An independent expert must calculate former attorney Robert Powell’s net worth in “Kids for Cash” litigation by Feb. 6, federal court records show.
U.S. District Court Judge A. Richard Caputo set a deadline at the request of attorneys representing 1,800 parents and juveniles who sued Powell and others linked to a judicial corruption scandal in 2009.
As part of a settlement agreement, Powell paid the plaintiffs $4.75 million, but his potential payment of up to $2.75 million more hinges on his net worth.
Pittsburgh expert Thomas Pratt was hired by both sides to tally the net worth because the plaintiffs had swiftly rejected Powell’s January 2017 estimate that he has a negative net worth exempting him from paying more.
Unable to obtain a status report from Pratt, the plaintiffs filed a motion Sept. 29 asking the court to determine the amount of time necessary for Pratt to complete his evaluation. The settlement agreement did not set a time limit.
In his ruling, Caputo said settlement agreements are governed by ordinary principles of contract law. When no time is specified in written agreements, it is a “well-settled principle” backed by case law that work shall be completed “within a reasonable time depending upon the nature of the business,” he wrote.
Caputo said Pratt was formally engaged to calculate the net worth on or about Feb. 7, 2017, and the judge concluded one year is a reasonable time for Pratt to present his final report.
According to court filings:
The plaintiffs first sought court intervention in April, maintaining Powell had “stonewalled” the release of information to Pratt. Caputo rejected that request in August, saying it appeared Powell had furnished documents.
When the plaintiffs sought a status update from Pratt in August, the expert said he could not respond because the two sides have disagreed about such disclosure. Attempts by attorneys to reach an agreement on an update were unsuccessful.
Without a court-ordered deadline, the settlement closeout would be “delayed indefinitely and may ultimately never come to an end,” the plaintiffs argued.
Powell’s Pittsburgh attorney, Stephen S. Stallings, has maintained the judge should not impose a time limit because there was none in the heavily-negotiated settlement agreement.
Stallings said Powell has provided extensive materials and follow-up information to Pratt, including multiple deliveries in paper and electronic form May 31, Aug. 15, Sept. 11 and Sept. 22. Powell traveled to Pittsburgh to meet with Pratt and provide requested information Sept. 25, and Stallings said he also met with Pratt several times to convey requested information.
Primary residence excluded
Pratt had requested the first batch of financial information from Powell on Feb. 17, including copies of all documents that had been used to determine Powell’s net worth, income tax returns 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 site 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 all 31 itemized requests for documents and materials March 15.
Powell would be required to make a second payment if his net worth is found to exceed $4.75 million.
The settlement agreement gives the consultant the power to examine and value Powell’s assets and liabilities, with the exception of his principal residence and any personal property worth less than $5,000.
A Hazleton-area native, 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.
Reach Jennifer Learn-Andes at 570-991-6388 or on Twitter @TLJenLearnAndes.