Just to clarify the record: I mentioned yesterday that lawyers in the case seeking state possession of perhaps $160 million in unclaimed U.S. savings bonds
were working on a contingency fee deal that would pay them 25 percent of the proceeds if the state eventually lays claim to bonds not now in its possession.
A Democrat-Gazette article this morning put the fee at 10 percent. Both are correct after a fashion, but the 25 percent is the most important figure.
Here's the engagement letter between the state and one of the law firms.
In short, the letter says Cooper and Kirk of Washington and Kessler, Topaz, Meltzer and Check will get a 10 percent fee on any of the bonds already in the auditor's possession if a court orders they have reverted to state title, not simply custody. A 2015 law now allows the state to claim not just custody but ownership if unclaimed property and to cash in bonds if owners don't claim them two years after they've been declared unclaimed. Auditor Andrea Lea
told me that's about $300,000 worth of bonds, or a potential $30,000 fee.
But the lawsuit is really about the $17 billion in unclaimed matured bonds being held by the federal Treasury, an estimated $160 million of which were purchased by people with Arkansas addresses. Says the agreement:
In the event of a monetary settlement or award received relating to bonds escheated to the state pursuant to Ark. Code Ann. 18-28-231 or as a result of litigation in the court of federal claims, counsel will be paid 25 percent of the amount of any compensation paid to the state.
The lawyers get nothing without a win. They stand a pretty good chance of picking up $30,000 or so. But the big money could take years. Lea has said she's begun the expected process of being denied a list of bondholders by the Treasury. Then she will go to the court of claims. Down that road lies a potential $40 million lawyer payday.