Quiros claims his attorneys kept him in the dark and overcharged him.
Miami-based attorney Melissa D. Visconti of Damian & Valori LLP, Quiros’ new counsel, submitted a motion late last week that puts her client’s previous lawyers on notice that he intends to object to the roughly $3 million in legal bills they are seeking to be paid.
“Defendant, Ariel Quiros,” she wrote, “recently terminated the law firms, Leon Cosgrove and MSK, for, among other reasons, concerns regarding excessive bills and failing to follow the instructions of the client or to keep the client apprised of developments in litigation in which Mr. Quiros was a part.”
However, in response, a court filing from Quiros’ former attorneys say prior to terminating them, Quiros had not indicated any problems with their representation. They point to a text Quiros sent David Gordon, who had served as his lead counsel, just 16 days before Quiros fired him.
The text, according to the filing, stated, “David, I just want to thank you for your efforts, and to please stay next to me until it’s over. I believe in your efforts and talent. We will get a break soon. The law and truth has to prevail. Thank you on all fronts.”
Quiros last week dropped his former attorneys, but court records filed at that time revealed little about the reason why, and his new attorney as well as past lawyers have not returned phone calls seeking comment.
The flurry of filings submitted late last week reveal a breakup that is getting increasingly bitter with each additional motion submitted to the court.
And at stake for his former legal team is no longer proving Quiros’ innocence, but getting paid the almost $3 million in legal bills they say he owes them.
The fired firms that had represented Quiros include Leon Cosgrove LLC in Coral Gables, Florida, and Mitchell Silberberg & Knupp LLP, where Gordon works. The MSK law firm has offices in New York City, Los Angeles and Washington, D.C.
Those attorneys have sought to intervene in the federal U.S. Securities and Exchange Commission investor fraud lawsuit pending against Quiros.
Judge Darrin P. Gayles last week ruled in that case Quiros’ new counsel, not his previous legal team, is entitled to $100,000 recently released to Quiros from an insurance policy as well as potentially more money under that policy.
His former legal team objects to the judge’s ruling, which directs that the insurance money be given to new counsel, Damian & Valori LLP, even though the firm has only been on the case for about a week.
MSK and Cosgrove say they have done much more work in the nearly yearlong case.
Quiros remains in a separate legal fight with the insurance company, Ironshore Indemnity, over whether his policy should cover up to $10 million for his legal defense in the SEC and state cases, as well as the investor fraud lawsuits pending against him.
A hearing in the SEC lawsuit against Quiros had been set for Wednesday in federal court in Miami, where Quiros resides and many of his businesses are located.
But, Judge Gayles late last week called off that hearing, just days after Quiros obtained new counsel.
“While the Court has provided Defendant Quiros with limited access to some of the insurance proceeds to pay some of his current counsel’s fees and costs,” Judge Gayles wrote. “Leon Cosgrove, LLC and Mitchell, Silberberg & Knupp are no longer Quiros’s counsel or actively involved in this action.”
The judge added, “The Court does not find it appropriate to resolve a private attorney’s fee issue between Quiros and his prior counsel in this action. There will NO hearing on April 12, 2017.”
Quiros’s former legal team filed their own motion late Friday asking the judge to reconsider that order and allow the hearing to go forward.
They added that Quiros’ new counsel didn’t want the hearing to take place over fear of having a losing arguments, and the court shouldn’t reward “Machiavellian gamesmanship or endorse misdirection.”
The filing adds, “It is perhaps not surprising that they have sought to avoid the Hearing, since the authority allowing insurance payments to León Cosgrove and MSK to defray their defense costs is overwhelmingly strong.”
The matter of how much Quiros’ former legal team had been charging in fees has come up several times before in the case.
However, it wasn’t brought up by Quiros, but by the SEC.
In one filing, SEC attorney Christopher Martin raised concern that Quiros was squandering money that could go to defrauded investors. Quiros, Martin wrote, was paying for a “Cadillac defense team,” with billing rates for its partners ranging from $600 an hour to $805 an hour, averaging $708 an hour.
Those rates, Martin added, are “billing fees equivalent to representing a multi-millionaire with untainted funds who could pay for such services.”
Quiros’ attorneys at that time replied that those rates are comparable to “competitor” firms, both nationally and in the Miami area.
Quiros, owner of Q Resorts, holding company that includes Jay Peak, along with Bill Stenger, Jay Peak’s former president, are accused of misusing $200 million of the $350 million they raised under the federal EB-5 foreign investor program.
The money was meant for a series of development projects over an eight-year span at the northern Vermont ski area and other projects in Newport and Burke.
Quiros is also accused of looting $50 million of that money to pay for personal expenses.
Stenger has reached a plea that settled his SEC case. A separate state investor fraud lawsuit also remains pending against the two former business partners.
