Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Bankruptcy Fees Announced Paid By The City of Detroit
Author: Joel R. Glucksman
Date: January 15, 2015
Key Contacts
Back
As the curtain opens slowly Detroit’s bankruptcy fees are revealed…
City officials disclosed Dec. 30 that Detroit paid out approximately $170.2 million in bankruptcy fees and expenses to lawyers and restructuring consultants during its landmark bankruptcy case.
When the state’s reimbursement of $5.29 million is considered, the total fees paid from the city’s general fund come to $164.91 million, The Detroit News continued. A deal was reached earlier this month regarding concessions from individual firms expected to shave off another $25 million from this figure, but specifics were not included in Tuesday’s filings per a mediation order.
Bankruptcy firm Jones Day earned the largest payout from the city to the tune of $57.9 million, according to the news source.
Investment banking firm Miller Buckfire followed with $22.82 million, financial restructuring advisory firm Ernst & Young took $20.22 million and operational restructuring firm Conway MacKenzie took $17.28 million. U.S. Bankruptcy Judge Steven Rhodes, who presided over the case, will rule as to whether these fees are reasonable within the next two weeks.
“We were very pleased with the mediation process and thankful to Judge (Gerald) Rosen and his team (of mediators) for their hard work throughout,” Detroit Corporation Counsel Melvin Butch Hollowell told the news source. “Now, we will look forward to Judge Rhodes’ ruling on the reasonableness of these fees.”
The final figure came in $12 million under the $177 million that Detroit had budgeted in its plan to restructure $18 billion of debts and obligations under Chapter 9 of the bankruptcy law, according to Reuters. The city also reported paying $1.4 million in fees out of the enterprise fund and just shy of $12 million paid by its two pension funds.
Rhodes sent Detroit’s bankruptcy team into mediation earlier in the proceedings after the city’s officials raised concerns about legal costs eating into the money needed to rebuild, according to the news source. Court mediators announced fee deals were reached on Dec. 11, but declined to disclose details.
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Dissolving Your Business: Essential Legal Steps to Protect Your Interests
If you’re considering closing your business, it’s crucial to understand that simply shutting your doors does not end your legal obligations. Unless you formally dissolve your business, it continues to exist in the eyes of the law—leaving you exposed to ongoing liabilities such as taxes, compliance violations, and potential lawsuits. Dissolving a business can seem […]
Author: Christopher D. Warren
The Role of Corporate Restructuring in Mergers & Acquisitions
Contrary to what many people think, corporate restructuring isn’t all doom and gloom. Revamping a company’s organizational structure, corporate hierarchy, or operations procedures can help keep your business competitive. This is particularly true during challenging times. Corporate restructuring plays a critical role in modern business strategy. It helps companies adapt quickly to market changes. Following […]
Author: Dan Brecher
Crypto Enforcement: A Former Prosecutor’s Warning to Criminals and the Public
Cryptocurrency intimidates most people. The reason is straightforward. People fear what they do not understand. When confusion sets in, the common reaction is either to ignore the subject entirely or to mistrust it. For years, that is exactly how most of the public and even many in law enforcement treated cryptocurrency. However, such apprehension changed […]
Author: Bryce S. Robins
Understanding Chattel Paper: A Key Component in Secured Transactions
Using chattel paper to obtain a security interest in personal property is a powerful tool. It can ensure lenders have a legal claim on collateral ranging from inventory to intellectual property. To reduce risk and protect your legal rights, businesses and lenders should understand the legal framework. This framework governs the creation, sale, and enforcement […]
Author: Dan Brecher
Crypto Compliance: A Comprehensive Guide
For years, digital assets operated in a legal gray area, a frontier where innovation outpaced the reach of regulators and law enforcement. In this early “Wild West” phase of finance, crypto startups thrived under minimal oversight. That era, however, is coming to an end. The importance of crypto compliance has become paramount as cryptocurrency has […]
Author: Bryce S. Robins
Supreme Court and Title VII: Implications for Reverse Discrimination
Earlier this month, the U.S. Supreme Court issued a decision in Ames v. Ohio Department of Youth Services vitiating the so-called “background circumstances” test required by half of federal circuit courts.1 The background circumstances test required majority group plaintiffs pleading discrimination under Title VII of the Civil Rights Act to meet a heightened pleading standard […]
Author: Matthew F. Mimnaugh
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.