October 23, 2008 4:41 PM

Milbank Owed $2.8 Million in Unpaid Lehman Bills

Posted by Zach Lowe

Our friends at The Am Law Litigation Daily brought us news this morning of Milbank, Tweed, Hadley & McCloy's application to represent the Official Committee of Unsecured Creditors in the Lehman Brothers bankruptcy case.

The application amounts to an exhaustive look at all of Milbank's potential conflicts, down to Milbank lawyers who have husbands and domestic partners at Weil, Gotshal & Manges, the firm representing Lehman.

But the financial details are, of course, the most interesting part of the document. To wit: Lehman owes Milbank $2,847,153.30 (that's 30 cents tacked on at the end!) in unpaid bills, which Milbank has agreed not to collect for now. In the calendar year before Lehman went bankrupt, Milbank billed Lehman for nearly $4.3 million. In all, bills to Lehman or its subsidiaries amounted to 1.84 percent of Milbank's gross revenue in 2008.

That sounds like a lot until you remember that Weil made $51.8 million from Lehman in the calendar year before Lehman collapsed last month.

But Milbank, too, once made a decent chunk of change from the failed bank. In 2007, for instance, payments from Lehman accounted for 2.95 percent of the firm's gross revenue. According to Am Law's figures for last year, Milbank grossed $642.5 million, meaning Lehman's payments amounted to about $19 million for the year. Not bad.

Other goodies:

• One Milbank partner owned 2,000 shares of Lehman Brothers Holdings, Inc., and two others owned 1,000 shares each; they've been instructed to stop trading those shares (not that anyone might buy them).

• One Milbank partner is a managing member of an LLC that jointly owns 1/8 of an aircraft with a Lehman director.

• The list of Lehman creditors Milbank once represented or now represents on unrelated matters runs 13 pages.
   
                                                              -Additional reporting by Nate Raymond

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