Soltani challenges USA Springs bankruptcy lawyer's bid to quit

After seeking postponement of Friday's auction of the controversial USA Springs bottling business until September, the firm's bankruptcy attorney asked to withdraw from the case because of what he called "irreconcilable differences" with his client — a move that would leave legal representation of USA Springs in the sole hands of attorney Tony Soltani.

But Soltani – a municipal attorney and state representative from Epsom who had been hired to conserve USA Springs ' permits during the bankruptcy process — says that he's not qualified to be the lead bankruptcy attorney and that the attempt to withdraw by Alan Braunstein is a "lame disguise" to try to "bail out" against their client's interest.

According to Soltani, the real differences include:

• Braunstein's firm was reluctant to delay the sale of the company and cast a wider "international" net to keep it as a going concern that would provide better value for the customers. Instead m his firm was "more interested in liquidation, getting their fees." (The firm did file the motion to delay the sale.)

• Braunstein's firm didn't pay attention to "red flags" on a prospective loan deal that was supposed to have bailed out the company, but instead resulted in the company's principal losing $1.2 million.

• USA Springs President Francesco Rotondo wanted Braunstein to run everything by Soltani in order to keep the permits intact, and Braunstein "took offense to that"

Braunstein did not respond by NHBR deadline, and Rotondo declined comment on the matter.

A hearing on Braunstein's request been scheduled for August 7.

The last-minute cancellation of the auction, and the ensuing lawyer showdown is the latest chapter in the decade-old USA Springs saga.

The company has been a magnet for controversy ever since it applied for a permit to withdraw 300,000 gallons of water a day from the land it acquired on the Barrington-Nottingham border. Several neighborhood groups formed in opposition to the project arguing that the aquifer could not handle such a withdrawal, and the proposal even became an issue gubernatorial campaigns.

Some 11 parties initially responded to the bankruptcy auction and were granted full access to USA Springs "virtual data" room, according to Braunstein's July 11 filing seeking cancellation of the July 20 auction. That's because at least three parties said they needed more information or additional time to submit a bid, according to Braunstein's filing.

Bankruptcy Judge J. Michael Deasy granted Braunstein's motion the next day, rescheduling the deadline to Sept. 14 and the auction to Sept. 28.Braunstein made the offer to withdraw as attorney the same day as the order. While not detailing the differences that are "incapable of resolution" he did say that Rotondo "expressed his lack of confidence in the Firm on numerous occasions and has accused the firm of acting not in the best interests of the Debtor's Estate."

There was also the matter of money. Braunstein said his Boston firm was owed $1.9 million, and so far has received $28,000Furthermore, USA Springs wasn't even directly talking to Braunstein's firm, but instead communicated "solely" through Soltani. USA Springs first sought to retain Soltani as co-counsel "without the prior consultation" of Braunstein, and later as special counsel, so "Debtor will not be left without counsel in the proceedings," Braunstein explained in his motion.

Braunstein's withdrawal motion was followed by a similar motion by Bruce Hayward, the local bankruptcy counsel, who said he was "unwilling to offer to expand the scope" of his firm's engagement. Hayward also raised the matter of payment, saying that his firm was owed $215,000 in fees and expenses and so far it had received about $20,000.Soltani, however, told NHBR that state and federal law prevents attorneys from withdrawing at such a crucial moment without qualified counsel, "and I'm not qualified to be a lead counsel in a complicated bankruptcy case, by any means."The larger issue is whether to try to keep the project alive.

"The land is worth much less than a viable going concern with a permit to withdraw 300,000 gallons of water," he said. Soltani said that he would have hired an expert to assure prospective buyers that the permits were in order. Opponents of the plant contend that many of those permits have expired.

Soltani, who represented USA Springs in the permitting process said he has put his "blood, sweat and tears" into the case. "I'm not doing this for the money, but to be surrounded with something good that a lawyer can do once in a lifetime."