BigLaw Bunch Bag $100 Million in Bankruptcy Billings

By Brian Baxter
The American Lawyer
New York Lawyer
August 31, 2009

As Tucson, Ariz.-based mining company Asarco nears the end of its four-year bankruptcy odyssey, lead debtors counsel Baker Botts submitted its 12th application for fees on Friday.

The filing put the firm past the $100 million mark in billable hours since Asarco filed for bankruptcy in August 2005 after getting hit with a series of asbestos and environmental pollution suits.

It pales in comparison to the $100 million in fees that Weil, Gotshal & Manges has racked up in just a year's worth of bankruptcy work for Lehman Brothers, but Baker Botts may have more work ahead.

"This is probably the middle of the end, and the end should certainly be in sight," Baker Botts bankruptcy and insolvency Chair Jack Kinzie says. "The final closing argument on the confirmation hearing was today and we expect a ruling from the judge on Monday."

Two companies are competing to acquire Asarco and bring the company out of bankruptcy. The first plan is proposed by Asarco's parent, Grupo Mexico, which lost control of Asarco in Chapter 11. The second plan is a proposed sale of Asarco to Mumbai-based Sterlite Industries, a subsidiary of London-based mining concern Vedanta Resources.

Asarco favors a sale to Sterlite, Kinzie says, but Grupo Mexico is trying to scuttle that deal with its own exit plan to retain control of Asarco.

To say the relationship between Asarco and its parent Grupo Mexico is contentious would be an understatement. Earlier this year Baker Botts trial lawyer G. Irvin Terrell won a breach of fiduciary duty case in an adversary proceeding against Grupo Mexico, which was represented by Haynes and Boone's Brian Antweil.

Haynes and Boone bankruptcy partner Charles Beckham Jr., is representing Grupo Mexico in the bankruptcy case along with Milbank, Tweed, Hadley & McCloy global financial restructuring partner Robert Moore.

Asarco retained Baker Botts in March 2004 to develop a prepackaged bankruptcy plan for the company's subsidiaries. The subsidiaries filed for bankruptcy in April 2005. When its union went on strike that July, Asarco filed for Chapter 11 a month later. (The union, represented by Richard Seltzer's from New York's Cohen, Weiss and Simon, is backing Sterlite's bankruptcy bid for Asarco.)

Since then, Baker Botts has been well compensated for its efforts. Bankruptcy court filings show the firm has billed Asarco for $101.8 million in fees and $5.5 million in expenses, including discounts. In Baker Bott's filing on Friday, the firm trimmed $120,000 from its fee request of $12.5 million for work completed between March 1 and June 30.

Shelby Jordan from Corpus Christi, Texas' Jordan, Hyden, Womble, Culbreth & Holzer is serving as local debtors counsel. Court records show the firm has submitted bills for $437,742 in fees and expenses.

This article first appeared on The Am Law Daily blog on AmericanLawyer.com.

The High Cost of Dying: Defunct
 Firm's Lawyers Raise Billing Rates

By Amanda Royal
The Recorder
New York Lawyer
July 31, 2009

SAN FRANCISCO - Just when we thought the Heller Ehrman estate was broke, we find out it’s soon going to be more broke.

The estate’s main law firm is raising its rates, about 8 percent. Pachulski Stang Ziehl & Jones partners John Fiero and Kenneth Brown are going to make $675 and $695 per hour, respectively, up from $625 and $650 per hour, according to a bankruptcy court filing. Pachulski of counsel Miriam Khatiblou will earn $495 per hour, up from $425. Associate Teddy Kapur will earn $425 per hour, up from $395.

By comparison, Thomas Willoughby at Felderstein Fitzgerald Willoughby & Pascuzzi which represents the creditors committee, makes $400 per hour. His partner Steven Felderstein makes $525 per hour.

The court has already awarded Pachulski $674,000 in fees for the work it did from December through April.

The estate has about $8 million in cash, according to the latest operating report filed in late May. It still counts $64 million in uncollected accounts receivable among its assets. The fee requests for the first three months of the bankruptcy totaled $1.8 million.

Will They Take It in Minivans?:
BigLaw Asks for $19 Million in Chrysler Fees

By Brian Baxter
The American Lawyer
New York Lawyer
June 26, 2009

Jones Day, Schulte Roth & Zabel, and Kramer Levin Naftalis & Frankel have submitted applications for nearly $19 million in attorney's fees in the Chapter 11 case of the company formerly known as Chrysler.

Chrysler bankruptcy docket now has a new name: Old Carco LLC. The company was a profitable one in May—-for bankruptcy lawyers, at least. (Hourly billing rates are listed parenthetically as available.)

Chrysler's bankruptcy counsel at Jones Day, which submitted bills for $18.5 million last month, sought an additional $12.7 million in fees and expenses for work its lawyers did for the Auburn Hills, Mich.-based automaker between April 30 and May 31.

According to a 69-page filing submitted by Jones Day partners Corinne Ball ($900), David Heiman ($900), and Jeffrey Ellman ($725) on Monday, the firm incurred nearly $256,500 in expenses and billed for $12.4 million in fees last month.

Two London-based Jones Day lawyers had the highest hourly rates: restructuring partner Adam Plainer ($1,175) and employee benefits partner John Papadakis ($1,075). Restructuring associate Andrew Amos ($825), also in London, had the highest hourly rate among associates. (The British pound goes far these days.)

The Detroit Free Press reports that 322 Jones Day employees are working on the Chrysler case: 72 partners, 15 counsel, 173 associates, five senior staff or staff attorneys, two law clerks, 28 paralegals, seven legal support personnel, 14 project assistants, and six staff employees.

Schulte Roth business restructuring partners Adam Harris ($880) and Lawrence Gelber ($715) submitted a massive 313-page monthly fee statement to the court, requesting more than $2.5 million in fees and expenses.

Real estate partner Jeffrey Lenobel ($880), tax partner Alan Waldenberg ($880), and M&A partners Marc Weingarten ($880) and Richard Presutti ($715) also had leading roles from the firm, which advised Cerberus Capital Management when the private equity giant acquired a majority stake in Chrysler in 2007. Mr. Presutti stated in court documents that Schulte Roth helped Chrysler negotiate a deal with Daimler last month over potential pension plan liabilities.
Kramer Levin corporate restructuring co-chairs Thomas Moers Mayer ($930) and Kenneth Eckstein ($930) are representing Chrysler's official committee of unsecured creditors along with bankruptcy partners Adam Rogoff ($795) and Robert Schmidt ($735). The firm submitted an eight-page application to the court requesting to be paid for more than $2.5 million in fees and expenses for the period between May 5 and May 31.

Cadwalader, Wickersham & Taft financial restructuring co-chair John Rapisardi is leading a team from the firm advising the U.S. Treasury Department, while Simpson Thacher & Bartlett bankruptcy chair Peter Pantaleo and corporate partner David Eisenberg are representing Chrysler's first lien secured lenders.

Bloomberg reports that Chrysler's Old Carco assets that linger in bankruptcy may retain little value for unsecured creditors after fees for lawyers and other professional advisors are paid.

@|Brian Baxter can be reached at brian.baxter@incisivemedia.com. This story first appeared on The Am Law Daily blog on AmericanLawyer.com.

BigLaw Bills GM $80 Million
 for Road (to the Poorhouse) Service

By Brian Baxter
The American Lawyer
New York Lawyer
June 16, 2009

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 in that period. That is 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. 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.

Records show that Jenner, which has been retained as general corporate and conflicts counsel to GM, has billed for roughly $11.3 million in fees and expenses since Dec. 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. The firm was initially paid a $6.5 million retainer, of which $384,906 remains.

Detroit's Honigman, special counsel to GM, racked up $15.1 million worth of billable time for the company. 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 Feb. 26.