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Legal fees mount quickly for corporations seeking protection from their creditors. The lead law firm in Chrysler’s 40-day bankruptcy process billed the company $12.7 million in May, including $900 an hour for 15 hours a day for every day of May for one attorney.
The lead law firm for Tulsa-based SemGroup LP, which has been in bankruptcy for a year, has submitted bills totaling $25.8 million through March (including hourly fees for one lawyer topping $1,000 an hour), plus expenses of $852,487.
The U.S. Trustee in the Tronox case last month objected to some of the billing of two law firms hired by Tronox, including hourly fees of up to $965, and asked the bankruptcy judge to cut the bills by more than 20 percent.
"Every dollar expended on legal fees results in a dollar less that is available for distribution to creditors,” Trustee Roberta A. Deangelis wrote. Tronox had $18 million in cash as of May 31, according to court records.
Lead law firm Kirkland & Ellis defended its bill, noting that most of the trustee’s objections were "unfounded and easily clarified.” The judge stood by his earlier ruling that he would approve no fees greater than $890 an hour, and told the law firms to work out disputes with the trustee.