Incredible that someone who pocketed roughly 80 million dollars cannot even pay his legal bills. Now whose's smarter a man or a woman. Be honest! :)
theglobeandmail.com
LITIGATION
Bre-X lawyer on a quest for fees
RICHARD BLACKWELL
Former Bre-X Minerals Ltd. chief geologist John Felderhof, who stands accused of illegally selling company shares valued at $84-million in 1996, has not been paying his legal bills. In a court document, his Toronto lawyer, Joe Groia, said none of his invoices have been paid since last December, leaving him out of pocket by $740,000 (U.S.) as of May. The tally has since risen.
This week, Mr. Groia is presenting final arguments on behalf of the geologist at his insider trading trial in the Ontario Superior Court.
Mr. Groia decided to take that case to completion despite the financial vacuum. The problem, Mr. Groia says in an affidavit filed in conjunction with a separate legal case, is that under a complex arrangement, Mr. Felderhof's legal expenses must be paid out of a Cayman Islands bank account.
Mr. Felderhof's ex-wife Ingrid is the only one permitted to authorize withdrawals.
But Ms. Felderhof, who has been divorced from Mr. Felderhof since 2001, has refused to authorize any payments to Mr. Groia's law firm since last December, the affidavit states.
The document quotes Ms. Felderhof as saying in a letter to Mr. Groia: "I am not responsible for [Mr. Felderhof's] liabilities, or debts." She claims all the assets in the account are hers, the documents say.
Mr. Felderhof apparently now resides in Indonesia, while his ex-wife lives in the Cayman Islands.
Mr. Felderhof can't pay any of the outstanding legal fees, or any future fees, without access to the money held in the bank account his ex-wife controls, Mr. Groia explains in the affidavit.
Mr. Groia filed the document in May as part of an application asking that he be released as Mr. Felderhof's lawyer in an outstanding class-action lawsuit against the geologist. The class action is in limbo, but Mr. Groia wanted to get off the hook in case it becomes active again some time in the future.
Still, Mr. Groia and his colleagues at Groia & Co., a firm he set up in 2000, have continued to represent Mr. Felderhof at the insider trading trial that is now wrapping up.
"Notwithstanding that we are not being paid for our services we consider ourselves duty bound to complete the OSC case through to the end of trial, " Mr. Groia said in the affidavit.
The Ontario Securities Commission has accused Mr. Felderhof of issuing misleading press releases and making illegal trades in Bre-X stock with insider knowledge.
Bre-X collapsed in 1997, wiping out more than $5-billion in shareholder value, after tests found that there was no gold at its Busang mine site in Indonesia.
Mr. Felderhof's trial, in front of Mr. Justice Peter Hryn, began almost six years ago. It was delayed for many months while the OSC tried to get Judge Hryn removed from the case, accusing him of being biased against the securities commission. It is expected to end next week, although a decision from Judge Hryn is likely months away.
In an interview at a break in his closing arguments yesterday, Mr. Groia said he stayed on in the OSC case partly because the rules of professional conduct say a lawyer can't quit if it would cause undue hardship to his client. With the trial so close to its completion, it would have been difficult to justify leaving, he said.
In addition, "this case has become such an important part of my professional life that I am determined to see it through to its conclusion, at whatever cost," he said.
Mr. Groia, a former head of enforcement at the OSC, has gained a reputation for defending high-profile corporate clients. He has worked for former Bay Street star broker Mark Valentine, financial consultant Brian Costello, and Cinar Corp. founders Micheline Charest and Ronald Weinberg.
Despite his willingness to complete the Felderhof trial, "I'm not looking for a bunch of clients who are going to ask me to work for free," he said.
Mr. Groia charges about $550 (Canadian) an hour for his services. One of his company's invoices to Mr. Felderhof, which covered two months of work from mid-November 2005 to mid-January 2006, was for $350,890.92 (U.S.).
Mr. Groia said he still communicates with Mr. Felderhof on a regular basis, to consult about the OSC case.
But his last communication with Ms. Felderhof was when he told her in June that the court had allowed him to quit as the lawyer on the class-action case.
Mr. Groia would not reveal how much more he is now owed by Mr. Felderhof beyond the $740,000 tally in May, but he said there have been no changes in the payment roadblock since his document was filed in the spring.
Ms. Felderhof's lawyer in the Cayman Islands could not be reached for comment yesterday. |
