Judge Questions Michael Cohen's Bid for Indemnification From Trump Org
More than $1 million of the $1.9 million in legal fees Cohen is seeking to have the Trump Organization pay is owed to McDermott Will & Emery.
August 06, 2019 at 06:11 PM
4 minute read
Lawyers for President Donald Trump’s former lawyer Michael Cohen took tough questions from a New York judge in their effort to make the Trump Organization pay for Cohen’s $3.8 million in legal fees, back taxes and criminal penalties.
After oral arguments Tuesday, Manhattan Supreme Court Justice Joel Cohen didn’t rule or indicate that he had his mind made up between Cohen’s version of events and the one advanced by the president’s real estate company. He pondered aloud whether Trump’s company could be made to pay for certain costs.
The judge’s questioning did prompt W. Hunter Winstead, Cohen’s lawyer and a partner at Gilbert, to back off a position taken in Cohen’s complaint that the Trump Organization is on the hook for certain amounts that Cohen was ordered to pay as part of his criminal sentence. At least the $1.3 million in back taxes Cohen was made to pay is “not appropriate for reimbursement,” Winstead said. Other amounts he said he would have to parse more closely.
That leaves about $1.9 million in legal fees and perhaps another $600,000 related to his criminal case that Cohen could still be seeking from the Trump Organization. More than $1 million of the $1.9 million in legal fees is owed to McDermott Will & Emery. The remainder is owed to firms including Petrillo Klein & Boxer, Blakely Law Group, Lanny Davis’ law firm Davis Goldberg & Galper and Monico & Spevack.
Cohen filed his suit in March, alleging an indemnification agreement required the Trump Organization to reimburse him for the expenses. He was an executive at the organization until early 2017.
Most of Tuesday’s hearing was focused on the nature of the Trump Organization’s alleged commitment to cover Cohen’s legal bills. In an affidavit, Cohen said Alan Garten, the real estate company’s general counsel, made an oral agreement in July 2017 to cover his legal bills.
The scope of any such deal, which Cohen’s lawyer Steve Ryan of McDermott mentioned in a letter to Garten that sought payment, was fiercely debated at Tuesday’s hearing.
Marc Mukasey of Mukasey Frenchman & Sklaroff, who represents the Trump Organization, said it was simply not plausible that Garten had pledged to cover every dime of Cohen’s legal bills for the indefinite future. He said a more reasonable reading of Ryan’s letter was that it applied to a single congressional investigation that was alluded to.
Winstead said his client’s records showed that was not the case, however. The Trump Organization paid for more than $1 million of Cohen’s legal bills that clearly went beyond a single congressional probe, he said, and further discovery would make that even clearer.
Justice Cohen’s questions highlighted that the open-ended nature of the alleged commitment made by the Trump Organization, and he explored whether Trump’s company could be made to pay for costs related to some of Cohen’s legal troubles, but not others. While the statute of frauds requires long-term commitments be put to writing, the judge raised the prospect that the Trump Organization had agreed to pay the costs for investigations that existed at the time, if not for the dozen-ish that eventually arose.
“As a general rule, if part of an entire contract is void under the statute of frauds, the whole contract is void,” he said later, putting a question to Mukasey. “However, where an oral agreement is severable, meaning susceptible to division and apportionment … that part which, if standing alone, is not required to be in writing, may be enforced.”
Mukasey said he didn’t think that’s what Cohen had argued in his complaint.
The judge didn’t indicate when he would rule on the Trump Organization’s motion to dismiss.
Cohen was sentenced to three years in prison after pleading guilty to tax evasion, campaign-finance violations and lying to Congress. He is currently incarcerated at Otisville Federal Correctional Institution, with a release date of Dec. 13, 2021, according to records from the Bureau of Prisons.
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