Heather Isringhausen Gvillo Nov. 19, 2014, 10:51am

CHARLOTTE, N.C. (Legal Newsline) – After a dispute over more than $2.5 million in fees and expenses in the Garlock Sealing Technologies bankruptcy case, Bankruptcy Judge George Hodges has granted most of the requested compensation for the Official Committee of Asbestos Personal Injury Claimants, or ACC, for its work in the access litigation.

In the Nov. 12 order, Hodges ultimately overruled the debtors’ objection after considering the arguments in a Nov. 6 hearing when he approved $2,210,358.50 in fees and $175,632.86 in expenses for the interim period stretching from March to June.

However, Hodges reserved judgment in regards to the debtors’ objection with respect to $320,000 in fees requested for the ACC’s motion to reopen the estimation proceeding record. The motion was originally filed on June 4 and was refiled on Nov. 7 after the estimation proceeding was ordered to be unsealed. Hodges expects to release an additional order on the remaining fees and expenses after a Dec. 4 hearing.

In their objection, the debtors – which include Garlock, Garrison Litigation Management Group and The Anchor Packing Company – sought to withhold roughly 40 percent of the total requested amount.

Caplin & Drysdale, counsel for the ACC, filed its Sept. 23 memorandum in support of its 12th fee application after the debtors specifically objected to the ACC's alleged work with respect to issues of public access addressing sealed materials from the estimation proceeding, among other objections.

“Yet that work was important and necessary for protecting the procedural and substantive rights of the committee’s constituency, and ultimately led to the present protocol process pursuant to which claims of public access are being evaluated,” the ACC argued.

“[T]he various positions taken by the Committee were well-grounded in law and were largely sustained by the courts. They have obviated piecemeal access requests and promoted an efficient coordinated protocol for determining which documents should or should not remain sealed, as well in placing reasonable restrictions on further transfer of Rule 2019 exhibits consistent with applicable precedents,” it added.

While the interim period did not include the time period addressing the unsealing process, the ACC still made its argument against the debtors’ objections just 12 days after abdicating any responsibility to identifying documents in the unsealing process.

The unsealing process began after a federal judge ruled Hodges was wrong to seal certain evidence submitted by Garlock that allegedly shows plaintiffs attorneys manipulated the asbestos personal injury system to maximize recovery against Garlock.

In the ACC’s Sept. 11 motion to seal, it suggested the court to consider any particular interests asserted and arguments advanced by the claimants rather than specify documents it felt should be kept confidential.

“It merits emphasis that, in contemporary life, privacy is not just a matter of maintaining the secrecy of personal matters; it also includes ensuring individuals’ control over the dissemination of sensitive information – even information that is already public to some limited extent,” the ACC claims.

The ACC, however, claimed its work in the access litigation was necessary and justified, saying the “vast bulk of the information at stake” is that of the Committee’s constituents.

“Thus, when both debtors and strangers to this bankruptcy sought to strip that information of confidentiality protection altogether, it was well within the ACC’s role to protect its constituency’s interests in confidentiality recognized in the protective orders,” the Committee argues. “It was also wholly within the ACC’s role to insist on absent claimants’ due process rights to notice and an opportunity to be heard before issue was joined on whether those prior orders should give way to public access.”

The debtors’ specific objections were as follows:

-March: Committee requested $453,779 in fees and $26,473 in expenses total. Debtors disputed $241,339 in total fees, specifically $192,648 in fees relating to access litigation;

-April: Committee requested $784,577 in fees and $29,642 in expenses total. Debtors disputed $281,427 in total fees, specifically $276,925 in fees relating to access litigation;

-May: Committee requested $658,714 in fees and $76,835 in expenses total. Debtors disputed $244,622 in total fees, specifically about $177,329 in fees relating to access litigation; and

-June: Committee requested $637,960 in fees and $42,681 in expenses. Debtors disputed $273,465 in total fees, specifically about $213,659 in fees relating to access litigation.

The debtors objected to roughly 50 percent of the amount requested in relation to the access litigation for each month, and the entire amount requested in March.

In the debtors’ objection, they claimed the requested fees regarding the Committee’s alleged work in the access litigation was outside the proper scope of the Committee’s role in these cases.

The debtors called the various filings by the ACC “nothing more than a game of keep away, attempting to prevent any court from reaching the merits of the access issues.”

However, the ACC claimed the debtors “took an expansive view of their own role in the access litigation while insisting that the Committee should stay on the sidelines.”

“Debtors’ motive to thwart the ACC’s ability to resist aggressive maneuvers in the access litigation should weigh heavily against debtors’ objections,” the Committee argues.

From Legal Newsline: Reach Heather Isringhausen Gvillo at asbestos@legalnewsline.com

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