Law firm seeks $475k in FRM case fees

Donchess & Notinger, the Nashua law firm of Financial Resources Mortgage bankruptcy trustee Steve Notinger, is seeking more than $475,000 in interim fees and expenses for the last half year.That would bring the firm’s total payment thus far — including $308,000 held back until the case is closed — to more than $1.76 million, according to Monday’s filing in the massive bankruptcy case.Jim Donchess said that his small firm needed to get paid or it will “experience financial hardship” while it spends thousands of hours sorting out “a total mess” left behind when the Meredith firms closed their doors in November 2009 in the wake of a multimillion-dollar Ponzi scheme.The law firm said it has so far collected some $4.5 million, of which $2.3 million remains on hand. That money doesn’t include a pending settlement with Center Harbor Christian Church, run by Pastor Robert Farah, father of FRM principal Scott Farah, and the recipient of regular donations from the insolvent firm. The filing didn’t disclose the amount of that settlement.The total does include a settlement with FRM’s law firm, Gould & Burke law, or rather from its professional liability insurance policy. Gould & Burke worked out of the FRM office and handled many of the funds that were part of the Ponzi scheme.The Gould settlement was for $2 million, but only $400,000 went to the bankrupt estate. The remaining $1.6 million went through a mediation program paid out to lenders. Those settlements (from which the trustee would not collect a commission) “allowed many creditors to obtain funds quickly in an orderly fashion,” Donchess claimed.Aside from the settlement, the other major accomplishment during the period from Sept. 27, 2011, to March 19, 2012, was the court-ordered break-up of a mammoth adversary case against many of those sucked in by FRM — people who thought they were lending money via FRM for specific construction projects and did not know that their funds would be commingled with other funds.The break-up resulted in more than 150 adversary cases, some which were assigned to visiting judges from Maine, the filing said.Donchess & Notinger also worked out a number of other settlements, including a large group of loans that went through broker Jamie Tebbe.The latest filing specified $592,057 in legal fees for some 2,683 hours spent on such activities. James Donchess billed for the highest total, almost $200,000, at the rate of $315 an hour, followed by Deborah Notinger, a partner and wife to trustee Steven Notinger, at nearly $160,000, at $310 an hour.Notinger himself also seeks payment of nearly $20,000 for his legal work on behalf of himself as trustee, at the rate of $310 an hour.Victoria Louise Donchess seeks a total $58,000, for rates ranging from $250 to $275 an hour.The firm wants 80 percent of the total paid, or $473,646, with $118,441 held back, presumably paid out when most of the case is over. Add some $1479 in expenses, and the total request comes to $475,126.This is the fifth such filing by the law firm. The court previously allowed the firm to collect $984,788 in fees and $32,794 in expenses. Some $190,000 is already being held back.The court scheduled a hearing on the fee request at 10 a.m. April 9, the same time it will be considering a $11,400 request for both fees and expenses from Preti Flaherty, for its work from April 5, 2011, to Feb. 9, 2012, as special counsel to the trustee. — BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW