A recent Law 360 story by Brian Steele, “Paul Hastings Seeks $3.9M in Kwok Ch. 11 Fees and Costs”, reports that attorneys with Paul Hastings LLP have sought additional fees and costs of nearly $3.9 million for overseeing the Chapter 11 bankruptcy of Ho Wan Kwok during July and August, continuing to make good on their promise that a previous $12 million fee request was "only the beginning."

In an interim fee application filed in the U.S. Bankruptcy Court for the District of Connecticut, counsel for Chapter 11 trustee Luc A. Despins – himself a Paul Hastings attorney – asked for $3.76 million in fees and more than $146,000 in reimbursements for the firm.  The application notes that Despins filed or prosecuted several adversary proceedings during the fee period and gained access to tens of millions of dollars in escrow funds.  A "substantial portion of the fees" resulted from obstructive acts by Kwok and his associates, the application argued.

"During the fee period, the trustee and Paul Hastings continued the investigation into the financial affairs of the individual debtor and his corporate 'shell game' to shield companies and assets under his ownership and/or control from his creditors," the application said.  "Given the vast network of companies affiliated with the individual debtor, and the fact that these companies or their assets are located around the world, the trustee's investigation was, and continues to be, extensive."

Kwok filed for Chapter 11 protection in Connecticut in February 2022, claiming less than $100,000 in assets and more than $376 million in liabilities.  He was arrested in March 2023 on allegations that he operated a multifaceted $1 billion scheme of securities fraud, wire fraud and money laundering.  Once among the richest men in China, Kwok fled in 2014 amid corruption charges that he claimed were trumped up. He later gained a social media following as a critic of the Chinese government.

In its first interim fee application filed in May, Paul Hastings sought $12.3 million in attorney fees plus costs, noting that the request was "only the beginning" and adding that "what could initially have been perceived as a $100 to $150 million case has now turned into a case involving assets and claims many multiples of that."  The second application sought more than $8.2 million.  To date, Paul Hastings has collected $18.7 million for its work on the case, according to the application.

The debtors in the case are Kwok and two of his companies, Genever Holdings LLC and Genever Holdings Corp., the latter of which is based in the British Virgin Islands.  All three filed for Chapter 11 protection at different times, and a Connecticut bankruptcy judge is administering the cases jointly.  Paul Hastings represents Despins as trustee and the Genever entities.

During the fee period, the firm said that it recorded a total of 3,031.6 hours by attorneys and paraprofessionals.  The application lists 22 docket numbers linked to the case, including 11 adversary proceedings.  Paul Hastings has worked to minimize costs by delegating work to junior attorneys, paraprofessionals and lower-cost local counsel, according to the application.  The latest requested amount does not include a firm-wide hourly rate increase that went into effect Aug. 1; it also excludes pay for 21 timekeepers who billed less than five hours, and it incorporates a reduction to Despins' hourly rate from $1,975 to $1,860.

Other firms and organizations filed separate requests Monday for fees and costs in the case.  Despins' and Genever's local and conflicts counsel, Neubert Pepe & Monteith PC, is seeking more than $285,000, while British Virgin Islands counsel Harney Westwood & Riegels LP wants about $480,000.  Claims and noticing agent Epiq Corporate Restructuring asked for roughly $99,000 in fees and $7,500 in expenses, and Pullman & Comley LLC, which represents the official committee of unsecured creditors, requested about $88,000.