Gainey COO will have to detail work

GRAND RAPIDS, Mich. (WOOD) - Newly-appointed Gainey Corp. Chief Operating Officer Carl Oosterhouse will have to provide a half-hour by half-hour record of what he does for the corporation, a federal bankruptcy judge ruled Tuesday.

The ruling comes after the state's Attorney Discipline Board refused to overturn Oosterhouse's disbarment.

Oosterhouse was disbarred after stealing tens of thousands of dollars from the law firm that employed him as well as his then-client and current employer, Gainey Corp.

He argued that based on "physical or mental disability," he should have been placed on probation instead. An attorney representing Oosterhouse argued that his client suffered from "depression, attention deficit disorder, sleep apnea and personality disorders with schizoid, depressive and avoidant features."

A hearing panel concluded Oosterhouse didn't meet the standards required to be placed on probation and disbarred him. Friday's board ruling affirmed that.

While ordering record-keeping of Oosterhouse's duties Tuesday, Judge James Gregg delayed a ruling on Wachovia Bank's objections to a proposed $600,000-plus salary for Oosterhouse until after a major hearing in the case scheduled for January.

His day-to-day work for Gainey Corp. is likely to figure into that salary determination. Harvey Gainey said last Monday that Oosterhouse advises him on how to run the corporation efficiently as well as how to move forward under bankruptcy protection.

Oosterhouse had served as a lawyer for the corporation for more than 20 years ending in 2006. He returned to do legal work from the spring of 2008 until July 31, Gainey said last Monday.

Gregg said last week that payments made to Oosterhouse after his legal work but before he took the COO post appear "highly suspicious." The judge said there could be a reasonable explanation for them. Oosterhouse was paid more than $200,000 in four separate payments between late August and mid-October as an adviser to the corporation.

In court Tuesday, Gregg also delayed a ruling on how much Gainey himself will be paid, although the judge has said Gainey's salary appears to be a less complicated matter.

The January hearing will address the major issue in the Gainey Corp. bankruptcy protection case: Can the corporation continue to use the cash it has to run day-to-day operations? A group of lenders headed by Wachovia Bank, which sued Gainey in early October saying they are owed $230 million, could contest the corporation's ability to use that cash.

The judge said the January hearing should also shed light on how Gainey Corp. has been performing financially since filing for Chapter 11 bankruptcy protection in late October. That performance could be used to determine how Gainey and Oosterhouse will be compensated.