January 28, 2009 4:38 PM
Sidley Would Like to Clarify Its Tribune Billing Situation
Posted by Zach Lowe
Cubs fans and newspaper junkies were taken by surprise in December when the Chicago Tribune reported that the bankrupt Tribune Company had started paying Sidley Austin for counsel as early as March for "services rendered in contemplation or in connection with the restructuring efforts of (Tribune) and the filing of these Chapter 11 cases." The filing seemed to suggest that Tribune head Sam Zell was thinking about a bankruptcy filing just three months after finalizing purchase of the Trib media empire.
Sidley also got some attention for the maximum $1100 per hour its top partners listed as a billing rate in the filing. According to this Bloomberg story today, Sidley's not alone at that rate level; top bankruptcy shops such as Sidley, Kirkland & Ellis, and Skadden, Arps, Slate Meagher & Flom are increasing rates as demand for expert Chapter 11 counseling shoots up. (Weil, Gotshal & Manges, on the other hand, tells Bloomberg they are keeping rates steady as the economy struggles).
This is all background to an unusual filing made last week in which Sidley explained to the court that the $3 million it billed Tribune in the year prior to the Chapter 11 filing wasn't specifically for preparation of a bankruptcy. In fact, the funds Tribune paid Sidley for Chapter 11 prep "are less than such amount," the filing says.
Even better for Tribune: Sidley told the judge that a December estimate that Tribune still owes Sidley another $1.4 million was off by about a third. Sidley totaled up its billable hours and found that Tribune owes the firm just $965,000.
James Conlan, cochair of the Sidley's bankruptcy practice, did not return messages seeking comment.Make a comment