Lehman Bankruptcy Fees Top $1 Billion
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By LIZ MOYER / WSJ Nov 22, 2010
More than two years after filing for bankruptcy, Lehman Brothers Holdings Inc. hit a milestone: $1 billion in fees.
Law firms, consultants and other advisers still unwinding the securities firm's operations and derivatives contracts were paid $40.6 million in October, bringing the total to $1.02 billion, according to a securities filing Monday.
At the top of the list is restructuring firm Alvarez & Marsal LLC, with $369.8 million in fees and expenses since September 2008, including $13.4 million last month.
Nearly 40 firms have collected "professional" fees from Lehman, including two law firms paid a combined $2.8 million since the filing to analyze and examine fees in the largest bankruptcy case in U.S. history.
Lead bankruptcy counsel Weil Gotshal & Manges LLP got paid $8.8 million in fees and expenses in October, increasing the firm's total to $245.8 million.
"This is clearly the most expensive bankruptcy case in history," said Lynn LoPucki, a law professor at University of California, Los Angeles. In comparison, the 2002 bankruptcy filing of Adelphia Communications Corp. led to $586 million in professional fees, according to BankruptcyProfessional.com.
Lehman creditors and its bankruptcy trustee have raised few objections to the river of fees. Most of Lehman's remaining work force is untangling positions in derivatives, loans, real estate, private equity and other assets.The company had more than 10,000 employees when it company collapsed; it will have 500 left in April, according to Alvarez & Marsal. The restructuring firm also is reducing the number of its Lehman-related employees.
"The strategy of managing and maximizing the value of assets rather than liquidating quickly at fire sale values—and of pursuing litigation when we believe the potential value warrants it—will yield far greater returns for the creditors," the restructuring firm said in a statement. |
