the story posted by David Streitfeld on November 6, 2010 in the New York Times.
City of Concord Agrees to Pay $750,000 in Sexual Harassment Suit, $500,000 of Which Goes in Fees to Plaintiff’s Attorney.
As reported by Paul Thissen in a November 9, 2010 post, City of Concord has agreed to pay $750,000 in a sexual harassment suit brought by a former female police officer as long as plaintiff’s attorneys never file another suit against the City. (BLOG OBSERVATION–There might be some ethical constraints on this, but we leave that for others to work out.) The $750,000 settlement will be divided up such that $250,000 goes to plaintiff and $500,000 goes to plaintiff’s attorneys for their fees. City estimated that further trial expenses would have been $200,000, with it having already expended $600,000 (with the first $500,000 being borne by City due to insurance constraints). Earlier, in 1998, plaintiff’s attorney, while representing a different group of female officers, garnered a $1.25 million against City, with $690,000 going to the women and $500,000 in fees.