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HomeMy WebLinkAboutC-3048 - VOID• 0 Agenda Item No. 440 CITY OF NEWPORT BEACH Office of the City Manager May 8, 1995 TO: Honorable Mayor And Members Of The City Cou FROM: KEVIN J. MURPHY, CITY MANAGER /� SUBJECT: SPECIAL BANKRUPTCY COUNSEL SERVICES BY THE CIGY CITY OF NEV!P RECOMMENDATION The City Council approve an agreement with Mitchell, Silberberg and Knupp for joint representation with all other Orange County cities in the Orange County Investment Pool Bankruptcy. DISCUSSION The City of Irvine has been utilizing the services of Paul Glassman, a bankruptcy attorney with the firm of Mitchell, Silberberg and Knupp, to represent its interests in the Orange County Bankruptcy case. Paul Glassman has been attending all of the various negotiations that have transpired in the bankruptcy with Paul Brady, City Manager of Irvine, who has served as the Cities Representative on the Orange County Investment Pool Creditor's Committee. In early April a request was received from the City of Irvine that Mr. Glassman's services be set up in a cost sharing arrangement among all the Orange County cities, inasmuch as his time and services have been provided heretofore to all cities at no cost. Mr. Glassman has been available in all meetings of the Orange County City Managers on the bankruptcy issues, has attended the various forums with elected officials and in both cases has answered any and all questions related to all cities or particular problems of individual cities in the settlement agreement. Attached for information is a memorandum from Paul Brady to all City Managers requesting that each City approve a joint services agreement with Mitchell, • Silberberg and Knupp for special bankruptcy counsel. This issue was discussed at a meeting among all the City Managers in early April and it was agreed that each City Manager would recommend retention of this special counsel to their respective City Councils. At my request, a scope of work was incorporated into the agreement as well as a reasonable estimate of the monthly billings which are anticipated by the law firm. /1s) l a • -2- The costs for these services will be deducted from the recovery that will be received by all City participants in the Pool. As you'll recall, there was a reserve fund and an amount set aside in the settlement documents for professional services. In our case, this reserve fund is estimated to be approximately $50,000. The services rendered by this law firm would be spread on a pro rata basis, based on the amount that each City had invested in the Pool as of December 6, 1994. Based on our Pool Balance on December 6, 1994 and the estimated cost on a monthly basis for these services, it is estimated that our pro rata share per month would be approximately $1,156.00. KJM:kf Attachment V. is • 04/13x95 14:45 %2714 724 0045 CITY OF IRVINE 0 APRIL 13, 1995 TO: ORANGE COUNTY CITY MANAGERS FROM: PAUL BRADY, JR. • 0002/002 SUBJECT: ATTORNEY SERVICES AGREEMENT FOR "OFFICIAL SUBCOMMITTEE OF ORANGE COUNTY CITIES" I mould appreciate having you and /or your City Council (if necessary) send me an approved copy of the "Attorney services Agreement" between Orange County cities and Paul R. Glassman and Mitchell, Silberberg and Knupp. It's very important that I receive these agreements so all of us can be assured of our legal representatives being recognized and compensated by the U.S. Bankruptcy Court. If you need another copy of the Attorney Services Agreement, please contact me. Time is of the essence, so the earlier you get them to me, the sooner I and Paul Glassman can get the court to accept same. Remember that the monies for this are incorporated into the "professional fee reserve" as part of the OCIP Settlement Agreement. Would appreciate anything you can do to expedite this item. If you have questions, give me a call at 724 -6249. Thanks. i� PAUL BRADY, JR. City Manager PB:rm 0 0 ATTORNEY SERVICES AGREEMENT THIS ATTORNEY SERVICES AGREEMENT ( "Agreement ") is made and entered into this _ day of March, 1995 by and between the municipal corporations which are executing this Agreement (collectively the "Cities" and individually the "City") collectively organized as 'The "Official Subcommittee of Orange County Cities" (hereinafter the "Subcommittee ") in connection with legal services to be rendered by Paul R. Glassman, P.C. ( "Glassman ") and Mitchell, Silberberg and Knupp ( "MSIC) (Glassman and MSK are collectively the "Law Firms ") in the Chapter 9 case of Orange County Investment Pool, an instrumentality of Orange County, which is currently pending as Case No. SA, 9422273 JR in the United States Bankruptcy Court for the Central District of California, Santa Ana Division (hereinafter, the "Pool Case "). THE LAW FIRMS AND THE CITIES (INDIVIDUALLY AND AS MEMBERS OF THE SUBCOMMITTEE) AGREE AS FOLLOWS: i A. SERVICES. The Law Firms shall provide service, advice and represent the Subcommittee on various legal matters involved in the Pool Case, including without limitation, bankruptcy, insolvency and litigation matters. In providing such advice, representation and services, the La Firms shall primarily report directly to the City of Irvine in its capacity as the designated "Official Representative" of the Subcommittee and, when appropriate, shall report directly to the Subcommittee as a whole (or to any individual City upon request). • The Law Firms will be under the direction of and report directly to the City Manager of the Official Representative. All billings sent out under this Agreement shall be provided to the City Manager of the Official Representative for his approval. The Subcommittee understands and acknowledges that the Law Firms may also act in the Chapter 9 proceeding of the County of Orange, a political subdivision of the State of California, which is currently pending as Case No. SA 94 22272 JR in the United States Bankruptcy Court for the Central District of California, Santa Ana Division (hereinafter "Orange County Case ") as well as a possible Chapter 11 action with respect to the Pool Case in the event it is determined to be a business trust or partnership. The Law Firms advise the Cities that the Law Firms maintain errors and omissions insurance coverage applicable to the services to be rendered under this Agreement as required by the California Business & Professions Code. The policy • limits of that coverage exceed $100,000 per occurrence and exceed $300,000 per policy term. Nothing in this Agreement is intended to or shall be deemed to be construed as a guarantee or promise about the outcome of the matter on any phase thereof. The Law Firms make no guarantee or promises and any comments concerning the various matters are expressions of opinion only. 1 JOT_D0021RV B. COMPENSATION AND COSTS. The Law Firms shall be compensated for services rendered and reimbursed for expenses in accordance with the regular • hourly rates of each lawyer rendering services. The Law Firms agree not to seek compensation for any services rendered or expenses incurred prior to March 15, 1995. The Law Firms also agree to use their best efforts to keep the Subcommittee informed of developments, to assign appropriate personnel to the tasks associated with the work under this Agreement and, to the extent reasonably possible, to minimize the costs and expenses associated with the work undertaken pursuant to this Agreement. The Law Firms estimate that the budget for their services pursuant to this Agreement shall be on average approximately $50,000 - $60,000 per month. The Subcommittee understands and acknowledges that this budget is merely the Law Firms' best reasonable estimate of the fees and expenses which might be incurred by the Subcommittee members in resolving the Pool Case and related bankruptcy actions and that there are circumstances which may cause this budget to be exceeded. Specifically the Subcommittee members understand and acknowledge that the institution of an adversary proceeding (or other litigation) may cause an increase in this estimate. The Law Firms will endeavor at all times to advise and represent the Subcommittee, both individually and collectively, within the constraints of this budget, however, in the event it appears to the Law Firms that the budget will be substantially exceeded, the Law Firms will advise the Subcommittee thereof and, if possible, provide a revised budget estimate. The Subcommittee agrees and acknowledges that the Law Firms may seek to be employed as official Subcommittee counsel by the Bankruptcy Court. In addition, the Subcommittee agrees and acknowledges that the Law Firms may seek payment of their fees and expenses on a monthly basis pursuant to the proposed interim compensation arrangement (or to any variation of the same). The Law Firms agree that, to the extent they receive payment pursuant to any arrangement, such payment shall be applied against any amounts due under this Agreement and further, that the Official Representative may be reimbursed for any amounts it has paid under this Agreement out of any such interim payments. C. DISCLOSURE OF CONFLICTS. The Law Firms represent to the Subcommittee that they have the following representations: 1. MSK and Glassman have represented and continue to represent the City of Irvine in connection with the 'Tool Case "; • 2. MSK has and continues to represent Bank of America in regard to matters not related to the Pool Case or the Orange County Case; 3. MSK has represented and continues to represent the City of Garden Grove in regard to certain labor matters; 4. MSK has done work for the City of Montebello; 2 107_DOOZtxv E 5. MSK has done corporate work for Donaldson Lufkin and Jenette; and 6. MSK has done and continues to represent Liefer Capital in regard • to certain labor matters; collectively the above representations are referred to as the 'Disclosed Representations ". D. CONFLICT OF INTEREST. The Cities agree to waive any and all conflicts of interests (whether real or potential) that may arise in connection with the retention of and services performed by the Law Firms in connections with the following: 1. The Disclosed Representations; 2. The representation of the City of Irvine in its individual capacity or as Official Representative of the Subcommittee or as representative of the Subcommittee on the official Participants Committee in the Pool Case or in any case related to the Pool Case; 3. The representation of a majority of the Cities on the Subcommittee • on issues as to which there is disagreement among the Subcommittee; 4. The representation of any City (as well as other third parties) who have consistent interests on common issues that are not adverse to the Subcommittee about which the Subcommittee has chose to take no action; 5. The interpretation and enforcement of the terms of the Agreement, and 6. The representation of other clients (who might be involved in the Pool Case) on matters other than the Pool Case or the Orange County Case. E. BILLING. Beginning thirty (30) days from the date of this Agreement and thereafter by the last day of each calendar month during which the Law Firms continue to represent the Subcommittee pursuant to this Agreement, the Law Firms shall submit to the Official Representative a monthly statement for the preceding month of charges showing the Law Firms personnel involved, the tasks performed by the Law Firms, the time actually expended by each such person for each task, and all • reimbursable expenses and costs incurred by the Law Firms for the calendar month preceding each such statement. The first such bill shall include all fees and costs theretofore accrued. The Law Firms and the Cities understand and acknowledged that the Official Representative, while initially responsible for paying all bills, will sub -bill each City its share of the legal fees and costs incurred. The amount of each City's payment 3 jor 000ziRv 0 0 obligation under this Agreement shall be based upon each City's pro -rata outstanding principal balance in the Orange County investment pool as of December 6, 1994. In determining the amount of a City's share in the Orange County investment pool as of • December 6, 1994, the amount of the claim of all entities, sub - agencies or divisions related to or controlled by a City shall be included as if the claim were owned by the City. The Official Representative shall be entitled to reimburse itself through the subbilling for any fees paid to the Law Firms pursuant to this Agreement. F. TERMINATION. This Agreement may be terminated by the Subcommittee at any time by written notice from the Official Representative to the Law Firms. This Agreement may be terminated by the Law Firms by giving thirty (30) days prior written notice to the Official Representative. G. ASSIGNMENT. This Agreement is not assignable either voluntarily or by operation of law. H. INDEPENDENT CONTRACTOR. The parties agree that the Law Firms are independent contractors and not employees of the Official Representative or the Subcommittee and, therefore, neither the Law Firms nor any of their principals or employees are entitled to the salaries, benefits, or privileges of being an employee of the Official Representative or the Subcommittee, including, but not limited to vacation • pay, holiday pay, overtime pay, health insurance, disability or retirement benefits, and workers' compensation benefits. I. EFFECTIVE DAY. This Agreement shall be deemed to pertain to all work undertaken by the Law Firms on behalf of the Subcommittee on or after March 15, 1995. IN WITNESS WHEREOF, the Law Firms and each City designated below, individually, and as members of the Subcommittee, hereby agree and consent to the terms and conditions set forth in this Agreement. CITY OF IRVINE CITY MANAGER CITY OF IRVINE is CITY MANAGER CITY OF ANAHEIM 4 JOT oaoz[Rv CITY MANAGER • CITY OF BREA CITY MANAGER CITY OF BUENA PARK CITY MANAGER CITY OF COSTA MESA CITY MANAGER CITY OF CYPRESS CITY MANAGER CITY OF DANA POINT CITY MANAGER CITY OF FOUNTAIN VALLEY CITY MANAGER CITY OF FULLERTON CITY MANAGER CITY OF GARDEN GROVE CITY MANAGER CITY OF HUNTINGTON BEACH 5 IoT_000rtxV • • • • • 0 CITY MANAGER CITY OF LAGUNA BEACH CITY MANAGER CITY OF LAGUNA HILLS CITY MANAGER CITY OF LAGUNA NIGUEL CITY MANAGER CITY OF LA HABRA CITY MANAGER CITY OF LAKE FOREST CITY MANAGER CITY OF LA PALMA CITY MANAGER CITY OF LOS ALAMITOS CITY MANAGER CITY OF MISSION VIEJO CITY MANAGER CITY OF NEWPORT BEACH M 0 )0T_DD0ZUZV 0 CITY MANAGER CITY OF ORANGE CITY MANAGER CITY OF PLACENTIA CITY MANAGER CITY OF SAN CLEMENTE CITY MANAGER CITY OF SAN JUAN CAPISTRANO CITY MANAGER CITY OF SANTA ANA CITY MANAGER CITY OF SEAL BEACH CITY MANAGER CITY OF STANTON CITY MANAGER CITY OF TUSTIN CITY MANAGER CITY OF VILLA PARK F E JOT_DO02IRV • • • CITY MANAGER CITY OF WESTMINSTER CITY MANAGER CITY OF YORBA LINDA PAUL R. GLASSMAN A PROFESSIONAL CORPORATION PAUL R. GLASSMAN, P.C. •MITCHELL, SILBERBERG AND KNUPP A PARTNERSHIP OF PROFESSIONAL CORPORATIONS JAMES O. THOMA, P.C. • 8 JOT_DMIIRV