JPMorgan Chase & Co. is asking a court to terminate its obligation to pay the legal bills of Charlie Javice, the founder of the college financial aid startup Frank, whose fees have ballooned to over $115 million since she was convicted of defrauding the bank.
A clause in the original contract for JPMorgan’s ill-fated $175 million purchase of Frank has kept the bank liable for Javice’s legal fees.
Now, in a new court filing, the bank is arguing that the bills have become “patently excessive and egregious” and that it should no longer have to pay.
A contractual obligation turns into a ‘blank check’
Javice was convicted in March of conspiracy, wire, and bank fraud for tricking JPMorgan into acquiring her company by vastly inflating its number of users.
While she continues to appeal that guilty verdict, JPMorgan has been required to pay for her legal defence, an obligation that has now cost the bank upwards of $115 million for Javice and her co-defendant, Olivier Amar.
“The legal fees sought by Charlie Javice and Olivier Amar are patently excessive and egregious,” a JPMorgan spokesperson, Pablo Rodriguez, told Business Insider in a statement.
We look forward to sharing details of this abuse with the court in coming weeks.
A ‘shocking’ and ‘unprecedented’ legal bill
In its Friday filing, the bank’s lawyers stated that JPMorgan has already advanced $60.1 million to Javice alone for her criminal defense, an amount they described as “unprecedented and shocking” and one that has “exceeded any semblance of reasonableness.”
The bank further argued that Javice has “unreasonably” hired five different law firms for her defense, a move it claims is “necessarily overlapping, duplicative, and excessive.”
One of those firms alone has received advanced fees and expenses totaling $35.6 million, according to the filing.
The bank’s lawyers contend that Javice and her legal team have treated the advancement process like “a blank check to bill and expense whatever they please” and that JPMorgan will be “irreparably injured” unless the court puts a stop to the “abusive billing.”
Javice’s high-powered legal team includes the prominent attorney Alex Spiro of Quinn Emanuel, who has represented celebrity clients like Elon Musk and Kim Kardashian.
Business Insider has previously reported that Spiro now commands an hourly rate of $3,000 for his work. Lawyers representing Javice did not immediately respond to a request for comment.
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