Sir Allen’s Attorney Debacle

Mary Flood of the Houston Chronicle has an excellent piece here on the efforts of Allen Stanford’s current and future criminal defense attorneys to get paid. Dick DeGuerin wants out, not having seen any money since March, but U.S. District Judge David Hittner will not allow it until a replacement comes in “unconditionally.” Such a ruling looks abusive to me this early in the proceedings. Bob Luskin wants to represent Stanford, but will not come in under Judge Hittner’s conditions unless payment is assured. Luskin’s problem is that Stanford’s assets have been frozen by a different federal judge out of Dallas in the SEC civil action. Stanford’s D&O carrier was purportedly willing to pay defense costs until the court-appointed receiver in the Dallas action announced that the policy proceeds were part of Stanford’s frozen assets and could not be released. Co-defendant Laura Pendergest-Holt and the other co-defendants could also pay their lawyers out of the D&O proceeds. Dan Cogdell, Pendergest-Holt’s criminal defense attorney says: “It couldn’t be more obvious that we’re entitled to be paid.” Undoubtedly he is correct. D&O Policies are purchased precisely for this reason. It just goes to show you something they never teach in law school. Insurance rules the business world. Meanwhile, Stanford and the DOJ are battling over Judge Hittner’s detention order in the Fifth Circuit. The order should be overturned–but don’t bet too much money on it in the Fifth Circuit.