JPMorgan Chase & Co isn’t on the hook for all of Charlie Javice’s legal fees as the fight between the founder of financial aid site Frank and one of the world’s biggest banks continues.
Judge Kathaleen St. Jude McCormick said Wednesday that JPMorgan Chase doesn’t have to pay for the fees associated with six counterclaims filed by Charlie Javice, according to a Feb. 14 ruling. McCormick had previously ruled in May that the bank was legally obligated to cover Javice’s legal bills associated with her defense in its fraud suit against her. On Wednesday, McCormick said Javice cannot use that ruling to also “shoehorn” a claim for payment of fees for the counterclaims, according to the ruling.
Javice is the 30-something founder who sold her fintech startup Frank to JPMorgan Chase in September 2021 for $175 million. That month, she joined the bank as a managing director, head of student solutions, but was placed on administrative leave in September 2022, and was fired the following November, according to JPMorgan Chase and Javice legal documents. In December 2022, Javice sued the bank in Delaware Chancery Court, claiming JPMorgan Chase terminated her employment at Frank without cause and should be required to pay her legal fees, costs, and expenses, according to her claim against the bank. Just days later, JPMorgan Chase sued Javice in Delaware District Court, alleging the entrepreneur lied about the number of customers Frank had when the bank acquired the company.
Javice faces a criminal complaint from the U.S. Department of Justice, while the SEC has also filed charges against her. The criminal trial is set to start in October.
But in the Delaware Chancery Court, McCormick said Javice didn’t seek legal fees upfront for the counterclaims she made in her December 2022 complaint, so she didn’t rule on it in May.
McCormick also denied Javice’s claim to have JPMorgan Chase pay for expenses she incurred while trying to get insurance coverage, noting that Javice hadn’t sought these fees upfront. Again, the Frank founder could amend her complaint to add a claim for entitlement.
Javice, however, did win on her claim to get JPMorgan Chase to pay bills they had rejected. In October, Javice claimed that JPMorgan Chase had improperly rejected $830,000 in bills from her lawyers, amounting to 20% of legal costs at that time, Bloomberg reported. Javice had asked the court to force JPMorgan Chase to pay the bills. McCormick noted that it wasn’t the proper time for a “detailed analytical review.” Lawyers had certified that the fees incurred were actually incurred and that they were reasonable, McCormick said.
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