August 11, 2011 7:30 PM
The Bankruptcy Files: 'Old GM' Generates Some Big Legal Bills
Posted by Brian Baxter
Business bankruptcies may be down 13 percent this year compared to last, but one old standby continues to deliver for a truckload of Am Law 200 firms--and it's not filed under "Lehman Brothers."
General Motors managed to steer itself out of bankruptcy in July 2009, but the parts left behind by the Detroit-based auto giant became part the Motor Liquidation Company (a.k.a. Old GM), whose Chapter 11 case has continued to hum along over the past two years.
Now some big legal bills for the legacy company and its successor are coming due. Exhibit A: the fifth and final application for attorneys' fees filed this week by GM's lead bankruptcy counsel at Weil, Gotshal & Manges.
Court filings show that Weil is owed nearly $9.5 million in fees and expenses for its work in the case from October 2010 through this past March, bringing the firm's total haul in the matter to almost $46.2 million. Weil's voluminous billing records also reveal that roughly 400 lawyers and 100 support staffers have worked on the matter for more than 70,000 hours all told, according to The Detroit News, which analyzed the firm's final fee request.
And Weil, which was also paid $54 million by GM prior to its bankruptcy proceedings, isn't the only big legal biller in the bunch. A notice of a final applications for fees by several other law firms and professional advisers show that roughly $80 million must be approved by a U.S. bankruptcy judge at a hearing in Manhattan scheduled for September 26.
Jenner & Bock, for one, is owed more than $5.2 million for its work in the case between June 2009 and March of this year. The Am Law Daily previously reported that Jenner earned $11.3 million from GM in the six months prior to the company's bankruptcy filing on June 1, 2009. (The firm also advised GM last fall when the automaker raised $23.1 billion through an initial public offering.)
Another longtime legal adviser to GM, Detroit-based Honigman Miller Schwartz and Cohn, is requesting more than $2.4 million in fees and expenses for its work on behalf of the automaker from June 2009 through March. Like Jenner and Weil, Honigman also profited handsomely from GM in the year prior to the company's Chapter 11 filing, having been paid $15.1 million for its efforts, according to court records.
Baker & McKenzie, which has handled European restructuring work for GM, is due more than $1.3 million for its work in the case between June 2009 and March. New York's Togut, Segal & Segal, GM's conflicts counsel, seeks almost $1.1 million for its work in the case from December 2009 through March.
Jones Day, which helped guide GM's rival Chrysler through its own government-backed bankruptcy proceedings, has also been serving as special counsel to GM. The firm is seeking payment for $471,285 in fees and expenses for its work in the case from June 2009 through this past January.
(The Am Law Daily previously reported that Jones Day once advised GM on a potential merger with Chrysler before both automakers sought bankruptcy protection. The firm was prepared to build a firewall between its teams of lawyers representing both companies, according to court records.)
Kramer, Levin, Naftalis & Frankel, which snared the role as lead counsel to GM's official committee of unsecured creditors, is seeking $11.5 million for its work in the case from June 2009 through March. Morris, Nichols, Arsht & Tunnell, which is serving as Delaware counsel to unsecured creditors, is owed a mere $13,517.
Butzel Long's work for a group of GM's unsecured creditors, which received some coverage for its alleged error-spotting ways a few months ago, is seeking almost $2.2 million for fees and expenses through the same time period. Eric Fisher, the lead lawyer from the firm working on the matter, joined Dickstein Shapiro in June.
Caplin & Drysdale, serving as special counsel to unsecured creditors with asbestos-related claims against GM, has submitted fees and expenses totaling nearly $2.5 million for the firm's work in the case between October 2009 and March of this year. Another firm representing asbestos claimants, Dallas-based Stutzman, Bromberg, Esserman & Plifka, is seeking almost $1.1 million for its work from February 2010 through March.
Brady Williamson, a partner at Wisconsin firm Godfrey & Kahn serving as a fee examiner in the GM reorganization case, is also seeking compensation for his time. Court records show that Williamson and Godfrey & Kahn are owed more than $1.5 million in fees and expenses for their work in the case between December 2009 and March of this year.
Is there a potential corporate bankruptcy on the horizon that could serve as a similar Chapter 11 prize for restructuring lawyers and litigators? According to this excellent story by The New York Times's Deal Professor, Bank of America's ailing Countrywide unit could fit the bill if successor liability issues cannot be resolved.Make a comment