July 31, 2009 4:25 PM
The Bankruptcy Files: Inside Michael Vick's 'Excessive' Legal Bills
Posted by Brian Baxter
As we await the next wave of corporate bankruptcies--these stories never seem to get old--let's take a moment and review some of the latest to file.
The Am Law Daily has previously reported on some of the legal ramifications surrounding the economic downturn's impact on the gaming industry, but this week Las Vegas-based Station Casinos became the latest to succumb to the economic crisis when it filed for bankruptcy in Reno.
Station Casinos was taken private by its founding family--the Fertitta brothers--and investment firms Colony Capital and Eurazeo in a $5.4 billion deal in 2007. The company owns 18 casinos and resorts, including ten hotel casinos in the Las Vegas area that cater to local residents rather than Sin City tourists. (Its operating units were not included in the bankruptcy filing.)
Bloomberg reports that Station Casinos filed for Chapter 11 after failing to reach an agreement with unsecured creditors for a prepackaged bankruptcy filing, although the company can still access $150 million in funding from noncasino subsidiaries.
Milbank, Tweed, Hadley & McCloy financial restructuring cochair Paul Aronzon and bankruptcy partner Thomas Kreller are serving as lead debtors counsel. Aronzon rejoined the firm last September after spending the previous two-and-a-half years as head of restructuring and cohead of investment banking at Los Angeles-based Imperial Capital.
Bruce Beesley, bankruptcy chair at Lewis and Roca in Reno, is serving as local counsel to Station Casinos along with of counsel Laury Macauley. Brownstein Hyatt Farber Schreck is serving as regulatory counsel to the company.
None of the firms have yet submitted billing statements to the bankruptcy court.
While General Motors and Chrysler might be well on their way to driving out of Chapter 11, that doesn't mean the U.S. auto industry is in the clear. This week Connersville, Ind.-based Stant Manufacturing hit a bump in the road when the 111-year-old manufacturer of auto fuel, oil, and radiator caps filed for Chapter 11 in Delaware.
A former subsidiary of London-based auto products and components company Tomkins, Stant was sold to Miami-based private equity firm HIG Capital Management in 2008 for an undisclosed sum. (Since Stant's bankruptcy filing, HIG has maneuvered to try and reacquire its former portfolio company.)
Greenberg Traurig bankruptcy partner Scott Cousins, co-managing partner of the firm's Wilmington office, is serving as debtors counsel. (Cousins isn't just a bankruptcy expert, he also knows a thing or two about energy, having returned to the firm this year after an in-house stint at a clean energy supplier.)
The firm had not yet filled billing information with the bankruptcy court.
Bermuda-based satellite services provider ProtoStar and five affiliates filed for Chapter 11 protection in Delaware on July 29 and stated it was looking to sell its satellites in a bankruptcy auction.
Reuters reports ProtoStar was formed in 2005 to launch and operate high-power geostationary satellites that would lease capacity to direct-to-home (DTH) and broadband service providers in Asia.
Laura Davis Jones, a name and managing partner of the Delaware office of bankruptcy boutique Pachulski Stang Ziehl & Jones, is serving as debtors counsel. The firm has not yet filed billing statements with the bankruptcy court.
A list of ProtoStar creditors attached to ProtoStar's bankruptcy filing lists several law firms with outstanding billables. Singapore firm Allen & Gledhill, which has a joint venture with Linklaters, is listed as owed $106,904. Bermuda firm Cox Hallett Wilkinson is owed $100,000. Sidley Austin is owed $55,000. And Venable is owed $10,634. All the fees are listed as "disputed.
A matrix of ProtoStar creditors also filed with the bankruptcy court lists the names of ten more firms: offshore firm Appleby, the Asa Hutchinson Law Group, Bingham McCutchen, Cooley Godward Kronish, Emirati firm Hadef Al Dhariri & Associates, Holland & Hart, Milbank, Pryor Cashman, Richards Kibbe & Orbe, and Squire, Sanders & Dempsey.
After finishing his 18-month prison sentence on dogfighting charges last week, former Atlanta Falcons quarterback Michael Vick is poised to make his return to professional football.
Whether Vick's comeback will be in the National Football League or the upstart United Football League has yet to be determined, but first there's the matter of the former Virginia Tech star's ongoing bankruptcy proceedings to attend to.
Vick appeared in U.S. bankruptcy court in Newport News, Va., on Thursday for a hearing on the fees his lawyers are seeking in the case. Vick's lead bankruptcy lawyers from Crowell & Moring had asked the court to approve more than $2.6 million in fees and expenses for 7,200 billable hours of work over ten months.
"I don't understand how that happens," U.S. bankruptcy judge Frank Santoro said at the hearing, according to The Associated Press. (The billable time would equate to working 24 hours a day on the Vick case for 300 straight days.)
Vick's criminal lawyers, Howrey's Billy Martin and Lawrence Woodward, Jr., from Virginia Beach firm Shuttleworth, Ruloff, Swain, Haddad & Morecock, asked Santoro to take a close look at the Crowell fee requests, some of which included the cost of running an air conditioner on a weekend.
The U.S. trustee and several of Vick's major creditors also claimed that the fees were excessive. Recent court filings show that Crowell has agreed to slash its request for compensation to $1.7 million in fees and expenses. (Crowell bankruptcy partner Michael Blumenthal did not respond to a request for comment.)
The firm has had a rough go of it in the case. In June, Vick's former lead lawyer from the firm, Peter Ginsberg, withdrew from the case after the Eleventh Circuit upheld a sanctions order against him.
Judge Santoro refused to approve the new fee request by Crowell, but said he would revisit the fee issue at a confirmation hearing in the case scheduled for late August. Santoro has set a deadline of summer's end to resolve the case, having rejected an earlier reorganization plan filed by Vick's lawyers in April.