Lawyers to Collect $2 Billion in Fees From Lehman Bankruptcy

lawyers charge $2 billion for Lehman bankruptcyIt seems there are always those who gain from others' misery. In this case, the lawyers and accountants circling Lehman Brothers stand to make more than $2 billion in fees for unwinding what was once one of Wall Street's largest investment banks, the Financial Times reports. And that's despite the fact that the services are being provided at discount rates.

Lehman filed for Chapter 11 protection on Sept. 15, 2008, the largest such filing in history. By July, according to the publication, fees charged to Lehman's U.S. estate stood at $917 million. They should top $1 billion this month. Add to that the expenses for unwinding the European arm estimated at almost $900 million, and $2 billion is very much in reach.

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The FT further says bankruptcy experts claim that the sum is actually small when measured against the size of Lehman's $691 billion balance sheet when it failed. In fact, in other famous bankruptcy cases, such as WorldCom and Enron, costs came to between 1% and 2% of assets, far more than Lehman's current bankruptcy fees.

But while some claim the services are given at a discount rate, the FT adds that at the time, former "pay czar" Kenneth Feinberg pared back fees by $5.2 million for reasons such as incomplete breakdowns of expenses or overcharging for overtime meals. So, even at a discount, no doubt all firms wanted a piece of this huge fee pie.
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