JPMorgan Chase & Co. lost its bid to halt payment of legal fees for Charlie Javice, the founder of Frank who was convicted of defrauding the bank. A Delaware judge denied JPMorgan's emergency motion, meaning the bank must continue to cover the defense costs for Javice and her co-defendant Olivier Amar. The combined legal bills for Javice and Amar have already surpassed $115 million, an amount roughly two-thirds of the $175 million JPMorgan paid to acquire Frank.
The bank has described these costs as "off the charts" and a "clear abuse" of a previous court order requiring them to pay. JPMorgan highlighted egregious expenses, such as over $5 million billed by lawyers and staff for simply attending the trial, even on days court was not in session. Other questionable charges included $530 for gummy bears, more than $3,000 for first-class airline tickets, a $581 dinner featuring a $161 seafood tower, and $25,800 on hotel upgrades. JPMorgan also noted a $284 car ride for a mere half-mile and bills for copious amounts of alcohol and personal care items like cellulite butter.
Despite these objections, Magistrate in Chancery Christian Douglas Wright is scrutinizing the necessity of these expenses, particularly questioning the number of timekeepers needed for the trial. Javice was sentenced to seven years in prison after being convicted of defrauding JPMorgan by faking user data to mislead the bank into buying her student-finance startup. The court's initial order to cover legal fees stemmed from Javice and Amar becoming bank executives after the acquisition deal.
JPMorgan is appealing the ruling that keeps them responsible for these fees. The bank alleged that Javice and Amar treated the court-ordered fee arrangement as a "blank check." The financial institution also pointed out that attorneys themselves billed for various luxury items and personal expenses, further fueling their argument that the billing practices were excessive and lacked a reasonable connection to the legal defense.
