Lennie The Liquidator Faces R500,000 Defamation Suit
Noseweek|September 2020
After losing his cool when his fees were questioned

WHEN VETERAN CAPE town insolvency practitioner Eileen Fey ventured to sug-gest to attorney Leonard Katz of law firm ENS that his bill of R422,871.57 to defend a matter in the Wynberg Magistrates Court seemed “extremely high” and would he please draft a bill for taxation*, Katz went ballistic.

“This request is outrageous. You have a full narrative. I am not taxing my bill,” was the furious and immediate response of South Africa’s most controversial insolvency lawyer, widely known as Lennie the Liquidator. Katz declared that Fey’s request for his bill to be taxed was “dishonest” and his firm would do no more work on the matter. “Furthermore, I will do whatever is necessary to ensure that you are removed as a trustee in this estate,” ran the attorney’s email. “You are dishonest and a disgrace to the profession.”

In his fury, Katz copied his “you are dishonest” email to eight prominent members of the insolvency world, including the Deputy Master of the Western Cape high court Irma Dick. And in a separate email to Cata Silile, the court’s Assistant Master, Katz wrote: “I am going to be lodging a formal complaint against Ms Fey. In my view, she is dishonest, does not act in the interests of creditors, and should be removed forthwith.” Katz copied this second email to the recipients of his first one, adding in an insolvency practitioner at KPMG.

While this flurry of emails took place on 5 April 2017. It is only now that they have come to light after Eileen Fey launched a belated and unreported R500,000 defamation action against Leonard Katz this March – just in time to beat the three-year prescription deadline. She claims that his statements about her were defamatory and false.

Taxation documents attached to Fey’s replying affidavit support the claim of excessive fee-charging by Katz.

They reveal that when Leonard Katz finally drafted and presented two ENS bills for the taxing master, and a further bill for non-litigious work to the Cape Law Society, a total of R290,520.59, or 41% of fees charged by ENS, was struck off.

Bills dealt with by the taxing master totaled R581,745.66, of which fees comprised R578,677. The taxing master “taxed off” or struck off R241,363.79 of those fees.

The bill to be adjudicated by the Cape Law Society [as it then was] totaled R131,646.50, of which R120,042 comprised fees. The Law Society struck R49,156.80 off those fees.

Which left Eileen Fey feeling justified in asking Katz to submit his bills for taxation.

The irony is that in his accusatory 5 April 2017 email to her, Katz’s final sentence was plaintive: “I charged less than 50 percent of my rate.”

Back then, Fey and another liquidator named Abie Moollajie were appointed joint provisional trustees of the insolvent estate of Mohamed Ismail Patel, a colourful Cape Town lawyer and liquidator who had been sequestrated. Patel had been accused of misappropriating R9.3m from the insolvent estate of the Coe Family Trust, of which he had been the trustee, and for stealing R8.7m from the estate’s bank account. He was struck off by the Cape Law Society for lying about a BProc qualification.

Eileen Fey, an insolvency practitioner for some 27 years, has been a director of Coopers and Lybrand Trust and Price Waterhouse Coopers Business Recovery and Insolvency.

She has been trustee/liquidator in hundreds of insolvent estates and has been appointed curator bonus for the Asset Forfeiture Unit. “I have in the process over many years built up a reputation as an insolvency practitioner of integrity,” she states in her founding affidvit.

As provisional trustees of Patel’s insolvent estate, the task of Fey and Moollajie was to track down and recover assets of Patel’s insolvent estate. To assist them, they retained the services of ENS’s Leonard Katz.

Leonard Katz is director, insolvency, business rescue and debt recovery at Edward Nathan Sonnenberg's (ENSafrica), self-proclaimed as “Africa’s largest law firm”. Acting for Absa, the only secured creditor of the Coe Family Trust, Katz had already had Patel removed as trustee of that trust. In his answering affidavit to Fey’s defamation claim, Katz states it had been established that Patel had stolen all the proceeds of realisation and there was nothing left in the Coe trust’s bank account. Absa, his client, required as much as possible to be recovered from Patel’s insolvent estate.

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