continued The trustees' suit charges that the money shoveled to the two law firms "was paid from funds that would otherwise have been available to investors," flaying "the lawyers' gravy train." The suit refers to a statement in one court filing that was "disingenuous and deliberately misleading" and "beyond ludicrous."
Earlier, the bankruptcy panel had used similar language, castigating Pioneer Liquidating for displaying "only a paramount sense of self-preservation and arrogance." Pioneer Liquidating "circled the wagons" and adopted a "take it or leave it" attitude toward investors. "PLC's refusal to provide a financial accounting" may be, in effect, "a concealment of assets," said the bankruptcy panel.
Pioneer Liquidating then appealed to the Ninth Circuit, which also punched Pioneer Liquidating in the nose. As Pioneer Liquidating "continued to stall," the costs "continued to mount, depleting the assets available for distribution," said the appellate court, also ruling that Pioneer Liquidating owed a fiduciary duty to investors and must provide them with information.
A final accounting on just how much these law firms raked in while allegedly helping Pioneer Liquidating breach its fiduciary duty is under seal. However, an earlier court filing showed the Barnhorst firm getting paid almost $600,000 in one 12-month period and almost $500,000 in a later 17-month period. Dorazio, who hangs his hat in Rancho Santa Fe, enjoyed a salary of $350,000 a year plus very generous fringes. A court filing shows him bringing home $1.15 million cash from July of 1996 through January 10 of 1999.
Barnhorst, Dorazio, and the Milberg firm did not respond to calls for comment.
"The whole bankruptcy system is a fraud in itself," says Stanley Kaufman, former head of the investors committee.
Whether the law is "a ass" or "a idiot," or both, it is rigged to make lawyers rich. Meyers could at least slow that gravy train.