The saga of Minnesota businessman Tom Petters played out in separate St. Paul courtrooms Thursday, with a federal district court judge telling Petters' criminal defense attorneys they can't quit, even though they haven't been paid yet for any work they've done this year, and a federal bankruptcy judge reopening the auction for Petters' Polaroid Corp. -- again.
U.S. District Court Judge Richard Kyle expressed little sympathy for the financial pinch affecting Petters' lawyers, Jon Hopeman and Paul Engh. The pair said that because they haven't been paid, they've had to cut back on investigators, associate attorneys and expert witnesses as they prepare for Petters' trial, now expected to begin this summer.
"Once you're in there you don't get out without approval from the court," Kyle said. "The fact that you're not paid is not a reason to say you're walking."
Though he hasn't ruled yet, Kyle suggested Petters' attorneys would have to tough it out. If he had to appoint new counsel, Kyle noted, trial preparation would begin anew, delaying the case as Petters remains in federal custody.
"You're obligated to represent your client," Kyle said.
Petters, 51, of Wayzata, has been in the Sherburne County jail since his arrest in October on charges of fraud, money laundering and conspiracy.
Hopeman and Engh had appealed to Kyle after a magistrate judge rejected their efforts to get federal prosecutors to guarantee they wouldn't go after their fees for restitution to victims if Petters is found guilty of running a $3.5 billion Ponzi scheme.
Engh said defense attorneys are facing a potential "financial disaster." In earlier motions, Petters' attorneys have said his defense could cost as much as $5 million. Federal prosecutors have argued that Petters must use personal assets to pay such costs and couldn't dip into assets from codefendants or his corporate entities, most of which are in bankruptcy.
