Judge Says O’Melveny Will Have to Give Up $750K in SonicBlue Fees

A California bankruptcy judge has ruled that O'Melveny & Myers will have to forgo $750,000 in fees in the bankruptcy of SonicBlue.

Judge Marilyn Morgan ruled after partner Suzzanne Uhland was criticized for failing to disclose a waiver in a 2005 settlement that benefited some creditors over others, the Recorder reports. Uhland will not have to give up about $1 million in fees already collected, the story says.

O’Melveny had argued it wasn’t its job to investigate the waiver, the Legal Pad blog reported in advance of the hearing.

Firm spokeswoman Marjory Appel told the Recorder: "We believe that we demonstrated to the court that we faithfully and effectively carried out our duties to our client and delivered tremendous value to the SonicBlue bankruptcy estate.”

The story says the SonicBlue bankruptcy “has been a scourge for a few firms.” Pillsbury Winthrop Shaw Pittman agreed to pay $7.6 million and forgo $2.4 million in fees to settle a trustee’s claim that it failed to disclose a conflict. The firm was kicked off the case two years earlier. Another firm, Levene, Neale, Bender, Rankin & Brill, settled for $2.5 million in November.