Lehman Brokerage Trustee Law Firm Got $19.5 Million in Fees in Four Months
The law firm of the trustee liquidating Lehman Brothers Holdings Inc. (LEHMQ)’s brokerage received $19.5 million for four months’ work plus expenses, according to a court filing.
James Giddens and his law firm Hughes Hubbard & Reed LLP were paid $19.2 million in fees and $284,451 for expenses from June 1 through Sept. 30, according to the filing in U.S. Bankruptcy Court in Manhattan yesterday.
High fees in the liquidations of the Lehman brokerage, and of the jailed Ponzi-scheme operator Bernard Madoff’s firm, might deplete the $2.5 billion fund of the Securities Investor Protection Corp., according to a March 30 audit report by the Office of the Inspector General at the Securities and Exchange Commission. The SEC watchdog recommended “systematic” inspections of SIPC by the SEC to ensure cost-effective processing of brokerage customer claims and liquidations.
Giddens and his law firm were paid about $108 million in the 24 months from the Lehman brokerage’s September 2008 bankruptcy through September 2010, according to the audit report. As of Sept. 30, total administrative fees for the bankrupt brokerage, including for accountants and consultants, were $420 million, it said.
Parent Company
Separately, the Lehman parent company spent more than $1.2 billion on managers and lawyers for 29 1/2 months of work through February, according to a court filing.
Madoff trustee Irving Picard and his law firm Baker Hostetler LLP made about $102 million in the 21 months from December 2008, when Madoff was arrested, through September 2010, it said.
Jake Sargent, a Giddens spokesman, didn’t respond to e-mails seeking comment. Amanda Remus, a Picard spokeswoman, declined to comment.
The main Lehman bankruptcy 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.
To contact the editor responsible for this story: David Rovella at drovella@bloomberg.net.
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