September 23, 2021
A recent Law 360 story by Rose Krebs, “Gibson Dunn Under Fire For Billing in Landmark Theatres Suit,” reports that Gibson Dunn & Crutcher LLP and Ross Aronstam & Moritz LLP have been accused of problematic billing in a Delaware Chancery Court suit over a price adjustment dispute that followed the 2018 sale of Landmark Theatres to billionaire real estate developer's Charles S. Cohen's theatrical production and distribution company.
In a brief, Cohen Exhibition Company LLC told Vice Chancellor Paul A. Fioravanti Jr. that a request by Gibson Dunn and Ross Aronstam to have the buyer reimburse roughly $840,000 of the sellers' legal costs and expenses should be reduced by no less than about $396,000. A lesser-than-sought amount should be awarded, in part, due to the firms' "failure to support the hourly billing rates" included in the fee motion, the brief says.
The sellers, Roma Landmark Theaters LLC and MCC Entertainment LLC, which are represented by the two law firms, told the court in August that buyer Cohen Exhibition Company should have to pay costs and expenses they incurred litigating a battle over post-closing adjustments that ended up being largely decided in their favor.
But Cohen raised issues with the billing. "Both the Ross Aronstam and Gibson Dunn invoices contain significant redactions of time entries," Cohen said in Tuesday's filing. "The redactions are particularly problematic insofar as they not only completely obscure the services performed ... but also because they even obscure the timekeeper and amount of time spent." Cohen argues that due to the redacted information it is "completely impossible" for the court to assess the reasonableness of certain invoices.
The company also pointed to "excessively high charges for Westlaw research, in one month totaling over $20,000 alone" in Gibson Dunn's bills. The online legal research service "offers attorneys a plan with unlimited access to Delaware cases, statutes, and briefs at a flat monthly fee," according to Cohen. Granting those fees would effectively mean Cohen paying for "Gibson Dunn's overhead in maintaining a legal research account with Westlaw," the company said.
Cohen additionally took aim at what it described as the "high hourly rates billed by the attorneys at Gibson Dunn." "Here, plaintiffs' attorneys have not provided any proof as to what their customary billing rates are for comparable matters," the brief said, highlighting one rate of up to $1,645 per hour. "Nor have they provided any evidence as to each attorney's background and years of experience to support the respective claimed rates." Cohen also protested what it said was the firms' request for reimbursement for "preparing and litigating" an unsuccessful motion to dismiss counterclaims lodged by the buyer in the litigation.
Roma and MCC said in court papers that an arbitration decision went in their favor, entitling them "to receive nearly all of the escrowed funds." Thus, they argued they are entitled to reimbursement for costs and expenses, especially since alleged legal posturing by the buyer led to a delay in escrow funds being turned over. The Chancery Court confirmed the arbitration decision and the seller plaintiffs were awarded roughly $2.6 million plus additional interest and other costs, according to the motion, which added, "The fee award sought here is fair and reasonable in light of these positive results."