With almost half a million dollars in exorbitant lien charges, AutoLotto Inc. is another victim of the corrupt Chancery Court-Skadden Arps relationship

In a groundless but expected ruling, Delaware Vice Chancellor Morgan T. Zurn granted a Skadden Arps and Slate Meagher & Flom charge for a lien of $400,000 in the AutoLotto Inc. case. This motion adds to the handful of cases of the Delaware Chancery Court encouraging Skadden Arps casual entitlement to charge companies excessive fees.

In an engagement letter between Skadden and AutoLotto, Skadden represented AutoLotto in litigation that resulted in the return of over $16 million in escrowed funds from J. Streicher Financial LLC. Skadden initially sought to charge the client over $3 million in charges against the escrowed amount, stating that the costs included unpaid representation fees and “a variety of other matters.” AutoLotto filed a countersuit mentioning that Skadden was wrongfully holding the escrowed funds, violating their agreement. AutoLotto’s attorney confirmed that Skadden allegedly billed for charges “unrelated to and beyond the scope of the action.”

The Delaware Court of Chancery and Skadden Arps have a long history of similar cases with unscrupulous charges. TransPerfect –the world’s largest provider of language and technology solutions for business – has dealt with the delinquencies of the Delaware Chancery Court and Skadden for nearly a decade due to the Chancery’s unprecedented forced sale of the company. Former Chancery Court-appointed Custodian Robert Pincus and Skadden overbilled TransPerfect to the tune of tens of millions of dollars in undisclosed legal fees. In the Citgo case, the Chancery Court approved Skadden overbilling fees of $2 million and allowed the court-appointed custodian to charge over $3 million in services.

In response to the continued overbilling, Citizens for Judicial Fairness released the following statement: “The habitual conniving of Skadden Arps and the Chancery Court disregards everyday people and subsidizes extravagant legal elites. The long-standing corrupt relationship between Skadden Arps and the Chancery Court lays siege to the concept that Delaware’s courts are anything but self-serving and corrupt. We will continue exposing this corruption at every turn.”

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