ALLEN H. BRILL, being duly sworn, deposes and says:

     1.     I am an attorney duly admitted to practice before the Courts of the State of New York as well as before the U.S. District Courts in the Southern and Eastern Districts of New York and the United States Court of Appeals for the Second Circuit.

     2.     I have been retained by 350 Bleecker Street Apartment Corporation ("Co-op" or "Defendant") as an expert in the area of cooperative and condominium law and, specifically, with respect to the application of Bleecker Charles Company ("Sponsor" or "Plaintiff") for an award of attorneys' fees, costs and expenses pursuant to the Condominium and Cooperative Conversion Protection and Abuse Relief Act (the "Abuse Act") 15 U.S.C. § 3611(d).

     3.     I am a graduate of Columbia College (BA 1968), Columbia Law School (LLB 1968), and Columbia Business School (MBA 1969). I have been engaged in the private practice of law since 1970. After working as an associate at the Marshall Bratter law firm from 1970 through 1977 and then at O'Sullivan Walff Karabell &_ Grave from 1977 through 1979, I founded my own firm, Brill &_ Meisel, in 1979. I have been the partner in charge of the firm's litigation practice since its inception.

     4.     I have extensive experience in all areas of commercial litigation, and a particular expertise in real estate and real-estate-related litigation with a concentration in the area of cooperatives and condominiums. Our firm is special cooperative and condominium counsel to two major banks in New York City and a major law firm. I have been a member of the New York State Bar Association's committee on leasing since 1992. I am a regular contributor to the "Q & A" Real Estate Column written by Jay Romano, which appears in the Sunday New York Times real estate section. I am also listed in Global Counsel 3000, 2001/2 Edition, published in conjunction with PricewaterhouseCoopers, as a "highly recommended" attorney in the area of real estate.

     5.     Our firm consists of three partners including myself, each of whom specializes in real estate, three associates, two paralegals and one of counsel attorney. Throughout its history, Brill & Meisel has represented many sponsors, cooperative corporations and condominium associations before, during and after conversion. Brill &- Meisel currently represents over 100 cooperatives and condominiums in New York City on a regular basis and is listed in the monthly publication, The Cooperator, as one of the largest firms in New York in this area of law. A list of New York's largest cooperative and condominium law firms and the billing rates charged by partners and associates in these firms is published annually by The Cooperator. The June 2001 listing is annexed hereto as Exhibit A.

     6.     I have acted as counsel in real-estate-related litigation on behalf of sponsors, cooperative corporations, and condominium associations and am familiar with the billing rates charged by partners and associates at both large and small firms which specialize in real estate litigation. I have made numerous applications and/or opposed applications for legal fees in this Court, in the Supreme Court of the State of New York and in the Civil Court of the City of New York.

     7.     Most significantly, I am counsel to Darnet Realty Associates, LLC, and its predecessor, Darnet Realty Associates (collectively "Darnet"), and I was the lead attorney on behalf of Darnet, in Darnet Realty Associates, LLC, as successor in interest to Darnet Realty Associates, and Darnet Realty Associates v. 136 East 56th Street Owners, Inc., U.S.D.C., Southern District, 96 Civ. 5825 (LBS) ("Action 1"), 136 East 56th Street Owners, Inc. v. Darnet Realty Associates, Darnet Realty Associates, LLC, and City and Suburban Federal Savings Bank, U.S.D.C., Southern District, 96 Civ. 5889 (LBS) ("Action 2"), 136 East 56th Street Owners, Inc. v. Darnet Realty Associates and Darnet Realty Associates, LLC, U.S.D.C., Southern District, 98 Civ. 5864 (LBS) ("Action 3"), and Darnet Realty Associates, LLC, as successor in interest to Dar-net Realty Associates, and Darnet Realty Associates v. 136 East 56th Street Owners, Inc., U.S.D.C., Southern District, 98 Civ. 6011 (LBS) ("Action 4"). These four cases, litigated from 1996 through 2000, dealt exclusively with the Abuse Act. On behalf of Darnet, I prepared and/or opposed attorney fee applications both as the prevailing party and as the non-prevailing party under 15 U. S.C. § 3611. I am therefore familiar with the criteria that must be met before a party is entitled to an award of attorneys' fees under 15 U. S.C. § 3611 (d).

     8.     In addition to analyzing the substance of the fee application submitted on behalf of the Sponsor, I reviewed, among other things, the exhibits annexed thereto, this Court's October 3, 2001 Opinion, the Declaration of Dale A. Schreiber and his partner and client, and the affidavits, memoranda and other relevant documents submitted to this Court in connection with the summary judgment motion and the instant application. My review finds the following:

(i) Sponsor has submitted a fee application as the prevailing Plaintiff which may be entitled to recover reasonable attorneys' fees and other costs incurred under 15 U.S. C. § 3611 (d);

(ii) Any award of attorneys' fees and other costs under 15 U.S.C. § 3611 (d) is made at the discretion of the Court;

(iii) The instant action presented only two, well-defined and narrow issues for this Court to consider;

(iv) A majority of the time expended by Sponsor's attorneys and other professionals that is included in the instant fee application pertains to issues and matters outside the scope of issues under this Court's review;

(v) A substantial amount of the work performed by Sponsor's attorneys and other professionals was not necessarily incurred in connection with this action, did not contribute to, or cause, the outcome herein and is, therefore, irrelevant to the instant action;

(vi) Consequently, a substantial portion of the fees and costs incurred by Sponsor's attorneys and other professionals must be excluded from any consideration of an award of reasonable attorneys's fees and costs made to Plaintiff;

(vii) The hourly rates charged by Sponsor's attorneys are excessively high and unreasonable given the hourly rates customarily charged for similar litigation by attorneys of the same skill in this area; and

(viii) The amount of hours billed by Sponsor's attorneys is excessively high and unreasonable given their alleged experience and the limited nature and simplicity of the issues involved.

I.     PLAINTIFF'S MOTION FOR ATTORNEYS' FEES

     9.     For the reasons stated below, Sponsor's application for attorneys' fees and disbursements in the total amount of $338,097.43 is clearly excessive, unreasonable and nonrecompensable given that a large portion of the work for which Sponsor's attorneys, Proskauer Rose LLP ("Proskauer"), seek recovery is outside the scope of the instant action. Additionally, such fees and disbursements are unreasonable and cannot be justified given the limited scope of work necessary for Plaintiff to prevail before this Court on narrow, well-defined issues. (See Exhibit B for a schedule of Plaintiff's fees by category.)

Nonrecompensable Fees and Disbursements

     10.     Given the clearly prescribed scope of the instant action, the summary judgment motions and the Court's purview, several categories of fees and disbursements allegedly incurred by Proskauer and its consultant, Hayes & Company, can be readily disqualified. Any and all fees and disbursements incurred prior to the July 19, 2000 Notice of Termination ("2000 Notice") as documented in Proskauer's bills dated September 23, 1999, covering the period from June 14, 1999 through July 31, 1999, and July 14, 2000, covering the period from June 1, 2000 through June 30, 2000, in the amounts of $25,761.54 and $15,576.67 respectively, are irrelevant to the instant action. Such work, neither performed in connection with the 2000 Notice nor necessary to the successful prosecution of this action, is thus ineligible for recovery. (See the Declaration of Dale A. Schreiber, executed on November 21, 2001 (the "Schreiber Declaration"), pages 4-5, paragraphs 9-11.)

     11.     Fees and disbursements incurred by Proskauer for work performed in connection with the "violations by garage operation [sic]" and the maintenance of the building's sidewalks, as noted in its September 19, 2001 bill in the amount of $3,738.84, do not bear upon the issues of this suit or of the Abuse Act and are similarly not compensable. (See the Schreiber Declaration, page 12, paragraph 34.)

     12.     One of the largest areas of work for which Proskauer seeks recovery is that of "Sponsor's settlement attempts". Fees and disbursements in this category not only include a total of $48,576.41 allegedly incurred by Proskauer, but also $6,418.75 charged by Hayes & Company, an accounting firm retained by Proskauer "to advise the Sponsor regarding its settlement proposals." For all of Hayes & Company's "accounting expertise on complex real estate transactions," Proskauer still felt the need to perform "additional research and analysis regarding potential settlement terms." (See the Schreiber Declaration, pages 11-12, paragraphs 31-33.

     13.     What is truly disturbing and unconscionable about this category of charges are two facts. One, that of the $48,576.41 figure, fully $15,376.25 in fees were incurred in connection with an issue of transfer tax, which issue was never in dispute between the parties nor ever presented to this Court. The transfer tax issue, the research and discussions thereon, as detailed in Proskauer's bills dated November 15, 2000, December 11, 2000 and January 12, 2001, are completely irrelevant to any issue before the Court and must be dismissed. Second, of the remainder, it is indisputable that NO time was spent by Proskauer on any legitimate or meaningful settlement negotiations or discussions with the Co-op or its attorneys. In fact, aside from the Stipulation of Undisputed Facts, hardly any time at all was spent by any one at Proskauer in any kind of discussion or communication with the Co-op. Additionally, and most significantly, Proskauer's work on any alleged "settlement proposals" was not connected to the issue in dispute.

     14.     Almost all of the time billed on "Sponsor's settlement attempts," as detailed in Proskauer's bills dated April 17, 2000, May 17, 2000, June 9, 2000, September 12, 2000, October 6, 2000, November 15, 2000, December 11, 2000, January 12, 2001, September 19, 2001 and October 6, 2001, covers internal discussions, between and among Proskauer' attorneys, or communication with Proskauer's client, the Sponsor. Indeed, as stated in the accompanying affidavit of Robert N. Fass, Esq., Co-op's counsel, there was only one written settlement proposal from the Sponsor to the Co-op and only one short meeting between the principals of each. Their respective attorneys did not attend that meeting nor engage in any other settlement discussions.

     15.     In fact, a review of the above-mentioned bills reveals that, from October 29, 1999 through September 30, 2001, there was at most a total of three and a half hours spent on eight telephone calls and one conference call with the Co-op's attorney (Robert Fass) that can reasonably be construed to be settlement-related. (See entries for October 2, 4, 10, 20, 26 and 30, 2000; November 8 and 17, 2000; and September 6, 2001.) The overwhelming majority of time spent by Proskauer's attorneys on the "settlement" category of work was for: (i) discussions with their client; (ii) internal meetings, between and among Proskauer attorneys; (iii) research on the transfer tax issue; and (iv) preparing, reviewing and revising numerous drafts of proposal letters, settlement terms, standstill agreement and memoranda. Proskauer's own documents prove the absence of a connection between the instant litigation and any "settlement negotiations" between the parties. None of this can be said to have contributed to Plaintiffs success in this action. As such, the entire $54,995.16 in Proskauer's and Hayes & Company's fees and disbursements is ineligible for recovery.

     16.     Lastly, Proskauer has billed its client $9,865.91 for computerized research (Lexis and Westlaw) for the period from July 1, 2000 through November 15, 2001. (See Exhibit C annexed hereto and made a part hereof.) It is well settled that such research is not separately compensable, but rather considered to be part of a law firm's generalized overhead costs which have already been factored into attorneys' hourly rates. This issue is addressed in the accompanying Memorandum of Law.

     17.     The above amounts, without the charges for Lexis research, total $100,072.21 in fees and disbursements, which must be excluded in whole because such fees represent work that was clearly irrelevant and demonstrably unnecessary to Plaintiff's success in the litigation herein and are legally unwarranted by the Abuse Act. (See Exhibit D annexed hereto and made a part hereof.)

The Limited Nature of the Instant Action

     18.     The instant action was commenced on October 13, 2000 when Plaintiff filed its Complaint seeking a declaratory judgment that Defendant's attempted termination of a master commercial lease and the garage portion thereof under the Abuse Act came too late and was therefore void and unenforceable. The termination underlying Plaintiff's Complaint was duly approved at a shareholders' meeting held on June 27, 2000 and noticed in a Notice of Termination dated July 19, 2000, served upon Sponsor.

     19.     After the pleadings and the case management order were concluded, the parties jointly prepared a Stipulation of Undisputed Facts, which was used by Plaintiff when it moved for summary judgment on March 13, 2000. That motion, a cross-motion of Defendant and all issues relating to the 2000 Notice and the Abuse Act, were decided by this Court in its Opinion and Order dated October 3, 2001 ("October 3rd Order").

     20.     As the motion and cross-motion for summary judgment and their supporting memorandum set forth, and as this Court duly noted, there was only one issue for the Court to determine, i.e., when did the two-year window open for the Co-op, during which time termination could occur? And that issue itself was further narrowly defined, depending only upon a determination of the number of units in the development, and then finally, on the number of units owned by the developer.

October 3rd Order at pages 5 and 12.

     21.     In spite of the narrow specificity of the issues involved and the correspondingly limited amount of briefing required, Sponsor's attorneys allege that they incurred fees in the amount of $205,219.25 and disbursements in the amount of $10,222.08, totaling $215,441.33, from the analysis of the effect of the 2000 Notice to the final judgment and order. (See Exhibit E annexed hereto and made a part hereof.)

II.     DETERMINATION OF AWARD

     22.     As discussed in the accompanying Memorandum of Law, it falls to the trial Court to determine an appropriate fee award. The starting point for this determination is the calculation of the lodestar amount, which is found "by multiplying the number of hours reasonably expended by the hourly rate customarily charged for similar litigation by attorneys of the same skill in the area." When this lodestar fee methodology is used, the fees and disbursements requested by Proskauer are clearly shown to be unreasonable, excessive and unnecessary.

     23.     First, the hourly rates billed by the two partners in charge of this action, Dale A. Schreiber at $525.00 per hour and then at $560.00 per hour, and Bruce E. Fader at $600.00 per hour, are approximately 60% and 71% higher than the hourly rates charged by attorneys who specialize in the area of cooperative and condominium litigation in the New York City area. According to the June 2001 issue of The Cooperator and the chart therein entitled "New York's Largest Co-op & Condo Law Firms," the highest hourly rate charged by partners at two of the fourteen firms listed is $350.00. The highest hourly fee overall, $395.00, is charged by only one firm and yet, is only 65% of Mr. Fader's rate. Partners at the remaining eleven firms bill at the rate of $325.00 per hour or less. The hourly rates charged for Allison Feld (from $240.00 to $245.00 to $290.00), the associate who billed the most hours on this matter, are also substantially higher than the rates charged for associates at almost all of the firms listed. Only one firm's associates' fees are comparable; many of the others are $ 100.00 less per hour.

     24.     My hourly fees, as noted in The Cooperator were $325.00 for the calendar year 2000 and $350.00 beginning March 1, 2001. Our firm billed associates' time at rates between $175.00 to $195.00 in 2000, and between $150.00 to $210.00 as of March 1, 2001. In 2000, paralegals at Brill & Meisel were billed at rates between $75.00 to $95.00; as of March 1, 2000, those hourly rates were increased to $80.00 to $100.00. (See Exhibit F annexed hereto and made a part hereof.)

     25.     The hourly rates charged by Defendant's attorneys, Friedman, Krauss & Zlotolow ("Friedman Krauss") are in line with the hourly rates listed inThe Cooperator as well as with the rates my firm charges. According to the billing records of Friedman Krauss, the rates charged by the three partners involved in the instant action are as follows: Douglas P. Heller billed his time at $350.00 per hour, Robert N. Fass's time was initially billed at $325.00 and then $350.00 per hour, and Walter D. Goldsmith's time was billed at $275.00 and then also at $350.00. No associate worked on this matter. These rates, as well as mine and those of the firms listed in The Cooperator, are consistently and substantially lower than the rates charged by Proskauer. In light of this objective evidence, the rates charged by Proskauer's partners, associates and paralegals are all well in excess of the hourly rates customarily charged by attorneys of similar skill and experience in this area and can neither be justified nor, more importantly, used in calculating a lodestar fee amount.

     26.     The evidence set forth above does provide a basis for setting reasonable hourly rates for this litigation. An hourly rate for a partner of $325 in calendar year 2000 and of $350.00 in 2001, and an associate hourly rate of $195.00 in 2000 and $210 in 2001 meet the prescribed standard of "the hourly rate customarily charged for similar litigation by attorneys of the same skill in the area."

     27.     A premium hourly rate may be reasonable in those situations where attorneys have a distinctive expertise which is brought to bear on particularly complex and far-reaching issues. A premium hourly rate may be justified when an attorney's specialized knowledge and manner of working bring measurable efficiencies and/or expedite the handling of a matter. But not one of those situations applies here. In fact, it is rather more the opposite. Neither the partners nor associates had any particular expertise in cooperative and condominium law or litigation. The litigation itself was neither drawn out nor required a sophisticated strategy. Indeed, all aspects of this matter were straightforward. It is, therefore, shocking that so many hours were billed and so many people used to perform the same work and cover a limited issue.

     28.     According to the Declaration of Dale A. Schreiber, Proskauer billed a total of $215,441.33 in fees and disbursements for its work on the complaint, reply, the Stipulation of Undisputed Facts, the motion and cross-motion for summary judgment and the final order. A detailed review of the time spent and work performed on each of these items reveals excessive overstaffing, the same work performed by three different attorneys and work performed again and again.

     29.     For example, during a two-month period, from January 16, 2001 through March 14, 2001, Allison Feld spent approximately 128 hours in drafting, revising and editing Plaintiff's memorandum of law, a three-page notice of motion for summary judgment and two four-page affidavits in support. [1] This time, which does not include either legal or factual research, or preliminary conferences with Dale Schreiber, was spent mainly on the memorandum. Additionally, during this same period, Mr. Schreiber spent approximately 20.75 hours revising the brief and drafting a four-page affidavit for himself and a four-page affidavit for Kenneth B. Newman, Plaintiff's liquidating partner. In light of the presentation of undisputed facts in the memorandum, which was based on the Stipulation of Undisputed Facts for which time was billed separately and is not included in the above figures, and the limited issues covered in the memorandum, this amount of work is clearly excessive and unreasonable. Even so, it is not the most egregious example of duplicative and excessive work to be found in Proskauer's billings.

     30.     In late May of 2001, Dale Schreiber and Allison Feld began work on Plaintiff's memorandum of law in response to Defendant's cross-motion for summary judgment and its memorandum of law in support. They were joined in June by Bruce E. Fader, chair of Proskauer's litigation department, and completed their work by June 29, 2001. For the memorandum alone, excluding time spent on legal or factual research, or on any of the affidavits, Dale Schreiber billed approximately 68.5 hours, Allison Feld billed approximately 70.75 hours and Bruce Fader billed 18.25 hours. At their respective hourly billing rates, these three attorneys billed an incredible $69,687.50 for the memorandum of law alone. And, according to their daily time records, they were each performing the same work.

     31.     On May 25, 29, June 1, 4, 5, 6, 11, 12, 13, 14, 15, 19, 20 and 21, 2001, Dale Schreiber's billing entries note either "Revise reply brief" or "Review and revise reply brief." At the same time, on May 24, 25, 27, 28, 29, 30, June 1, 4, 5, 6, 8, 10, 11, 12, 13, 14, 15, 18, 20, 21, 22, 27, and 28, 2001, Allison Feld's time records indicate that she too was either reviewing and/or editing the reply brief. Lastly, Bruce Fader spends considerable time on June 10, 11, 12, 13, 14, 19, 20, 22, 26 and 28, 2001 also reviewing and revising the reply brief.

     32.     The issues addressed in Plaintiff's reply brief were neither so numerous, extraordinarily complicated or novel that they warranted the substantial devotion of time and attention provided here by the chair of Proskauer's litigation department and a senior partner and a third-year associate. Indeed, in the twenty years since it was enacted, there have been only a limited number of cases which have been brought under the Abuse Act. All of the leading cases were reviewed and discussed in the Darnet actions. According to Proskauer's time records, Darnet's briefs to the Second Circuit were obtained from their archives and reviewed by Proskauer's attorneys one year before. (See billing entries for June 21, June 27 and June 29, 2000, annexed as Exhibit 5 to the Schreiber Declaration.) It was, therefore, clearly not necessary for three skilled attorneys, billing at premium hourly rates, to then spend a total of 157.5 hours drafting, reviewing and editing the same material and doing so repeatedly.

     33.     Given these examples, as well as the other activities highlighted above, particularly the alleged settlement negotiations and the work performed on the transfer tax, where several attorneys worked on issues extraneous to the matter of this suit, there can be no question that Proskauer overstaffed the work and inefficiently used the time and skill of its attorneys. As noted in the accompanying Memorandum of Law, reductions in the amount of time for which a party seeks compensation are appropriate where a court finds that, as here, the legal fees sought were incurred through inefficient or duplicative work. Reductions are also appropriate where, as here, the amount of work does not conform closely to the novelty and difficulty of the questions raised.

Time Billed by Defendant's Attorneys, Friedman Krauss & Zlotolow

     34.     A comparison of the fees charged by Friedman Krauss, Proskauer's counterpart, is highly illuminative. A thorough presentation of the amount of time spent by Friedman Krauss is given in the accompanying affidavit of Robert N. Fass. In summary, the total amount of fees incurred by Friedman Krauss for all of their work on this matter is $106,789.00, fully one-third of the amount allegedly incurred by Proskauer. On each of the separate categories of work. Friedman Krauss incurred a fraction of the fees billed by Proskauer, For example, Friedman Krauss incurred $4,170.50 for its work on settlement negotiations; Proskauer $48,576.41. Friedman Krauss incurred only $12,178.25 for reviewing the complaint, researching the issues therein and preparing its answer and counterclaim. It incurred only $25,865.00 for work on its cross-motion and only $35,650.00 for opposing Plaintiff's motion and preparing its reply in connection with the cross-motion. And Friedman Krauss did not bill its client for computerized legal research.

Attorneys' Fees Billed and Awarded in Prior Abuse Act Cases

     35.     Two other highly-relevant examples of attorneys' fees and awards by this court in prior Abuse Act cases involve Darnet Realty Associates, LLC, which my firm represented, and 13 6 East 5 6th Street Owners, Inc., which was represented first by The Halperin Law Firm, LLP and then by Richards & O'Neil. The first of four actions between the parties under the Abuse Act was begun on or about August 2, 1996 when a complaint was filed by Darnet for injunctive and declaratory relief against 136 East 56th Street Owners, Inc. ("Owners") regarding a notice to terminate the commercial lease at 136 East 56th Street and a notice to terminate only the garage portion of the commercial lease. Action 1.

     36.     Prior to serving its answer, Owners commenced its own action for declaratory relief against Darnet concerning the same two notices. Action 2. Motions and cross-motions were subsequently brought in both actions and this court, in its opinion dated January 30, 1997, granted Owners' motion in part and denied it in part and granted Darnet's motion in part and denied it in part.

     37.     Thereafter, both parties moved for an award of attorneys' fees with each proclaiming itself the prevailing party. Darnet sought an award of $105,337.87 for attorneys' fees and disbursements and an additional $12,337.00 for the cost of an appraisal of the commercial space mandated by the court's opinion. Owners sought an award of $107,552.39 for attorneys' fees and disbursements, including a charge of $8,025.00 for its appraisal [2].

     38.     In their separate fee applications, both parties concurred that the litigation was strenuously fought, with many complex and novel legal issues presented for review. These issues included:

     39.     In addition to the numerous and complicated legal issues to be addressed and the extensive factual and legal briefing required thereon, this court also found that "[t]he suit has been conducted in an unusually acrimonious and at times wasteful manner . . .". The court concluded that "[t]aking all these factors into consideration, we believe that 'reasonable attorneys' fees' appropriately recoverable under the Abuse Act and 'fair, just and equitable' are approximately half the amount sought by Owners." No award was made to Darnet. (See this court's Opinion in Actions 1 and 2, dated October 20, 1997, annexed hereto as Exhibit G and made a part hereof, pages 2 and 7.)

     40.     On appeal, the Second Circuit reversed the granting of summary judgment in favor of Owners, granted Darnet's motion for summary judgment, vacated the District Court's award of attorneys' fees to Owners, determined that Darnet was now the prevailing party and remanded the case to the District Court for its determination as to whether Darnet was now entitled to legal fees. Once again, Darnet submitted a fee application: this time for a total of $214,629.89, composed of $119,718.14 in fees and disbursements incurred in the District Court (additional fees in the amount of $14,380.25 having been incurred subsequent to its first fee application); $12,337.50 representing the appraisal fee of an outside consultant; and $82,574.25 in fees and disbursements incurred in prosecuting the appeals before the Second Circuit.

     41.     Before this fee application was decided, Owners served a second series of termination notices upon Darnet. In one, Owners sought to terminate its commercial lease with Darnet; in the second, the notice terminated only the garage portion of the commercial lease. Once again, two separate lawsuits followed. In the first, Owners sought a declaratory judgment that the garage portion of the commercial lease constituted "property serving" the cooperative within the meaning of the Abuse Act, and that Owners had properly and timely terminated the commercial lease as to the garage portion thereof pursuant to the Abuse Act. See Action 3. The second suit, initiated by Darnet, sought injunctive and declaratory relief requesting judgment that the two-year window during which termination of the commercial lease could occur under the Abuse Act either (i) had expired several years before the notices, or (ii) had yet to commence. See Action 4.

     42.     Both parties once again moved for summary judgment and jointly prepared a Statement of Stipulated Facts for the court. In addition to incorporating the issues under review in Action 1 and Action 2, Actions 3 and 4 presented the court with a new issue: whether Unsold Shares retain their character as such after being sold to a subsequent investor unrelated to the original developer/sponsor? In its Memorandum and Order dated February 1, 1999, the District Court resolved this issue in favor of Owners and held that the notice terminating the garage portion of the commercial lease was valid. (This finding was affirmed by the Second Circuit.) The District Court further granted the parties permission to revise their fee applications and requested additional briefing thereon.

     43.     Owners requested an award of its attorneys' fees, appraisal costs and disbursements in the total amount of $101,300.38, consisting of the sum of $50,941.19 which the court had previously awarded in Actions 1 and 2, and $50,359.19, the amount of fees and disbursements incurred in prosecuting Action 3. Darnet requested recovery of $42,534.50 for its fees and disbursements incurred in the defense and prosecution of Actions 3 and 4, in addition to the $214,629.89 sought in Actions 1 and 2.

     44.     The court found that Owners, having prevailed in Action 3 based on much of the work performed in Actions 1 and 2, was entitled, as before, to one-half of the fees incurred in Actions 1 and 2 ($50,941.19) "less time spent on specific duties that cannot be said to have been utilized in the second set of actions." The fees were thus reduced to $48,489.94 and added to the fees incurred in the second set of actions ($50,359.19) to give Owners an award of $98,849.13. Similarly, the court held that Darnet had prevailed in Action 1 and was entitled to recovery of its attorneys' fees therein.

(See this court's Memorandum and Order in Darnet Actions 1, 2, 3 and 4, dated May 3, 1999, annexed hereto as Exhibit H and made a part hereof, pages 12-13 and 11.)

     45.     The court did not award Darnet any recovery for its work in Actions 3 and 4. It also limited its recovery for work performed on the Second Circuit appeals to only $6,242.50, finding that amount to reflect approximately "the amount of work Darnet performed, at the Court's request, on the argument on which Darnet actually prevailed."

     46.     The District Court's discussion of the appropriateness and the amount of attorneys' fees to which the prevailing party was entitled in each of the Darnet actions is highly-relevant and instructive. There is not only the similarity of subject matter - in fact, two of Plaintiff's issues herein, i.e., whether a parking garage is "property serving" the cooperative and how a successor developer is defined, were conclusively resolved in the Darnet cases - but the cases also provide an example of how to determine an award of attorneys' fees in a case under the Abuse Act.

     47.     Even though the Darnet cases covered numerous far-reaching, complex and novel issues, including opposing valuations of the commercial space and rent allocation thereunder, monthly court-mandated escrow payments and co-operative tax considerations, involved two appeals to the Second Circuit, and took four years, the District Court still found the fee applications of both parties excessive and unreasonable. While it did not disturb the attorneys' hourly billing rates, finding them reasonable, the District Court's award substantially reduced, by one-half, the fees incurred by both parties in Actions 1 and 2 and disallowed almost all of Darnet's fees incurred in its appeal, granting only $6,242,50 out of Darnet's request of $82,5 74.25. For four years work, Darnet received a total award of $66,101.50 in attorneys' fees and $12,337.50 in appraisal fees out of its fee application of $214,629.89. For its work over four years, Owners was granted recovery for $98,849.13.

     48.     Undisputedly, the work involved in the Darnet cases was several times that of the work herein. Yet, the fee applications of both parties in the Darnet cases were each much less than the application submitted by Proskauer. I have already noted that Proskauer's hourly rates are demonstrably excessive. The same is true of the amount of time spent by each of Proskauer's attorneys. Given this excessive amount, and after eliminating all work unrelated to the instant action, based upon the factors set forth above, the remainder time should be reduced in half and then multiplied by a factor of the hourly rates set forth in paragraph 26 above.

     49.     The hourly billing rates that we propose as reasonable and appropriate are, on average, 67% of the hourly billing rates that Proskauer uses. When this 67% is halved, to correspond to reducing the amount of time billed in half, a factor of 33.5% is found. When this factor is applied to the total fees that Proskauer incurred from July 1, 2000 through October 31, 2001 (for its work (a) analyzing the 2000 termination notice and Plaintiff's possible responses, (b) drafting the complaint, analyzing the answer and responding to the counterclaim, (c) preparing the Case Management Order, summary judgment motion, memorandum of law and Stipulation of Undisputed Facts, (d) reviewing the Co-op's cross-motion and memorandum of law, and (e) drafting Plaintiff's opposition memorandum, affidavits and the final judgment and order) a reasonable, fair and equitable amount of fees is ascertained. (See Exhibit I annexed hereto and made a part hereof.)

     50.     Proskauer has calculated that it incurred fees in the amount of $205,219.25 for the work enumerated in paragraph 48 above. (See Exhibit E.) Applying the factor of 33.5% to $205,219.25 equals $68,748.45, which we believe is a reasonable, fair and equitable amount for recovery.

     51.     Proskauer has also stated that it incurred $10,222.08 for disbursements in connection with this work. Since this amount includes charges for Lexis research, it must also be reduced. We have calculated the reduction as follow:

     52.     If this Court, in its discretion, chooses to make an award of attorneys' fees and disbursements to Proskauer, then the fair, reasonable and equitable amounts should be no greater than $68,748.45 for fees and $4,293.27 for disbursements, for a total of $73,041.72.

Proskauer's Application for Attorneys' Fees

     53.     Proskauer has also made application for recovery of the fees and disbursements it alleges it incurred in making this motion. It seeks a total of $33,437.57, consisting of $31,196.25 in fees and $2,241.32 in disbursements, as detailed in its bill dated November 14, 2001 and its statement dated November 15, 2001. Once again, this is clearly an excessive and unreasonable amount. It is, in fact, more than twice the amount Proskauer spent on preparing its complaint, analyzing its adversary's answer and responding thereto; it is three-fifths the amount incurred by Proskauer on its motion for summary judgement, its affidavits and memorandum in support and the Stipulation of Undisputed Facts. This motion is no more than a pro forma one, providing this court with one short, simple affidavit, two short, simple declarations and a memorandum which addresses neither complicated issues nor novel legal ground. More than $10,000 in fees was incurred by Bruce E. Fader alone. It is not comprehensible that this standard motion should require the highly-skilled, sophisticated intelligence and effort of the chair of Proskauer's litigation department at $600.00 per hour.

     54.     This court should also bear in mind that these charges cover only Proskauer's initial submission on this motion. If Proskauer is consistent, it will bill twice as much for its reply, as it did for its reply on the summary judgment motion. Proskauer will then have billed an extraordinary $100,000.00 on a motion for attorneys' fees in an action that took only one year, one motion and one cross-motion to resolve. This is very far from an example of reasonable, efficient work.

     55.     If this court chooses to reimburse Proskauer for its fees on the instant motion, then these fees and disbursements should be recalculated in accordance with the factors set forth in paragraphs 49 through 51 above. Applying the factor of 33.5% to the attorneys' fees of $31,196.25 produces $10,450.74; applying 58% to the disbursements charge of $2,241.32 equals $1,299.97, which amount must first be subtracted from $2,241.32 to yield a final disbursements charge of $941.35. The recalculation will produce a total sum of $11,392.09.

WHEREFORE, based on the foregoing, it is our recommendation that if, in the discretion of this court, attorneys' fees and disbursements are to be awarded to Proskauer, then such award, including fees for the instant motion, should not exceed a maximum of $84,433.81, consisting of $79,199.19 in fees and $5,234.62 in disbursements.

/s/Allen H. Brill
Allen H. Brill

Sworn to before this
31st day of January, 2002

/s/ Santa Medina
SANTA MEDINA
NOTARY PUBLIC State of New York
No. 01ME4921643 Qualified in Richmond County
Commission Expires February 28,2002

[1] Where a billing entry does not subtotal the time spent on different activities, an appropriate allocation was made.

[2] At that time, Allen H. Brill billed his time at $290 to $295 per hour. Ted Poretz, the partner at Richards & O'Neil in charge of this matter, billed his time at $300 per hour. Richards & O'Neil's fee application also included attorneys's fees incurred by The Halperin Law Firm, LLP, which preceded Richards & O'Neil as Owners' counsel.

A list of New York's largest co-op and condo law firms.

PLAINTIFF'S FEES AND DISBURSEMENTS BY CATEGORY
AS ENUMERATED IN THE DECLATION OF DALE A. SCHREIBER
PARAGRAPHS 9 - 36

PLAINTIFF'S DISBURSEMENTS AND LEXIS CHARGES

NON-REIMBURSEABLE FEES AND DISBURSEMENTS
(FROM THE DECLARATION OF DALE A. SCHREIBER AND EXHIBIT B)

PLAINTIFF'S LITIGATION FEES AND DISBURSEMENTS
(FROM THE DECLARATION OF DALE A. SCHREIBER AND EXHIBIT B)

Brill & Meisel
 
Current Billing Rates
As of January 1, 2000

Brill & Meisel
 
Current Billing Rates
As of January 1, 2001

Excerps from the Darnet case. To see the contents of this exhibit, please contact any board member for a copy.

DETERMINATION OF FACTOR FOR CALCULATING
REASONABLE AND APPROPRIATE ATTORNEYS' FEES

The percentage that the reasonable hourly rates enumerated in Paragraph 26 are of the hourly
rates charged by Proskauer Rose LLP:

1.   For partners, for the year 2000:

$325/$600 = 0.54

$325/$525 = 0.62

2.   For associates, for the year 2000:

$195/$240 = 0.81

$195/$245 = 0.62

3.   For partners, for the year 2001:

$350/$600 = 0.58

$350/$560 = 0.63

4.   For associates, for the year 2001:

$210/$290 = 0.72

Average percentage: 0.67

Average percentage divided by half (.5): 0.335

Return to Lawsuit Index