The Work

June 15, 2009 11:03 AM

Bankruptcy Bonanza: Records Show $80 Million in Legal Fees for GM

Posted by Brian Baxter

Weil, Gotshal & Manges, Jenner & Block, and Honigman Miller Schwartz and Cohn have filed their applications for employment as counsel to General Motors in the troubled automaker's Chapter 11 case. The filings show that GM has paid more than $80 million in fees to the three firms over the past six months.

As lead bankruptcy counsel to GM, Weil has the lion's share of the billings at more than $54 million accrued during that period. That's roughly equivalent to the $55 million that Weil billed bankrupt Lehman Brothers between September 2008 and January 2009.

Weil bankruptcy partners Stephen Karotkin, Harvey Miller, and Joseph Smolinsky appear on the filing. The firm states that partners advising GM are billing between $650 and $950 per hour with associates billing at hourly rates between $355 and $640. Weil was paid a $5.9 million retainer, part of which it intends to apply to "any outstanding amounts" that were "not processed through [Weil's] billing system" prior to the firm being retained as bankruptcy counsel.

In an addendum listing current and former firm clients, Weil revealed that only annual fees paid to the firm by Lehman Brothers, General Electric, Microsoft, Citigroup, AIG, and private equity firm Thomas H. Lee Partners exceeded 1 percent of the firm's annual gross revenue. According to Am Law 100 financial data, Weil had more than $1.2 billion in gross revenues for 2008.

Bankruptcy court records show that Jenner, which has been retained as general corporate and conflicts counsel to GM, has billed for nearly $11.3 million in fees and expenses since being retained on December 11. The firm agreed to waive another $180,000 in fees it was due to receive over the next two years related to several product liability cases it was handling for GM.

Jenner bankruptcy practice chair Daniel Murray and corporate reorganization partners Patrick Trostle and Heather McArn are advising GM. Partners from the firm bill between $440 and $960 per hour, counsel between $385 and $725, and associates at hourly rates ranging from $275 to $520. The firm was initially paid a $6.5 million retainer, of which $384,906.47 remains.

Detroit's Honigman, special counsel to GM, racked up $15.1 million worth of billable time for the company during the past year. Nearly $6 million of that total came from advising GM on matters relating to its troubled auto parts suppliers. The firm was paid a $1 million retainer on February 26.

The following Honigman lawyers are advising GM (hourly billing rates listed parenthetically): bankruptcy chair Robert Weiss ($565), real estate chair Lawrence McLaughlin ($515), environmental law practice founding partner Joseph Polito ($495), and corporate reorganization partners Donald Baty, Jr. ($475), Tricia Sherick ($370), Michelle Epstein Taigman ($370), Frank Gorman ($370), and Aaron Silver ($285).

Last month's court filings in Chrysler's Chapter 11 case revealed that Jones Day had billed the Auburn Hills, Mich.-based automaker for $18.5 million in fees and expenses.

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Who cares, fake bankruptcies, fake car companies, fake banks gmac/ally. Change name, same POS. We gonna loose billions, and then REAL bankrupties start. Please quit this mess of bailing out bad run firms. No good will come out of it. PERIOD.

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