Holocaust Victims’ Lawyer Asks for Interest on His Fee
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The New York University law professor who was awarded $3.1 million by a federal judge for his work administering a settlement between Swiss banks and Holocaust survivors is back in court, asking for $299,419 in interest to cover the two years during which his fee was delayed by objections from the survivors.
The issue had appeared resolved last month, when a federal judge in Brooklyn, Frederic Block, ordered that the professor, Burt Neuborne, be paid $3.1 million for his work on the landmark $1.25 billion settlement on behalf of Holocaust survivors. For much of the past two years, a group of survivors had objected to Mr. Neuborne receiving any financial compensation for his work. Their dissatisfaction gave birth to a docket with more than 100 court filings debating all aspects of Mr. Neuborne’s fee request. There didn’t seem much left to say.
Now, the dispute is heading back to court, after Mr. Neuborne asked for a little bit more. Last week, a lawyer for Mr. Neuborne wrote that the professor is entitled to interest for the two years that litigation stalled his fee request. “Shocking is not the word for it,” a survivor, David Mermelstein from a suburb of Miami, Fla., said. “Disgusting is not the word for it. Chutzpah is too nice a word to say about the thing. After getting $3 million, to have the guts to ask for interest?”
Another survivor, Leo Rechter of Queens, said of Mr. Neuborne: “He’s setting a precedent on greed.”
A lawyer in Miami who represents more than a dozen objectors, Samuel Dubbin, has already written to the court opposing Mr. Neuborne’s request.
Mr. Neuborne said the request for interest is “a standard thing.”
“I can’t understand them,” Mr. Neuborne said of his critics. “Does Leo Rechter not understand the concept of interest?”
“They’ve succeeded in painting me as a greedy lawyer, when, in fact, my years of service and the restraint I’ve used in billing doesn’t deserve that kind of criticism,” Professor Neuborne said. “But the response I get is that if I ask for interest, I’m poking my finger in their eye.”
The fee dispute had drawn much attention in recent years because of the nature of the case. In 1998, several Swiss banks settled for $1.25 billion with Mr. Neuborne and other lawyers who had sued the banks over allegations that the banks had profited off the deposits of customers who had been murdered by Nazis. After the settlement was reached, Mr. Neuborne played a lead role in disbursing the settlement funds among several classes of victims— including hundreds of thousands of Holocaust survivors who never had Swiss accounts.
Some American survivors have objected to how a federal judge, Edward Korman, allocated the money among different groups of survivors. At the center of the discontent is a decision to give a greater percentage to survivors in Russia and Eastern Europe than to survivors in America. Mr. Neuborne has defended the funding formulas on appeal after appeal by groups of survivors. That involved several thousand hours of legal work, including 13 appearances before the federal appeals court in Manhattan.
While Mr. Neuborne was working pro bono up to the time of the 1998 settlement, he maintains that promise did not apply to the legal work that followed. But nobody seemed to have ever told that plainly to the Holocaust survivors. So when Mr. Neuborne submitted a bill for $4.1 million in 2005 — he later raised the request to more than $6 million — some survivors said the professor was reneging on his promise of doing the work without a fee.
The survivors who have objected the most bitterly to Mr. Neuborne’s fee request are by and large the same who objected to the funding allocations.
“There is a tremendous irony here,” Mr. Neuborne said. “Most of my fee was caused by the necessity of defending against their objections. Three quarters of the fee was because these guys attacked it over and over.”
Mr. Neuborne, who received a $4.4 million fee in an earlier Holocaust lawsuit, isn’t the only plaintiff’s attorney to receive recompense for work on the Swiss banks case.
Two law firms received more than $1 million and others have received less.
The interest Mr. Neuborne is seeking was calculated at a rate of 4.72% a year, the same rate the settlement fund earned over the last two years.
Mr. Neuborne said courts in New York were authorized to pay higher interest, as much as 9%. If approved, the interest would be paid out of the settlement fund.