Judge blocks Brown Rudnick lawyer's 50% fee increase in PFAS bankruptcy
By Dietrich Knauth
NEW YORK, June 5 (Reuters) -A Delaware bankruptcyjudge on Wednesday rejected a Brown Rudnick attorney's request to increase his hourly fees from $1,000 to $1,500 in a PFAS bankruptcy case, saying that no client would approve such a steep fee hike in the middle of a case.
Chief U.S. Bankruptcy Judge Laurie Selber Silverstein in Wilmington saidthe firm, which represents the court-appointed creditors committee in the bankruptcy of fire-protection company Kidde-Fenwal, did not justify the sudden increase for partner Gerard Cicero in its latest fee application.
"There may be a reason, but a 50% increase of someone's rates is not something that any client I ever had would have accepted," Silverstein said at a court hearing. "If he's behind market, I don't think he gets to catch it all up at one time."
Silverstein, who before joining the bench in 2015 worked at the law firm Potter, Anderson & Corroon,allowed Cicero to be paid at his previous $1,000 per hour rate for his latest work in the case.
She pointed out that those fees will be charged to the bankrupt company, Kidde-Fenwal, as part of the court's appointment of an official committee to represent the company' creditors.
She will allow Brown Rudnick to come back later to provide more support for the higher rate, but she said she would be "skeptical" of any such request.
Cicero declined to comment. Brown Rudnick did not immediately respond to a request for comment.
Kidde-Fenwal, a subsidiary of Carrier Global Corp, filed for bankruptcy protection in June, after being named in over 4,000 lawsuits alleging that its firefighting foam products had contaminated water sources around U.S. airports and military bases with perfluoroalkyl and polyfluoroalkyl substances, known as PFAS or "forever chemicals."
Kidde-Fenwal sold the firefighting foam products from 2007 to 2013.
Cicero has billed only 22.6 hours since his rates went up in January 2024. Over seven months in 2023, he billed for 321.8 hours of work at $1,000 per hour.
Brown Rudnick's top partners on the Kidde-Fenwal case are charging $2,250 per hour.
Hourly lawyer rates reaching $2,000 were nearly unheard of just a decade ago, but bankruptcy fees have risen sharply in recent years.
Top attorneys at Kirkland & Ellis are charging $2,465 per hour on bankruptcy cases involving its clients Rite Aid, WeWork and Yellow Corp, while Sullivan & Cromwell's top lawyers are charging $2,375 an hour for their representation of bankrupt crypto exchange FTX.
The case is In re Kidde-Fenwal Inc, U.S. Bankruptcy Court for the District of Delaware, No. 23-10638.
For Kidde-Fenwal: Derek Abbott of Morris, Nichols, Arsht & Tunnell; and Justin DeCamp of Sullivan & Cromwell
For the creditors committee: David Molton, Jeffrey Jonas of Brown Rudnick.
Read more:
Kidde-Fenwal creditors sound alarm on parent companies' PFAS liability
3M's $10.3 billion PFAS settlement gets preliminary approval
Litigation over 'forever chemicals' is growing: Is your company the next defendant?
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