Legal costs are mounting for Dr. Dipak Desai, who is at the center of the 2007 hepatitis C outbreak.
Bankruptcy and criminal attorneys representing Desai are seeking more than $330,000 in fees and expenses for their services since February, when Desai filed for Chapter 11 reorganization, according to Bankruptcy Court records.
The law firm of Nossaman LLP is asking for $207,984.94 for its bankruptcy work on Desai’s behalf, and the firm of Wright Stanish & Winckler wants to be paid $125,904.25 for defending Desai in a criminal investigation that resulted in his June 3 indictment, the records show.
In court papers, John Hansen, a senior partner in Nossaman LLP, said his firm filed the Chapter 11 bankruptcy petition for Desai on Feb. 26 after the gastroenterologist spent more than $1 million defending himself in the ongoing massive civil litigation stemming from the 2007 hepatitis outbreak at his clinics.
Desai sought "some breathing space from the litigation" and an opportunity to propose a "global settlement" through a debt reorganization plan, Hansen wrote in his court papers.
Nossaman LLP billed 515.2 hours of work from a $250,000 retainer Desai put up before the Chapter 11 bankruptcy petition was filed, Hansen wrote.
Hansen, two other senior partners and an associate partner billed a total of 378.2 hours.
Hansen said he put in 200.6 billable hours on the case himself, at a rate of $550 an hour, for a total of $110,330.
In all, the firm billed Desai $203,608 plus another $4,376.94 in expenses, Hansen wrote.
In separate court papers, attorney Margaret Stanish said the value of the time Wright Stanish & Winckler has put in defending Desai in the criminal case, so far, is more than the $100,000 retainer the physician deposited into a trust account for the firm.
She said the firm wants to charge Desai $125,677.50 for 283.9 hours of work, plus $226.75 for expenses.
The majority of the work, which was performed by the firm’s lead partner, Richard Wright, was related to the county grand jury investigation of Desai, which began in March, Stanish wrote.
Wright billed for 210.5 hours, at $475 an hour, for a total of $99,987.50. Stanish put in 69.7 hours at $350 an hour for $24,395. And Karen Winckler worked 3.7 hours at $350 an hour for $1,295.
U.S. Bankruptcy Judge Mike Nakagawa has scheduled a July 20 hearing on whether to award the fees to the lawyers.
The bankruptcy attorneys informed Nakagawa that Desai reported having $22,262,573 in assets as of the end of May. Most of those assets, $18,277,379, were tied to business partnerships.
Prosecutors, however, believe Desai might have tens of millions of dollars more hidden from public view.
He was said to have bragged about being worth as much as $200 million.
Desai, 60, and two of his former nurse anesthetists, are facing felony charges that include racketeering, insurance fraud and neglect of patients.
The indictment revolves around the cases of seven people health officials say were infected with the potentially deadly hepatitis C virus at Desai’s Endoscopy Center of Southern Nevada: one on July 25, 2007, and six on Sept. 21, 2007.
Public health investigators said the virus was spread when a nurse anesthetist during a colonoscopy would reuse a syringe to draw medication for a patient, contaminating the medication vial, which then would be used for other patients.
All three defendants are set to stand trial until March 14, which means Desai is likely to have to spend considerably more money on his defense in the coming months.
"Due to the complexities of the issues and the number of legal actions going on, it’s going to be an expensive legal bill for him," said William Dressel, president of the National Judicial College in Reno.
Much of the additional money will be spent in the looming battle over whether Desai is competent to assist his lawyers.
Desai’s wife, Kusum, holds the power of attorney in the bankruptcy case, where the physician’s lawyers contend two strokes left Desai "incapacitated" in the aftermath of the hepatitis outbreak.
Contact Jeff German at jgerman@review journal.com or 702-380-8135 or read more courts coverage at lvlegalnews.com.