An exasperated bankruptcy judge slapped a $104,000 fine on Deloitte & Touche this week for repeatedly ignoring his order to turn over certain documents related to the Bonneville Pacific scandal.
U.S. Bankruptcy Judge John H. Allen imposed the fine on the company because it ignored a series of orders - dating as far back as October - to turn over documents relevant to Bonneville Pacific.Of the $104,000, $94,000 will go to Bonneville Pacific trustee Roger Segal to reimburse him for his legals costs in fighting to get the documents. The remaining $10,000 is a penalty for ignoring Allen's order.
Allen said in April that he would impose a $10,000 sanction on Deloitte & Touche. Allen entered a formal order to that effect this week but included the $94,000.
"We believe there is no basis for the order, and it is our intent to appeal it," said Richard Casey, attorney for Deloitte & Touche.
The firm plans to appeal immediately, he said. They have to. Allen ruled that Deloitte & Touche must pay the $104,000 by Aug. 30 or the amount doubles.
The firm's penalties could go even higher. Allen will hold a hearing Wednesday to hear Segal's request that a second, equally hefty sanction be imposed on the accounting firm. This request for penalties again relates to documents Segal says Deloitte & Touche was ordered to give him.
"They don't like the case against them, and they are fighting us at every turn," said Vernon Hopkinson, attorney for Bonneville Pacific.
Deloitte & Touche is considered the largest moving target in the hunt to pin blame for the scandal. Turning over the documents is like a deer being ordered to provide ammunition to a hunter, Deloitte & Touche attorneys have argued.
But the accounting firm's arguments have fallen on deaf ears both in bankruptcy court and U.S. District Court. U.S. District Judge Bruce Jenkins this week ordered Deloitte & Touche to "immediately" turn over company documents to yet another adversary: Portland General.
Portland General is suing Deloitte & Touche for more than $70 million it says it lost in its brief merger with Bonneville Pacific. Both Segal and Portland General believe Deloitte & Touche accountants helped Bonneville Pacific insiders craft a misleading financial picture.