Bankruptcy Judge Pokes Fun at East Coast Earthquake Response

In the eyes of an earthquake-hardened bankruptcy judge, the 5.8-magnitude earthquake that shook the East Coast last August is nothing to write home about.

Nor is it something for bankruptcy professionals to note in their billing records, the judge said, like financial adviser Protiviti Inc. did in its work on the liquidation of law firm Howrey LLP before Judge Dennis Montali of the U.S. Bankruptcy Court in San Francisco.

The Washington Business Journal reported that as Montali was reviewing Protiviti’s requested fees, he stopped to ask why two of its Virginia-based consultants noted the earthquake in their time entry of work performed on the case. The consultants each listed three hours for the Aug. 23 entry, although no fees were charged.

“If we have earthquakes here, we take it in stride,” Montali said, according to the Washington Business Journal. “We don’t even bill time for it.”

Wiley Rein LLP’s Jason Gold, a Washington, D.C., attorney who is representing Howrey, was in the courtroom and said the judge’s comments provided a moment of levity in the routine hearing. (Bankruptcy laws require professionals on a company’s tab to submit detailed reports on the fees and expenses they charge, which a court must approve before they can be paid.)

“After the hearing was over, we continued to joke about it,” Gold told Bankruptcy Beat Friday, recalling how his table at a Baltimore restaurant shook and rotated when the earthquake, his first, hit.

Wiley Rein’s own $1 million in legal fees, which Gold noted the judge approved in full, contained two earthquake-related time entries on Aug. 23: a telephone conference regarding a landlord’s decision to close the building housing Howrey’s D.C. office “due to earthquake” and contacting Howrey’s former partners to reschedule a 4 p.m. phone call for that day “due to earthquake.”

D.C. and other cities up and down the East Coast took a lot of flak from Californians who probably wouldn’t have even been woken up from their sleep by the shaking that sent hundreds of downtown D.C. workers (including Bankruptcy Beat, whose home base is about a block from Wiley Rein’s K Street office) spilling into the streets on the afternoon of Aug. 23. Cell phones weren’t working, and those who haven’t lived on the West Coast were confused and scared at what had just happened.

But that’s the danger of living in the nation’s capital in a post-Sept. 11 world, where the smallest tremble, a single loud noise, or a bag abandoned on the sidewalk could be innocuous or could be the harbinger of a deadly attack. Every day, riders of D.C’s Metrorail and bus system are warned that “if you see something, say something,” and constant reminders of the District’s high-security status can be found in the concrete barricades outside key buildings and Secret Service gunmen hanging out of the black sport-utility vehicles that speed the president through city streets.

So, Californians, please just cut us some slack on this one. You may be pros on riding out the earth’s rumbling and shaking, but do you have to alter your morning commute to go around streets blocked-off by a bomb squad approaching a cardboard box? Do you have helicopters constantly monitoring your heavily restricted airspace, ready to intercept any intruders? Does your city regularly host and secure the world’s leaders, all to the general inconvenience of anyone trying to drive or use public transportation?

That’s what we thought.