In the Bayou case, the most notable recent case of massive investment fraud, lawyers had some success going after investors who’d pulled money out of the fund before its collapse — but according to Bloomberg News, quoting investor lawyer Carole Neville, $20 million of the $33 million they recovered went to pay legal fees. The piece quotes law professor Lynn LoPucki, now of Harvard, being scathing on the subject: “Bankruptcy trustees ‘spend huge amounts of money trying to get money from some investors and give it back to other investors,’ LoPucki said. ‘The incentive of the trustee and the lawyers is to churn, to bring lots of cases, spend lots of time and charge lots of fees.'”
3 Comments
Lets victimize the victim who finally wised up before the scheme collapsed and reward those who stayed in because of greed.
“Somebody, somewhere, owes you money!”
Doug you really don’t understand this do you.
The Goal is NOT to victimize the victim. That is a tragic but but acceptable side effect of the achieving a truly noble goal. That of rewarding a LAWYER!