Lehman Paid Bankruptcy Lawyers, Managers $27.1 Million in Fees in April
Lehman Brothers Holdings Inc. (LEHMQ), whose fees to advisers have exceeded $1.26 billion during its bankruptcy, paid lawyers and managers $27.1 million in April.
Restructuring firm Alvarez & Marsal LLC, whose co-founder Bryan Marsal runs the defunct investment bank, made $431.7 million in “interim management” fees for 31 1/2 months of work, including $8.9 million last month, according to a filing with the U.S. Securities and Exchange Commission. Weil, Gotshal & Manges LLP, based in New York, was paid $293.8 million through April for acting as Lehman’s lead bankruptcy law firm, including almost $7.9 million last month.
Lehman’s monthly fees fell from about $30 million in recent months and as much as $45 million for November. Marsal, who bills Lehman hourly, aims to raise $61 billion by selling the defunct company’s assets to pay $322 billion in claims, giving creditors 18.6 cents on the dollar, on average.
Kimberly Macleod, a Lehman spokeswoman, didn’t immediately respond to an e-mail seeking comment.
Total administrative costs exceed $2.4 billion for the Lehman bankruptcy, including separate liquidations of Lehman Brothers Inc., the remnants of the brokerage, and Lehman Brothers International Europe, the investment bank’s U.K. unit.
The bankrupt brokerage’s total administrative fees for the first 24 months were $420 million, according to the SEC’s Office of the Inspector General. London-based LBIE paid advisers $774 million in fees through March 14.
Barclays Purchase
Barclays Plc (BARC) took on many of Lehman’s brokerage customers and some of its trading assets when it bought the defunct firm’s North American business in 2008.
The Lehman parent’s bankruptcy in Manhattan became the most expensive in U.S. history in April 2010, when it topped the $757 million cost of energy trader Enron Corp.’s three-year liquidation, according to data compiled by Lynn LoPucki, a bankruptcy-law professor at the University of California, Los Angeles.
In today’s SEC filing, the Lehman parent and its affiliates reported cash and investments of almost $23 billion as of April 30, compared with $23.2 billion on March 31. Of that sum, $4.1 billion was restricted, or unavailable for use, according to the filling. Lehman spent $957 million to settle claims with its German affiliate, Bankhaus AG.
Liquidation Plan
Once the world’s fourth-biggest investment bank, Lehman is fighting for control of a $61 billion liquidation plan with a group of bondholders including hedge fund Paulson & Co. and a rival group of derivatives creditors that includes Goldman Sachs Group Inc. (GS) and Morgan Stanley.
Lehman creditors range from banks and hedge funds to the New York Giants and Abu Dhabi Investment Authority, as well as individuals who hold Lehman bonds. Lehman filed for bankruptcy on Sept. 15, 2008, with assets of $639 billion.
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
To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net
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