Bankrupt Central Falls pays more than $1 million in legal fees since declaring insolvency
Rhode Island: Central Falls Rhode Island has paid more than $1 million dollars in legal fees to local attorneys since declaring insolvency back in May of 2010. The city had to declare bankruptcy last week as part of an effort to repay their creditors. The largest fees have gone to Orson and Brusin who have been paid $365,951 to date, Edwards Angell Palmer & Dodge who have received $350,060 and the three receivers the city has employed since 2010. The first receiver was Jonathan Savage of Schechtman, Halperin, and Savage who was paid $150,000 for two months of work. The next receiver was Mark A. Pfeiffer who was paid $197,289 for seven months of work. Current receiver, retired Rhode Island Supreme Court Judge Robert Flanders, has been paid $150,207 for his work since February. To put this all into perspective legal fees usually run between $600 and $700 an hour, where these three judges has worked for around $200 an hour during their tenures with the city. Central falls has an annual budget of $17 million and yet has annually faced deficits over $5 million dollars.
Central Falls, RI declared Chapter 11 Bankruptcy, under Chapter 11 of Title 11 of the United States code. Under Chapter 11 Bankruptcy, the company (or in this case city) is reorganized under authority of the United States Government, according to laws within local and state jurisdictions. In order to see the actual text of Chapter 11, go to BankruptcyLawReview.com