Posted by Todd Zywicki:
Lehman Professional Fees May Reach $1.4 Billion:
http://volokh.com/archives/archive_2008_10_19-2008_10_25.shtml#1224805628
According to [1]this story:
Fees could reach a record $1.4 billion for lawyers, accountants and
other professionals working on the Lehman Brothers Holdings Inc.
bankruptcy, the largest in U.S. history.
The biggest winner will be New York-based law firm Weil, Gotshal &
Manges, Lehman's adviser, with an estimated $209 million in fees,
said Lynn LoPucki, who teaches bankruptcy law at Harvard University
in Cambridge, Massachusetts. His projections are based on fees paid
for other large bankruptcies, including the most expensive to date,
Enron Corp.
Lehman, with debt of about $613 billion, will need a bankruptcy
judge's approval for about $906 million in charges for professional
services, LoPucki said. By comparison, court- approved expenses for
the bankruptcy of Enron, the world's largest energy trader until
its 2001 collapse, totaled $757 million, of which $149.4 million
went to Weil.
``We're breaking new ground in the size of the fees,'' LoPucki said
in an interview yesterday. ``Lehman is such a large case that there
is a lot of money there. It's like the guy who robbed the banks
because that's where the money was.''
LoPucki said the debtor will pay an additional $524 million of
fees, most of which don't need prior court approval. These include
fees to secured lenders and claims agents, as well as auditing fees
unrelated to the restructuring.
Law firm Milbank, Tweed, Hadley & McCloy, also based in New York,
could make as much as $58 million in its role advising the
creditors' committee in the case, said LoPucki, who calculated the
fees with Joseph Doherty, the director of the Empirical Research
Group at the University of California, Los Angeles, law school,
where LoPucki also teaches.
It breaks out this way:
Lehman asked Oct. 8 for court approval to pay Weil, led by
bankruptcy partner Harvey Miller, $650 to $950 an hour for partners
and counsel; $355 to $595 for associates; and $155 to $295 for
paraprofessionals.
Milbank, as adviser to the creditors' committee, has requested $700
to $950 per hour for partners; $650 to $850 for of counsel; $275 to
$670 for associates and senior attorneys; and $155 to $325 for
legal assistants, according to court papers filed on Tuesday.
Quinn Emanuel Urquhart Oliver & Hedges, the law firm acting as
special counsel to the creditors' committee, asked for $660 to $950
an hour for partners, $380 to $950 for other lawyers and $250 to
$280 for professional staff.
Houlihan Lokey, as investment banker to the creditors' committee,
requested $500,000 per month for the first six months and $400,000
for each month after. Houlihan also asked for deferred fees of 0.05
percent of the first $30 billion of unsecured recoveries and 0.035
percent of all unsecured recoveries in excess of $30 billion,
according to the filings.
References
1. http://www.bloomberg.com/apps/news?pid=20601103&sid=aPjNPQejqC3I&refer=us
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