Kasowitz Billionaire Client Gets Legal Files Back at a Price

In a tug-of-war stemming from nearly $1 million in unpaid legal bills, a New York state judge said Canadian billionaire Alex Shnaider was entitled to his legal files but that he had to deposit the overdue amount in an escrow account.

Boies Schiller Flexner placed a lien on Shnaider after the industrialist declined to pay a year’s worth of invoices for legal work done on a dispute with a former business partner in a jet reselling business.

When Shnaider refused to pay, Boies Schiller received judicial permission to end its representation, and Shnaider’s new law firm, Kasowitz Benson Torres, sought the files to prepare for his upcoming trial involving the jet partnership dispute.

New York State judge Debra A. James handed down an order Monday, agreeing that Shnaider should receive a complete copy of his client file.

Shnaider is set to go to federal court trial in early December. James said the amount of fees could be hashed out later but ordered Shnaider, in the meantime, to post a bond of $860,000, slightly less than the current total of $870,000.

There was no explanation why James set the lesser amount, but Shnaider was not a U.S. resident and did not recognize U.S. court jurisdiction so there was no sure way for Boies Schiller to collect what he owed.

The firm had pointed to New York rules that require a client to pay attorney’s bills or provide security for any unpaid fees.

Kasowitz lawyer Michael Beck did not respond to a request for comment. He represented Shnaider in his effort to reclaim his legal files and proceed with the trial. Unless a compromise is reached, there will be another court date in April to further examine the fees issue.

“We are happy with this result,” said Boies Schiller lawyer Karen Chesley, who appeared to argue the firm’s position before Judge James. “It allows our former client to litigate his case while protecting our ability to recover fees for our last year of work on his behalf.”