The FDIC will be motivated to settle quickly. The Trustee retained two law firms to act as her special counsel in the Tax Refund ownership litigation on a contingency fee basis – Boies, Schiller & Flexner LLP and Klee, Tuchin, Bogdanoff & Stern LLP.
The first dollars recovered will reimburse the Estate for all expenses paid. If any funds remain after payment of all those expenses, then:
Thus, the 9-month period referenced runs through 6/19/15. If the FDIC settles before 6/19/15, the fee will only be 20 percent of Net Recoveries. Afterwards, the firms receive 25 percent of Net Recoveries.
Estimated distributions to creditors under the Settlement Agreement based on a 20 percent contingency fee:
Gross Tax Refund Recovery: $15,322,500
Special Counsel Contingency Fees (20%) (includes 20% of $500,000 in saved administrative expenses and 20% of the imputed value of waived FDIC claim of $15,322,500): $3,716,000
Other Administrative Expenses: $1,000,000
Distributable Funds: $10,606,500
Total Unsecured Claims: $61,750,000
Percentage Recovery on General Unsecured Claims: 17.18%
Total to be Distributed to the FDIC-Receiver: N/A
Total to be Distributed to Non-FDIC Creditors: $10,606,500