The Work

May 11, 2011 7:07 PM

Lehman Work Continues to Pay Off for Firms, Vendors

Posted by Brian Baxter

A steady stream of legal assignments related to the ongoing bankruptcy of now-defunct investment bank Lehman Brothers has at least 12 firms reaping the rewards, including companies providing e-discovery services and contract attorneys.

Lawyers for the debtor have been busy in U.S. bankruptcy court in Manhattan, pressing JPMorgan Chase for dismissal of a suit over $70 billion the bank lent Lehman in the days before its collapse in September 2008. JPMorgan, represented by Wachtell, Lipton, Rosen & Katz, is asking the court to dismiss a Lehman claim seeking $8.6 billion in cash taken as collateral before Lehman slid into Chapter 11.

A year after Lehman and Barclays squared off in bankruptcy court over the sale of key assets following Lehman's bankruptcy filing three years ago, the two sides resumed their battle this month. The latest case centers on $2.1 billion being sought by the trustee for Lehman's former broker-dealer. On Monday, trustee James Giddens of Hughes Hubbard & Reed agreed to pay Barclays $1.1 billion in disputed assets connected to the British bank's $1.75 billion purchase of Lehman's North American business in 2008.

As previously reported by The Am Law Daily, Hughes Hubbard has received at least $108 million so far for the work of returning assets to former customers of Lehman's brokerage under the Securities Investor Protection Act. Giddens, the cochair of Hughes Hubbard's bankruptcy and corporate restructuring group, has turned to British firm Norton Rose for special counsel in the U.K.

Several other firms also continue to bulk up the billables with Lehman-related work.

According to the latest monthly operating report filed with the SEC, Lehman's main holding company spent nearly $32 million in March on outside professional advisers. Weil, Gotshal & Manges, serving as lead bankruptcy counsel to Lehman, saw its total haul in the case increase to almost $286 million after another $6.1 million in fees and expenses for its work in March.

Other top legal billers include: conflicts counsel Curtis, Mallet-Prevost, Colt & Mosle at $1.3 million (bringing the firm's tab to date to $26.5 million); and Jones Day, as special Asia and domestic litigation counsel, billed for $982,000 in March (its bankruptcy total comes to nearly $49 million). Gibson, Dunn & Crutcher, Dechert, and New York's Windels Marx Lane & Mittendorf billed for $232,000, $165,000, and $224,000, respectively, for real estate work in March.

Milbank, Tweed, Hadley & McCloy billed for more than $3.3 million in March for its work representing Lehman's unsecured creditors committee, bringing the firm's total to $93.2 million. Quinn Emanuel Urquhart & Sullivan, conflicts counsel to creditors, billed for nearly $1.9 million in March to increase the tab for its work to $17.1 million.

Discover Ready, an e-discovery provider, received $867,000 in March to bring its total in Lehman's 30-month bankruptcy case to $12.8 million. Hudson Global Resources billed the debtor for $524,000 in March for the services of contract attorneys, bringing the company's tab to nearly $9.6 million.

Lehman's monthly operating reports do not include expenditures for its unit in the U.K., which is now under the administration of global accounting firm PricewaterhouseCoopers as required by British bankruptcy laws. According to a copy of an audit report released by PwC last month, "over 30 law firms are retained in various capacities and in various geographies" by Lehman. Those firms employed overseas on Lehman's behalf, including Magic Circle shop Linklaters, have received a total of $242 million through March 14.

The Lehman case is the largest bankruptcy in U.S. history.

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