Joel R. Glucksman
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Detroit bankruptcy costs reached almost $36 million in 2013
Author: Joel R. Glucksman
Date: May 27, 2014
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Detroit has bid to get out of billions of dollars in debt by filing for protection under Chapter 9 of the bankruptcy law. However, in doing so, the city is racking up a large, new bill in the short term.
The total fees and expenses to be paid to law firms and consultants engaged in the Detroit bankruptcy reached almost $36 million by the end of last year, according to the Detroit Free Press. Court-appointed fee examiner Robert Fishman revealed the figure in his latest quarterly report.
The top biller was the city’s lead bankruptcy firm, Jones Day, which submitted bills for over $16.6 million in fees and almost $734,000 in expenses, the news source explained. Next was Conway MacKenzie, Detroit’s restructuring consultant, which billed the city for $5.3 million in fees, followed by the Dentons law firm, which billed for $4.4 million in fees. In total, the city is paying fees and expenses for 16 law firms.
“Although the fees incurred by the professionals during the reporting period and covered by this Second Quarterly Report are substantial by any measure, the fee examiner believes that all of the requested fees are commensurate with the complexity and speed of the case, and the quality of the services that the professionals have provided,” Fishman wrote, according to Michigan Live. “Due to the magnitude and complexity of the Case, the novelty of the legal issues, the extremely tight time frames imposed by the court and the strong differences in opinion between the various parties about what to do and how to do it, it was (and continues to be) inevitable that the costs associated with the services provided by the various professionals were going to be significant.”
Fisherman is billing the city for $246,942.80, and almost $1,000 in expenses for his work during the last three months of 2013, the news source reported.
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
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