The Work

October 20, 2010 6:18 PM

The Bankruptcy Files: Lehman Lawyers Push Case Past $1 Billion Billable Barrier

Posted by Brian Baxter

The cost of unwinding what remains of defunct investment bank Lehman Brothers officially broke the $1 billion mark last month.

Lehman's lead Chapter 11 counsel at Weil, Gotshal & Manges received $16.1 million in September for fees and expenses, bringing the firm's total bill to $237 million for its bankruptcy work, Bloomberg reports. Jones Day, which is representing Lehman in litigation against Barclays Capital, received another $3.1 million.

Milbank, Tweed, Hadley & McCloy was paid $1.9 million in fees and expenses for its efforts representing Lehman's unsecured creditors committee, bringing its total bankruptcy tab to $71 million. The total fees incurred by the Lehman estate include payments made to restructuring professionals, financial advisers, e-discovery services, and art consultants and auctioneers. (Lehman's latest monthly operating report is included in a recent 8-K filing by the company; click here for a complete listing of the outside firms billing away in the Lehman bankruptcy.)

Below are some of the latest large corporate bankruptcies to cross The Am Law Daily's radar. When available, hourly billing rates are in parentheses:

Consolidated Horticulture Group

A nursery operator that supplies flowers to chains such as Home Depot, Lowe's, and Wal-Mart filed for bankruptcy in Santa Ana, Calif., on October 12, Bloomberg reports, listing $179.3 million in assets against $86.7 million in debt. Consolidated Horticulture Group blames an abrupt decline in sales and the crash of the residential housing market for its bankruptcy.

Laura Davis Jones ($855), a name partner at national bankruptcy boutique Pachulski Stang Ziehl & Jones, is advising Consolidated, along with partners David Bertenthal ($750), Joshua Fried ($625), and Timothy Cairns ($450). The firm has received $175,000 in fees from the company in the year prior to its Chapter 11 case, according to bankruptcy court filings.

Bankruptcy partner Elizabeth Futrell, corporate chair Curtis Hearn, corporate partner F. Rivers Lelong, Jr., and business and commercial litigation chair R. Patrick Vance from New Orleans-based Jones, Walker, Waechter, Poitevent, Carrère & Denègre are serving as bankruptcy cocounsel to Consolidated.

Court records show that Jones Walker has received retainers in the amount of $356,571.96 since the firm first began representing the debtor in August 2010. Partners from the firm are billing between $275 and $425 per hour, while associates are billing between $165 and $200.

Several Am Law 200 firms--such as Dechert, K&L Gates, Latham & Watkins, and Skadden, Arps, Slate, Meagher & Flom--appear in a matrix of Consolidated creditors.

Crystal Cathedral Ministries

A megachurch in Orange County, Calif., has filed for bankruptcy protection after being sued by creditors for payment on unpaid debts, the Los Angeles Times reports. Crystal Cathedral Ministries (CCM), founded by Hour of Power host and noted televangelist Robert Schuller, is best known for its namesake church in Garden Grove, Calif. But according to The New York Times, CCM had been struggling with declines in revenue brought about by the recession.

Marc Winthrop, a founding partner of Newport Beach, Calif.-based bankruptcy boutique Winthrop & Couchot, is serving as lead debtor's counsel. The firm has not yet filed billing statements with the bankruptcy court.

According to a list of the megachurch's 20 largest unsecured creditors, CCM owes money to two firms. Los Angeles firm Gipson Hoffman & Pancione is listed as being owed $110,622, while Washington, D.C.-based Lutzker & Lutzker is due $147,225.

TerreStar Networks

The Reston, Va.-based provider of mobile and Internet communications services filed for bankruptcy on Tuesday in Manhattan, listing liabilities of $1 billion, Bloomberg reports. Akin Gump Strauss Hauer & Feld restructuring partners Ira Dizengoff ($950) and Russell Parks, Jr. ($880), counsel Arik Preis ($675) and Joanna Newdeck ($575), and corporate senior attorney Kelly Labritz ($575) are serving as lead debtor's counsel.

According to the firm's application for employment, partners are billing between $525 and $1,150 per hour, counsel between $475 and $835, and associates at hourly rates ranging from $325 to $600. Court records show that Akin Gump was paid more than $5.4 million in the year prior to TerreStar's Chapter 11 petition, including a $350,000 retainer for the company's bankruptcy case.

Fraser Milner Casgrain insolvency and restructuring partners Alex MacFarlane ($750) and Michael Wunder ($750) are serving as Canadian counsel to TerreStar along with communications partner Kirsten Embree ($525) and restructuring counsel Ryan Jacobs ($600). Court records show that Fraser Milner has received roughly $862,939 for its efforts so far.

Stikeman Elliott restructuring partners Sean Dunphy ($940) and Guy Martel ($625) and corporate partners Sidney Horn ($925) and Claire Zikovsky ($650) are serving as special Canadian counsel to two TerreStar units. Court records show that Stikeman partners and senior counsel are billing between $465 and $980 per hour, while associates are ranging from $235 to $685.

Willkie Farr & Gallagher business reorganization partner Rachel Strickland is representing EchoStar, TerreStar's largest secured creditor, which is backing a restructuring plan for the debtor. Weil is representing private equity firm Harbinger Capital, one of TerreStar's largest shareholders.

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