2012-07-27 / Top Stories

Half-Mil For PHC Attorneys

By Howard Schwach

The Peninsula Hospital Center is closed and those who need emergency treatment sometimes have to be transported as far away as Nassau County.

Nearly 700 local residents lost their jobs.

A vital institution that had served Rockaway for more than 100 years is gone for good, its meds, furniture, equipment, supplies and records trucked away to other medical venues.

A sad picture indeed, perhaps except for the lawyers at Garfunkel, Wild, PC, the Great Neck law firm located a few miles from the office of Lori Lapin Jones, the attorney appointed by federal bankruptcy judge Elizabeth Stong as trustee to oversee the PHC bankruptcy and to insure that the creditors get as much of their money back as possible.

While the PHC bankruptcy was a tragedy for the community and the 700 locals who lost their livelihood, it has become a windfall for 26 staffers at the prestigious law firm.

On July 20, an application for payment was filed by Jones on behalf of Garfunkel, Wild.

That filing asks for at total of $484,076.70 as “compensation sought as actual, reasonable and necessary” for a four-month period from March 9 through June 30.

During that period, one of the firm’s many partners, Burton Weston, billed 383.10 hours at $459 an hour (minus a 10 percent discount) for work on the PHC bankruptcy, a total of $175,842.90.

Partners who worked on the case billed anywhere from $387 to $459 an hour.

Associates billed anywhere from $180 to $306 an hour. Paralegals billed anywhere from $175.50 to $220.50 an hour.

The firm claims that it expended a total of 1,231.10 hours during the time period on the case, for a blended hourly rate of approximately $394.

That comes to about 14 hours a day for the 85 day weekday working period.

According to court records, the legal services supplied to PHC and its trustee include regulatory and compliance advice, guidance with respect to the wind-down of the hospital, closure matters, medical record retention and financial arrangements.

For example, on March 8, BSW, whom we assume is Burton S. Weston, billed 8.20 hours (about $3,700) for a series of “interoffice conferences” with Jones and with others involved with the bankruptcy proceedings.

In addition, he drafted a letter and then edited it after it was typed. He then filed some affidavits.

One of his paraprofessionals, EHH, who most likely is Ellen Huggler, billed 1.60 hours the same day ($280) for printing out material, searching the schedule for list of litigants, printing out 60 days worth of orders and printing out an order appointing committee.

The total billed to PHC for that one day comes to approximately $4,000.

The court submission contains 170 pages of items just like those.

And, the cost of that law firm has yet to be added to that of Jones, who reportedly gets three percent of the money recovered for the creditors and the other firms that were hired to sell off the hospital’s assets, sell the physical property, maintain the medical records and rezone the property to allow the nursing home and hospital building to be sold separately.

The large amount of money spent on closing the hospital has angered some former staffers.

One who was reached by The Wave but asked not to be identified, sees it as a clear case of conspiracy.

“We believed all the time that the state was closing the hospital to save itself money and put that money in the hands of lawyers and healthcare owners,” the former staffer said. “Instead of giving that money to the attorneys they should give it to the people who are now out of jobs and in danger of losing their homes.”

Legal experts, however, told The Wave that the expenses are not out of line and that the bankruptcy court regularly allows expenses such as those “without blinking an eye.”

Those experts believe that Stong will approve them in a hearing early next month and that the property will be sold before the end of September.

Rumors in the community are that a local healthcare provider, who owns several nursing homes, is the inside bidder on the hospital building, but that could not be confirmed.

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