Today’s NYLJ reports a very large attorney fee arbitration award involving "Schulte Roth & Zabel  which has been awarded $1.7 million in legal fees as a result of a civil suit filed against private investment firm and former client The Belstar Group."

For the commercial details, see the NYLJ article.  Here, it seems that the arbitrators took a good look at the dispute, which ended up as a written retainer agreement v. hearsay and contradictory oral testimony.  Issue:  did the underlying transaction have to close before the law firm was due its fees?

Answer in this case: NO!  "Court papers filed in Manhattan Supreme Court last week show that Schulte entered into an alternative fee arrangement with Belstar’s CEO Daniel Yun, a former vice president at Lehman Brothers who founded the private investment firm in 1998. Belstar, which is based in New York and Seoul, manages more than $1.5 billion on behalf of financial institutions around the world.

The fee was tied to the firm’s work on something identified in court records as the "Lynt project," a structured finance transaction stemming from the Term Asset-Backed Securities Loan Facility. Schulte, known for its hedge funds and investment management work, assigned structured products and derivatives partner Joseph Suh in New York to draft an engagement letter with Belstar.

The company claimed in arbitration that its agreement with Schulte stated Belstar would owe the firm nothing if the transaction, potentially worth $62.5 million, did not close. However, Schulte was entitled to a percentage of the value of the deal if it did close. In the event of a dispute, both parties agreed to resolve their differences in arbitration.

The Lynt transaction never closed and Belstar did not pay Schulte for its work. But as detailed in court records, the three-member arbitration panel rejected Belstar’s argument that Schulte had been hired to handle the Lynt matter on contingency.

According to the panel’s interpretation of Belstar’s contract with Schulte, it found that the engagement letter contained "no language that would suggest that any aspect of the arrangement is contingent on future events."