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Bankruptcy Trustee Settles With Former

Rothstein Firm Lawyers Over Future Fees
Julie Kay

04-19-2010
The trustee in the bankruptcy case of Ponzi operator Scott Rothstein's defunct law firm has settled disputes with
seven attorneys over future legal fees from cases they handled while employed at Rothstein Rosenfeldt Adler.

In motions filed late Thursday, trustee Herbert Stettin seeks approval of settlement agreements with Russell Adler
and six attorneys who banded together when they left RRA: Gary Farmer, Steven Jaffe, Matthew Weissing, Brad
Edwards, Mark Fistos and Seth Lehrman.

The agreements submitted to U.S. Bankruptcy Judge Raymond Ray for approval provide for the trustee to get a
percentage of recoveries on unresolved cases the former RRA attorneys are handling for clients in the door before
Rothstein's $1.2 billion fraud collapsed last Nov. 1.

No dollar amounts are listed, but Farmer said the total uncollected fees could exceed $10 million. That would include
several class action cases and qui tam actions his new firm is working on, including cases against NationsRent, a
home health care agency and Palm Beach millionaire Jeffrey Epstein, who has been sued for allegedly abusing
teenage girls.

In Adler's case, the trustee's percentage will be 15 percent or 20 percent. The lower percentage covers cases where
suits had not been filed. The others' percentages range from 5 percent to 25 percent.

The settlement applies only to contingency fees, which could be why former equity partner Stuart Rosenfeldt, who
billed hourly as a labor lawyer, wasn't included.

Client names and legal issues were blacked out in attachments filed in court records.

Farmer said his firm agreed to the settlement because the trustee placed liens on its RRA cases, and fighting them in
court could tie up attorney fees for more than a year with appeals. The settlement ends three months of negotiations
on the issue.

"It was a business decision at the end of the analysis," he said. "The trustee's attorneys get paid hourly. We eat
what we kill. Waiting a year and a half is not good for your business model. . . . We hope this puts us one step
closer to fully and completely putting Scott Rothstein out of our minds forever."

Scott Underwood, a Fort Lauderdale attorney representing Adler, said, "We are pleased to be able to work out these
issues with the trustee."

The settlement motions filed by Berger Singerman, one of Stettin's law firms, said: "The expense, inconvenience and
delay that would be caused by litigating the estate's entitlement to legal fees and costs and expenses regarding the
relevant cases would not be in the best interest of the estate."

The proposed settlement would not affect an adversary case the trustee is pursuing against Adler to recover about
$1 million in allegedly ill-gotten gains, including a $500,000 Manhattan apartment. Adler is fighting that action.

Stettin has no similar case against Farmer and the other lawyers, who now practice together at the Fort Lauderdale
law firm Farmer Jaffe Weissing Edwards Fistos and Lehrman.

RRA dissolved last November following disclosures that Rothstein was being investigated for running a Ponzi scheme
based on phony settlement financing out of the Fort Lauderdale law office. So far, only Rothstein has been criminally
charged in the matter, but federal prosecutors said the investigation is continuing.

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