Lawyer: guess maybe we burned that fee documentation

Sensational new disclosures in the scandal (Mar. 6, Aug. 25, etc.) over self-dealing by lawyers in divvying up the results of fen-phen litigation in Kentucky:

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. …

[Attorney Angela] 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….

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….

Chesley, who was hired by the Lexington lawyers to negotiate the settlement, said he had no reason to question why he was paid $20.5 million — $7 million more than his contract outlined — in part because he could not “believe that these good folks would have sent me more money than I was entitled to.”

In her motion to force the lawyers to give up their fees, Ford said the defendant lawyers, including Chesley, breached their duties in a “spectacular and unparalleled way” by giving only about one-third of the settlement to the clients.

“The facts of this case truly are as egregious as it gets,” she said in court papers. ..

Since the settlement, Gallion and Cunningham have both become permanent residents of Florida, a state that Ford notes allows debtors to keep their homes when they take bankruptcy.

Stanley Chesley was, and remains, one of the most famous plaintiff’s lawyers in the United States and a major powerbroker in national Democratic politics. The article also sheds further light on the close ties between now-disgraced Judge Joseph F. (“Jay”) Bamberger, who approved the Kentucky fen-phen settlement and has since resigned, and the plaintiff’s team in the litigation. (Andrew Wolfson, “Lawyer: Fen-phen notes destroyed”, Louisville Courier-Journal, Jan. 21).

More: a companion piece in the same paper profiles the Cincinnati-based Chesley (Andrew Wolfson, “A breach of duty; wealth mounts for ‘prince of torts'”, Louisville Courier-Journal, Jan. 21)(via Lattman).


  • Why not sue China? Phen-fen is derived from Ephedra sinica which has been used in Chinese medicine for thousands of years as an anti-histamine. Pseudafed is a synthetic version and has the same effect on mitral heart valves when overdosed. I personally use Ephedra sinica for hayfever as it is more effective I think than the pharmaceutical. It can also be used as a precurser from Methamphetamine prodution which is probably the real reason why it is being/been pulled from shelves in the US.

  • I personally liked Ephedra, used as direcred it worked wonders when working at higher altitudes which my job entails, but alas the Gov’t has deemed it illegal for me to consume. Is there no personal choice or responsibility for one’s actions anymore?

  • It’s odd how those who would (quite rightfully) raise a tremendous uproar if a corporation were to fraudulently underpay plaintiffs are fairly quiet when it is the lawyers who are misappropriating the money.