Lehman Brothers Holdings Inc., which has spent almost $1.5 billion on fees while in bankruptcy, paid $37.2 million to lawyers and managers in October, according to a regulatory filing.
Restructuring firm Alvarez & Marsal LLC, whose co-founder Bryan Marsal runs the defunct investment bank, has charged $487.6 million in fees for 37 1/2 months of “interim management,” including about $9.3 million last month, according to documents filed today with the U.S. Securities and Exchange Commission. Weil, Gotshal & Manges LLP, based in New York, whose fees total $358.6 million so far for acting as Lehman’s lead bankruptcy law firm, collected $15.3 million in October.
“They just might be worth it, if they get the plan confirmed next month,” said Stephen Lubben, a bankruptcy law professor at Seton Hall University in Newark, New Jersey, who writes about Lehman on a blog, Credit Slips.
Marsal, who bills Lehman hourly, has said he will start distributing some cash to the defunct firm’s creditors by next year, or more than three years after the September 2008 bankruptcy filing. A court hearing on his $65 billion liquidation plan is set for Dec. 6, as banks and hedge funds continue to file objections to aspects of the scheme.
“A rather complicated confirmation hearing now seems inevitable,” Lubben said.
Lehman and its affiliates were holding cash and investments of $26.4 billion on Oct. 31, compared with $25.7 billion on Sept. 30. About $2.8 billion of the cash wasn’t available for use, according to the filing.
Marsal ended a fight for control of the firm’s liquidation by taking some potential payments from bondholders including hedge fund Paulson & Co. to give to derivatives creditors such as Goldman Sachs Group Inc. Holders of $160 billion in claims supported the plan by October, Lehman said. Final votes are still being counted.
Marsal aims to raise $65 billion by selling the defunct company’s assets in the next few years to try to pay estimated claims of about $370 billion, he has said.
Kimberly Macleod, a Lehman spokeswoman, declined to comment on the fees.
The Lehman 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.
Lehman’s 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. Once the world’s fourth-biggest investment bank, 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).