Union rips Detroit bankruptcy judge over legal fees
Detroit — A Detroit firefighters’ union criticized U.S. Bankruptcy Judge Steven Rhodes on Tuesday for an “offensive and unfair” ruling preventing creditors from challenging fees charged by the city’s bankruptcy lawyers.
The city’s law firm, Jones Day, is plundering Detroit by charging high fees that have totaled more than $25 million, said Jeff Pegg, president of the Detroit Fire Fighters Association.
In a bold move, Pegg accused Rhodes of having an agenda while overseeing the biggest municipal bankruptcy in U.S. history.
“Judge Rhodes has an agenda. It’s to drive the bankruptcy to conclusion — a conclusion that he wants,” Pegg said in a statement Tuesday. “A conclusion uncluttered by genuine inquiries into the high fees that have the unmistakable whiff of plunder.”
Rhodes will announce Friday whether he will approve Detroit’s plan to shed $7 billion in debt.
Last week, Rhodes barred creditors from filing any documents relating to the reasonableness of fees charged by Jones Day “until the further order of the Court.”
“In short, this order is offensive and unfair,” Pegg wrote.
City spokesman Bill Nowling defended the judge.
“Judge Rhodes, at every single stage of this trial, has bent over backwards to make sure every objection is given its due consideration,” Nowling wrote in an email. “To suggest otherwise ignores the established court record in this case. To do so in the manner done today by the Detroit Fire Fighters Association, with the level of personal animus and vitriol evidenced by the public comments of its elected leadership, besmirches Judge Rhodes' good name and respect due a federal judge and the court of the land.”
Rhodes has appointed a fee watchdog to review billings submitted by Jones Day and several other professionals working on the city’s bankruptcy case.
“But this is small comfort,” Pegg said. “When is the last time this examiner disqualified or rejected Jones Day’s fees?”
Through March, the firms have charged Detroit almost $68 million.
“The DFFA would like to do more to examine and object, where appropriate, to Jones Day’s staggering fees,” Pegg said. “But we can’t. Judge Rhodes forbids it.”