UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA LOS ANGELES DIVISION. Chapter 11

Transcription

1 PETER J. GURFEIN (SBN ) AKIN GUMP STRAUSS HAUER & FELD LLP Century Park East, Suite 00 Los Angeles, California 00 pgurfein@akingump.com Telephone:..00 Facsimile:..01 Attorneys for CONQUEST MEDIA GROUP, LLC UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA LOS ANGELES DIVISION In Re: DEATH ROW RECORDS, INC., Debtor. LA-:0-bk--VZ Chapter NOTICE OF MOTION AND MOTION OF AKIN GUMP STRAUSS HAUER & FELD LLP TO WITHDRAW AS COUNSEL FOR CONQUEST MEDIA GROUP, LLC [DECLARATION OF PETER J. GURFEIN FILED CONCURRENTLY] DATE: September, 0 TIME: :00 a.m. CTRM: E. Temple Street Los Angeles, CA 00 v

2 PLEASE TAKE NOTICE that Akin Gump Strauss Hauer & Feld LLP ( Akin Gump ), counsel for Conquest Media, LLC ( Conquest Media ) in the above-captioned chapter case, hereby moves (the Motion ) the Court for an order granting Akin Gump s request to withdraw as counsel to Conquest Media. This motion is made pursuant to Rule 1-1 of the Local Bankruptcy Rules of the United States Bankruptcy Court for the Central District of California (hereinafter, the Local Bankruptcy Rules ) and Rule -00 of the California Rules of Professional Conduct. PLEASE TAKE FURTHER NOTICE that, pursuant to Local Bankruptcy Rule ( LBR ) 1-1(c)(1), notice of this Motion is being given by first class United States mail to the Debtor, the Trustee, counsel to the Trustee, the Office of the United States Trustee for the Central District of California, parties in interest that have requested special notice pursuant to Bankruptcy Rule 0, and parties named and appearing in the above-captioned bankruptcy case. PLEASE TAKE FURTHER NOTICE that, pursuant to LBR 0-1(f), opposition to the Motion, if any, must be filed with the Court and served upon the undersigned counsel not later than days before the date set for the hearing. Pursuant to LBR 0-1(h), failure to respond to the Motion in a timely fashion may be deemed by the Court to constitute consent to the relief sought in the Motion. Dated: August, 0 AKIN GUMP STRAUSS HAUER & FELD LLP By /s/ Peter J. Gurfein Peter J. Gurfein v 1

3 TO THE HONORABLE VINCENT P. ZURZOLO, UNITED STATES BANKRUPTCY COURT JUDGE, AND ALL INTERESTED PARTIES: Akin Gump Strauss Hauer & Feld LLP ( Akin Gump or Counsel ) hereby submits this motion (the Motion ) seeking an order approving the withdrawal of Akin Gump as counsel of record for Conquest Media Group, LLC ( Conquest Media or Client ). I. INTRODUCTION By this motion, Akin Gump seeks to withdraw as counsel of record for Conquest Media. To date, as a result of Akin Gump s representation of Conquest Media in the enforcement of Conquest Media s claims in the Death Row Records and Marion Knight bankruptcy proceedings, along with certain related proceedings, Conquest Media has incurred in excess of $1. million in unpaid attorneys fees and $,000 in unpaid expenses. Because of Conquest Media s failure to meet its financial obligations to Akin Gump and the likelihood that the ongoing bankruptcy and related proceedings will continue to drag on, Akin Gump has no choice but to withdraw as counsel to Conquest Media. Conquest Media has been informed of the withdrawal and is currently seeking new counsel. II. JURISDICTION AND VENUE This court has jurisdiction over this Motion pursuant to U.S.C. and. Venue is proper pursuant to U.S.C. 0. The statutory predicates for the relief sought herein are Rule 1-1 of the Local Bankruptcy Rules of the United States Bankruptcy Court for the Central District of California (hereinafter, the Local Bankruptcy Rules ) and Rule -00(C) of the California Rules of Professional Conduct (hereinafter, the Rules of Conduct ). III. STATEMENT OF FACTS A. Retention of Akin Gump to Prosecute Conquest Media s Claims to Death Row Assets Akin Gump was retained by Conquest Media on or about January, 0, to represent Conquest Media in connection with certain matters in (i) the case entitled In re Death Row Records, Inc., Case No. 0--VZ (the Death Row Case ) and (ii) the case entitled In re Marion Knight, Jr., Case No. 0--VZ (the Knight Case, collectively, with the Death Row Case, the DRR Cases ). v

4 Conquest Media purchased significant claims in each of the Death Row Case and the Knight Case, valued in the aggregate at approximately $ million (the Claims ), from Lydia Harris and Michael Harris on or about March, 0 pursuant to certain Assignment and Assumption Agreements (each, an Assignment Agreement ). Conquest Media organized an investment group to bid to purchase the assets of the Death Row and Knight estates. At the time of acquisition of the Claims, Conquest Media contemplated possibly credit bidding the Claims in its bid for the Death Row and Knight assets. Akin Gump represented Conquest Media in these matters. (Declaration of Peter J. Gurfein dated August, 0 ( Gurfein Decl. ),.) Conquest Media had purchased significant claims in each of the Death Row Case and the Knight Case, valued in the aggregate at approximately $ million (the Claims ), from Lydia Harris and Michael Harris on or about March, 0 pursuant to an Assignment and Assumption Agreement (the Assignment Agreement ). The purchase of the Claims made Conquest Media the largest single creditor in the DRR Cases. During the course of the DRR Cases there was significant litigation regarding the validity of the Claims and the ownership of the interests in the Claims, which litigation ultimately brought to light that Lydia Harris had filed a chapter bankruptcy in (case no. --GM) (the Harris Bankruptcy ). That Chapter case had been dismissed without entry of a discharge. The discovery of the Harris Bankruptcy ultimately led to the reopening of that Chapter case so that the chapter trustee, Helen Frazer (the Trustee ), among other things, could determine what, if any, interest asserted by Lydia Harris in the Claims belonged to the Lydia Harris Chapter estate. On or about August, 0, the Trustee filed the instant adversary proceeding (the Frazer Adversary Proceeding ) in the Harris Bankruptcy. The Frazier Adversary Proceeding was filed in large measure to resolve conflicting claims to interests in the Claims among Lydia Harris, Michael Harris, Lydia Harris s chapter trustee, Wasserman, Comden & Casselman LLP (the Wasserman Firm ) 1, and Conquest Media. [Docket # 1.] Conquest Media answered the adversary proceeding on 1 The Wasserman Firm had represented Lydia Harris in the proceedings that resulted in the judgment that provided the foundation for the Claims. As compensation, the Wasserman Firm purportedly was given an interest in the Claims and, as a result of their interest therein, the Wasserman Firm was included as part of the mediation. v

5 October, 0. [Docket #.] B. Work Performed for Conquest Media By Akin Gump and Conquest Media s Failure to Pay Fees Over the course of the DRR Cases and the Frazer Adversary Proceeding, Akin Gump performed substantial work during his representation of Conquest Media. This work included the following: DRR cases; Cases; (1) Assisting in the acquisition and prosecution of Conquest s claims in the DRR Cases; () Defending Conquest s interests in related adversary proceedings in connection with the () Conducting written discovery and multiple depositions in connection with the DRR () Participating in several mediation sessions in connection with the DRR Cases; () Researching and briefing multiple, complex legal issues in connection with the DRR cases, including the enforceability of the Claims in the DRR Cases; and () Filing and answer on behalf of Conquest Media in the Frazer Adversary Proceeding; () Participating in a mediation session in an attempt to resolve all claims among all parties in the Harris Adversary Proceeding. (Gurfein Decl.,.) This work spanned a period of more than two and a half years. (Id.) During that time, Conquest Media incurred legal fees in the total amount of $1,,. for work performed by Akin Gump in the DRR Cases and the Frazer Adversary Proceeding. (Gurfein Decl., and Exh. A.) Akin Gump invoiced Conquest Media on a monthly basis, and Conquest Media did not at any time contest these bills. (Gurfein Decl., at and Exh. A.) Conquest Media, to date, has paid a total of $,.1. (Gurfein Decl., and Exh. A at.) Thus, Conquest Media currently owes Akin Gump $1,0,., consisting of $1,,. in attorneys fees and,. in expenses. (Gurfein Decl., and Exh. A at.) Akin Gump last received any payment from Conquest Media on August, 0, in the amount of $1, (Gurfein Decl., and Exh. A at 1.) It has therefore been almost two years since Akin Gump received v

6 any payment for the substantial legal work it performed on Conquest Media s behalf. C. The Parties Unsuccessful Efforts to Settle the Frazer Adversary Proceeding In an attempt to resolve all the issues related to the ownership of the Claims, Lydia Harris, Michael Harris, Conquest Media, the Trustee, the three party s respective counsel, and the Wasserman Firm, participated in a full day mediation on May, 0 (the Mediation ). At Mediation, an agreement was reached amongst all the parties, including Conquest, respecting the respective rights of the parties in and to the Claims. The agreement was conditioned by Lydia Harris upon her settlement with her former counsel, Sharon Z. Weiss, who had withdrawn from representation of Ms. Harris and at the time of the Mediation had a claim for significant outstanding legal fees arising from that representation. The parties agreed to a deadline of May, 0, by which date Lydia Harris and Ms. Weiss were to have resolved their dispute, or else Lydia Harris would not agree to the settlement reached at the Mediation, and the parties would move forward in the Frazer Adversary Proceeding. (Gurfein Decl.,.) On May, 0, Lydia Harris sought an extension of the deadline to June, 0, to which all the parties to the Mediation consented. (Gurfein Decl., and Exhs. B-C.) Thereafter, on June, 0, Lydia Harris sought an additional extension to June, 0, to which all parties to the Mediation consented. (Gurfein Decl., at and Exhs. D-E.) Finally, on July, 0, Patrick K. McClellan, counsel for the Trustee, sent an to the parties to the Mediation indicating that Lydia Harris s attempts at settlement with Ms. Weiss had been unsuccessful and that the litigation was moving forward. (Gurfein Decl., at and Exh. F.) D. Akin Gump Informs Conquest Media of Its Intent to Withdraw from Representation In light of the over $1 million in legal bills owing and unpaid to Akin Gump, and the fact that no resolution of Frazer Adversary Proceeding or the parties respective purported rights to the Claims was imminent, Akin Gump determined that it could no longer represent Conquest Media. (Gurfein Decl.,.) On July, 0, Peter J. Gurfein, a partner at Akin Gump, spoke with Alvin Brown, Conquest Media s chairman, and informed him of Akin Gump s intent to withdraw from representation of Conquest Media in all litigation regarding Conquest Media s rights to the Claims, including the v

7 DRR Cases and the Frazer Adversary Proceeding. (Gurfein Decl.,.) Mr. Brown subsequently stated to Mr. Gurfein that Conquest Media was currently seeking new counsel and would inform Akin Gump when it had done so. (Gurfein Decl.,.) IV. DISCUSSION The rules governing the relationship between attorney and client require that the attorney use his best efforts to represent the client s interests. Those same rules provide that an attorney may appropriately withdraw as counsel when a client fails to satisfy its obligations to compensate the attorney for work performed. Such is the circumstance in this case. A. Withdrawal is Appropriate Under the Circumstances Pursuant to LBR 1-1(a)(1), [a]n attorney who has appeared on behalf of an entity in any matter concerning the administration of the case, in one or more proceedings, or both, may not withdraw as counsel except by leave of court Such leave may be granted by the bankruptcy court, so long as withdrawal is consistent with the California Rules of Professional Conduct. Value Property Trust v. Zim Co. (In re Mortgage Realty Trust), B.R. 0, (Bankr. C.D. Cal. ) (stating that the applicable professional conduct standards for attorneys practicing in the Bankruptcy Court for the Central District of California are provided by the rules of professional conduct promulgated by the California state bar). Withdrawal as counsel of record is permitted pursuant to the California Rules of Professional Conduct if the client breaches its obligations to pay his counsel s fees and expenses incurred in such representation. Rule of Conduct -00(C). Moreover, withdrawal is permitted when it will impose no undue prejudice on the client s interests. Ramirez v. Sturdevant, et. al., Cal. App. th 0, (1st Dist. ) ( We see no basis in law or logic, for a conclusion that an attorney never may withdraw from a case except for cause. ). 1. Akin Gump Has Suffered Extensive Financial Losses While Client Has Benefitted From Free Legal Counsel For More Than Two Years. Akin Gump has steadfastly represented Conquest Media through more than two and a half years of protracted litigation, without payment of attorneys fee or expenses, which now amount to in excess of $1. million. Conquest Media received monthly bills from Akin Gump detailing the work performed for it and the amount owed, and has never contested the amount of those bills. (Gurfein v

8 Decl., at -, Exhs. A.) Akin Gump had intended to withdraw earlier but delayed its withdrawal in order to provide the parties to the Frazer Adversary Proceeding an opportunity to settle their respective claims through mediation. It is now clear, following the parties unsuccessful mediation attempts, that no settlement of this action is imminent. Therefore, Akin Gump cannot delay its withdrawal any longer, and must withdraw from this case.. There Will Be No Prejudice To Conquest Media If The Motion Is Granted. Conquest Media will not suffer any prejudice if the Court grants Akin Gump s motion to withdraw. Discovery has not commenced and no discovery cutoff date has been set, no dispositive motions are pending, and no trial date has been set. Conquest Media has adequate time to hire new counsel. Moreover, Akin Gump is committed to work with whomever Conquest Media hires as replacement counsel to bring them up to speed in sufficient time for the trial so that they can adequately represent Conquest Media s interests. V. CONCLUSION Akin Gump has vigorously represented Conquest Media s interests since the commencement of the engagement. Conquest Media, however, has failed to satisfy its obligations under the Engagement Agreement, failing to pay any fees and expenses since August, 0. Withdrawal at this juncture will result in no undue prejudice to Conquest Media and, as such, withdrawal should be granted. Dated: August, 0 AKIN GUMP STRAUSS HAUER & FELD LLP By: /s/ Peter J. Gurfein Peter J. Gurfein Attorneys for CONQUEST MEDIA GROUP, LLC It is important to note that, although this motion is only now being filed, Client was advised by July, 0, to seek alternative bankruptcy counsel. To date, we have not been advised of any replacement counsel having been retained. v

9 In re: DEATH ROW RECORDS, INC. Debtor(s). CASE NUMBER: :0-bk--VZ CHAPTER 1 NOTE: When using this form to indicate service of a proposed order, DO NOT list any person or entity in Category I. Proposed orders do not generate an NEF because only orders that have been entered are placed on the CM/ECF docket. PROOF OF SERVICE OF DOCUMENT I am over the age of and not a party to this bankruptcy case or adversary proceeding. My business address is: Century Park East, Suite 00, Los Angeles, California 00 The foregoing document described MOTION OF AKIN GUMP STRAUSS HAUER & FELD LLP TO WITHDRAW AS will be served or was served (a) on the judge in chambers in the form and manner required by LBR 00-(d); and (b) in the manner indicated below: I. TO BE SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING ( NEF ) Pursuant to controlling General Order(s) and Local Bankruptcy Rule(s) ( LBR ), the foregoing document will be served by the court via NEF and hyperlink to the document. On August, 0 I checked the CM/ECF docket for this bankruptcy case or adversary proceeding and determined that the following person(s) are on the Electronic Mail Notice List to receive NEF transmission at the address(es) indicated below: Service information continued on attached page II. SERVED BY U.S. MAIL OR OVERNIGHT MAIL(indicate method for each person or entity served): On August, 0 I served the following person(s) and/or entity(ies) at the last known address(es) in this bankruptcy case or adversary proceeding by placing a true and correct copy thereof in a sealed envelope in the United States Mail, first class, postage prepaid, and/or with an overnight mail service addressed as follows. Listing the judge here constitutes a declaration that mailing to the judge will be completed no later than hours after the document is filed. Service information continued on attached page III. SERVED BY MESSENGER, PERSONAL DELIVERY, FACSIMILE TRANSMISSION OR (indicate method for each person or entity served): Pursuant to F.R.Civ.P. and/or controlling LBR, on August, 0 I served the following person(s) and/or entity(ies) by personal delivery, or (for those who consented in writing to such service method), by facsimile transmission and/or as follows. Listing the judge here constitutes a declaration that personal delivery on the judge will be completed no later than hours after the document is filed. Service information continued on attached page I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. August, 0 Tracy Southwell /s/ Tracy Southwell Date Type Name Signature This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California. January 0 F 0-.1 v

10 In re: DEATH ROW RECORDS, INC. Debtor(s). CASE NUMBER: :0-bk--VZ CHAPTER 1 SERVICE LIST In re Death Row Records, Inc. United States Bankruptcy Court, Central District of California Case No. :0-bk--VZ SERVICE BY NEF ON: SERVICE BY OVERNIGHT MAIL UNITED PARCEL SERVICE: Adam N Barasch anb@severson.com Bradley E Brook bbrook@bbrooklaw.com Marc S Cohen mcohen@kayescholer.com Marcus Colabianchi mcolabianchi@thelenreid.com Jeffrey Lee Costell jlcostell@costell-law.com, aicornelius@costell-law.com;merishe@costelllaw.com;rhull@costell-law.com;hdooley@costelllaw.com Jeffrey Lee Costell, aicornelius@costelllaw.com;merishe@costell-law.com;rhull@costelllaw.com;hdooley@costell-law.com Donald H Cram dhc@severson.com Ashleigh A Danker adanker@kayescholer.com Henry S David hdavid@dskllp.com, hdavid@swlaw.com Brian L Davidoff bdavidoff@rutterhobbs.com, calendar@rutterhobbs.com;jreinglass@rutterhobbs.com Jeffry A Davis jadavis@mintz.com Richard K Diamond jlv@dgdk.com, rdiamond@ecf.epiqsystems.com J Rudy Freeman jwashington@pszjlaw.com, rfreeman@pszjlaw.com Debra I Grassgreen dgrassgreen@pszyjw.com Everett L Green egreen@kayescholer.com Steven T Gubner sgubner@ebg-law.com, ecf@ebglaw.com Honorable Vincent P. Zurzolo Chambers of the Hon. Vicent P. Zurzolo East Temple Street, Suite 0 Los Angeles, CA 00 SERVICE BY U.S. MAIL Robert S Altagen Law Offices of Robert S Altagen Corporate Ctr Dr #1 Monterey Park, CA Peter Q Ezzell Gary Wallace HAIGHT BROWN & BONESTEEL LLP 00 Center Dr., Ste. 00 Los Angeles, CA 00- Steven M Goldberg Wilshire Blvd th Fl Los Angeles, CA 00 R. Todd Neilson, Trustee LECG LLC Century Park East, Suite 00 Los Angeles, CA 00 Alvin Brown Conquest Media Group, LLC N. Camden Drive, Suite E Beverly Hills, CA 00 Alvin Brown Valley Vista Boulevard Sherman Oaks, CA 0 SERVICE BY Alvin Brown alvin@adelphia.net Jeffrey J Hagen hagenlaw@earthlink.net This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California. January 0 F 0-.1 v

11 In re: DEATH ROW RECORDS, INC. Debtor(s). CASE NUMBER: :0-bk--VZ CHAPTER 1 James Andrew Hinds jhinds@jhindslaw.com Eric P Israel eisrael@dgdk.com Steven J Kahn skahn@pszyjw.com Ira Benjamin Katz Ikatz@katzlaw.net Jeremy W Katz jkatz@pinnaclelawgroup.com Andrew F Kim kim-a@blankrome.com Andy Kong akong@richardsonpatel.com Duane Kumagai dkumagai@rutterhobbs.com, calendar@rutterhobbs.com Dare Law dare.law@usdoj.gov Ronald L Leibow rleibow@kayescholer.com Elan S Levey elevey@richardsonpatel.com, lgreenstein@laklawyers.com;rfeldon@laklawyers.com Bret D Lewis Bretlewis@aol.com Blake Lindemann ecf@llgbankruptcy.com Peter M Lively PeterMLively00@yahoo.com, PeterMLively00@yahoo.com Alvin Mar alvin.mar@usdoj.gov Kathleen P March kmarch@bkylawfirm.com Daniel J McCarthy dmccarthy@hillfarrer.com Patrick K McClellan pkellymc@pacbell.net Kathryn A Meyer kathryn.a.meyer@irscounsel.treas.gov Randall P Mroczynski randym@cookseylaw.com Robert B Orgel rorgel@pszjlaw.com, rorgel@pszjlaw.com Gary A Plotkin gplotkin@prllplaw.com, calexander@prllplaw.com;linda@prllplaw.com This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California. January 0 F 0-.1 v

12 In re: DEATH ROW RECORDS, INC. Debtor(s). CASE NUMBER: :0-bk--VZ CHAPTER 1 Uzzi O Raanan uor@dgdk.com Oscar D Ramallo oramallo@kayescholer.com Russell H Rapoport rrapoport@prllplaw.com, lgillis@prllplaw.com Anthony J Rothman anthony@arothmanlaw.com Victor A Sahn vsahn@sulmeyerlaw.com Steven J Schwartz sschwartz@dgdk.com Matthew J. Shier mshier@pinnaclelawgroup.com Jeffrey S Shinbrot shinbrot@earthlink.net Pamela E Singer psinger@pszjlaw.com, ksuk@pszjlaw.com Gary A Starre gastarre@gmail.com John N Tedford jtedford@dgdk.com Wayne R Terry wterry@hemar-rousso.com United States Trustee (LA) ustpregion.la.ecf@usdoj.gov Jason Wallach jwallach@bergerkahn.com David Weinstein dweinstein@richardsonpatel.com Sharon Z Weiss sweiss@richardsonpatel.com Steven Werth swerth@kayescholer.com Martin S Zohn mzohn@proskauer.com This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California. January 0 F 0-.1 v