An ongoing battle over the calculation of former attorney Robert Powell’s net worth in “Kids for Cash” litigation is back in court.
Lawyers representing 1,800 parents and juveniles who sued Powell and others linked to a judicial corruption scandal in 2009 recently asked a federal judge to decide if they are entitled to a status report on the net worth determination.
A Hazleton-area native, Powell had paid the plaintiffs $4.75 million last year under a settlement agreement, but he estimated in January he has a negative net worth that would exempt him from paying up to $2.75 million more.
Independent expert Thomas Pratt, of Schneider Downs & Co. Inc. in Pittsburgh, will tally the net worth because the plaintiffs rejected Powell’s assessment.
Without a court-ordered status report and deadline to calculate the net worth, the settlement closeout will be “delayed indefinitely and may ultimately never come to an end,” the plaintiffs argued in their recent filings.
Powell’s Pittsburgh attorney, Stephen S. Stallings, maintained the agreement contained no mechanism for plaintiffs to demand a list or index of the materials Powell has provided to Pratt, according to a Sept. 13 email from Stallings included in the court filings.
The plaintiffs initially sought court intervention in April, maintaining Powell had “stonewalled” the release of information to Pratt. U.S. District Judge A. Richard Caputo rejected that request Aug. 15, saying it appeared Powell had furnished documents.
According to the plaintiffs’ new filings:
Pratt declined the plaintiffs’ Aug. 10 status update request, referencing disagreements about disclosure.
“Please work this out among yourselves, and I will be glad to provide whatever both sides agree is appropriate,” Pratt wrote.
However, no resolution was reached following an attorney email exchange.
Plaintiff attorney Joseph Fantini, of Anapol Weiss in Philadelphia, made a final request to Stallings on Sept. 13, saying an update was necessary to determine if Powell is complying with a requirement to furnish Pratt with documents reasonably requested.
The plaintiffs’ legal counsel found nothing in the settlement agreement prohibiting such an update, Fantini said.
Replying that day, Stallings said Powell is honoring the settlement agreement, called it the “MSA” in court documents.
“If he does not comply with the MSA’s provisions regarding production of materials to Mr. Pratt, Mr. Pratt’s report will reflect that fact, assuredly,” Stallings wrote.
Stallings referred to a history of leaks to the media and counsel in other cases and said he is confident Powell would have refused an agreement requiring plaintiffs to receive a list of materials he produced to Pratt. He also described the plan to seek court intervention as “frivolous” and said he would seek sanctions against legal counsel if it proceeds.
The plaintiffs stressed they are not seeking the actual documents Powell furnished to Pratt. They highlighted Stallings’ “vexatious” Sept. 13 email statement that Pratt’s report would indicate if all materials are not furnished.
“Since Mr. Pratt’s report is final and unappealable the fact that counsel for the Powell defendants would envision an incomplete final report from Mr. Pratt which ‘assuredly’ reflects Mr. Powell’s lack of cooperation with the net worth analysis is further evidence of the Powell defendants’ bad faith,” it said.
The plaintiffs want a list of all documents Pratt has received and is awaiting. They also want to know if Pratt has encountered any issue he can’t resolve without additional information, when Pratt expects to complete his evaluation and a court-imposed deadline for Pratt to produce a final report.
Stallings has said time was needed because Pratt’s request was voluminous.
February request
Pratt requested the first batch of financial information Feb. 17, including copies of all documents that had been used to determine Powell’s net worth, income tax returns from 2011 to the present and copies of financial statements, loan applications and borrowing requests/agreements.
He also sought all correspondence between Powell, The Powell Law Group PC and Garretson Resolution Group about legal fees related to an environmental contamination settlement against the former Kerr-McGee Corp., which had operated a railroad tie manufacturing facility in Avoca linked to health problems. The Ohio-based Garretson handles the bankruptcy trust fund established to pay claimants.
In response to Pratt’s invitation, the plaintiffs’ legal counsel recommended other potential assets they believed should be analyzed in February. At Stallings’ request, Pratt provided a consolidated list of every item requested from Powell on March 15.
Powell served an 18-month prison sentence for failing to report a $2.8 million kickback scheme involving former county judges Michael Conahan and Mark Ciavarella and two juvenile detention centers Powell had co-owned, court records show. The two former judges are still serving federal prison sentences.
