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Sunday, January 21, 2007

Law - The three lawyers accused of plundering Kentucky's $200 million fen-phen settlement "tore up or burned" notes

The ILB has posted many past entries on the Fen-Phen lawyers and judges scandal in Kentucky. Another incredible, and lengthy, story today in the Louisville Court Journal, by Andrew Wolfson, begins:

The three lawyers accused of plundering Kentucky's $200 million fen-phen settlement "tore up or burned" notes showing how much they paid themselves and their clients, according to one of the lawyers.

Depositions obtained by The Courier-Journal include Lexington attorney Melbourne Mills Jr.'s description of a secret meeting that he said he and lawyers William Gallion and Shirley Cunningham Jr., also of Lexington, held at Gallion's house in 2001 to divvy up an extra $10 million beyond what they'd already paid themselves from the settlement.

"Did Mr. Gallion or anyone else talk about discussing that information with anybody else?" Mills was asked by attorney Angela Ford, who now represents the three lawyers' former clients.

"We all agreed to keep it a secret," Mills said. "I think we either tore up or burned the pages it was written on."

Ford alleges that Mills' description is a "dramatic indication of a cover-up."

She has asked that those lawyers and another attorney, Stan Chesley of Cincinnati, who helped negotiate the settlement, be forced to surrender $62.6 million in funds they allegedly misappropriated -- as well as $59.5 million they paid themselves in fees.

"Given the damage that these attorneys have done to the profession, allowing them to keep any portion of their fees would be truly unconscionable," she said in a motion to be heard Feb. 12 in Boone Circuit Court.

Kentucky courts have never required a lawyer to "disgorge" or return a fee for misconduct, but courts in other states have done so, according to Ford's motion.

Posted by Marcia Oddi on January 21, 2007 01:09 PM
Posted to General Law Related