Lehman Brothers Holdings Inc. paid its lawyers and managers $44.5 million last month, bringing the investment bank’s total adviser fees to $917.6 million after 22 1/2 months in bankruptcy, a regulatory filing shows.
Restructuring firm Alvarez & Marsal LLC, which provided Lehman with its current chief executive officer, Bryan Marsal, led recipients with $326 million in fees for “interim management,” according to an Aug. 13 filing with the U.S. Securities and Exchange Commission.
Weil Gotshal & Manges LLP of New York has collected $212.3 million for acting as the investment bank’s lead bankruptcy law firm. Milbank Tweed Hadley & McCloy LLP got $61.1 million for advising Lehman’s creditors’ committee.
“The judge can always claw back fees at the end of the case, when he’ll have a better perspective on the value of the fees,” said Stephen Lubben, a bankruptcy law professor at Seton Hall University School of Law in Newark, New Jersey, in an e- mail today.
Kimberly Macleod, a Lehman spokeswoman, had no immediate comment. Bryan Marsal has said he expects to recover many times more money for creditors than the amount paid in fees.
By July 31, Lehman and its affiliates had cash and investments of $19.3 billion to liquidate and pay creditors, up from $18.9 billion at the start of the month, according to the filing. Lehman has said creditors’ allowable claims may total $260 billion, compared with the $1 trillion originally filed.
Five More Years
Lehman, once the world’s fourth-biggest investment bank, has said it may spend five more years selling assets to pay unsecured creditors as little as 14.7 cents on the dollar. Its payments to advisers haven’t faced major challenges such as those in the bankruptcy of automaker Chrysler LLC, which used U.S. Treasury loans to wind down.
Lehman filed the biggest U.S. bankruptcy in September 2008 with assets of $639 billion. Creditors include Goldman Sachs Group Inc., UBS AG, the New York Giants professional football team and Abu Dhabi Investment Authority as well as individuals who hold Lehman bonds.
The case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
To contact the reporter on this story: Linda Sandler in New York at lsandler@bloomberg.net.
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