Business

It's Good to Be the King, Or in This Case, a Lawyer or Consultant

February 13, 2015, 12:50 PM by  Allan Lengel

In the movie, History of the World, Part I, Mel Brooks repeatedly says: "It's good to be the king." After seeing the Detroit bankruptcy, Brooks might have added: "It's not so bad to be a lawyer or consultant either, at least when it comes to a big city bankruptcy."

U.S. Bankruptcy Judge Steven Rhodes issued an order this week giving the OK for lawyers and consultant fees in the historic Detroit bankruptcy.

The total fees came to  $183.2 million, however, the the state of Michigan reimbursed the city $5.29 million, bringing the total down to $177.91.

The list of the top seven was as follows:
1. Jones Day $57.90 (in millions)
2. Miller Buckfire $22.82
3. Ernst & Young $20.22
4. Conway MacKenzie $17.28
5. Miller Canfield $7.12
6. Kurtzman Carson Consultants $3.85
7. Pepper Hamilton $2.69

"The Court finds that the fees are reasonable. This finding is based primarily on the number and complexity of the issues in the case, the City’s extreme financial challenges, the results obtained, the substantial reductions to which many professionals have agreed, and the lack of objections or negative comments regarding fees filed with this Court," Rhodes stated in the order.

The judge noted that Jones Day, the law firm from which Kevyn Orr came from, had reduced its fees by more than $17 million.

The judge concluded in the order by saying: 

In utter contrast to the community sense when the case was filed, the residents of the City as well as its community and political leaders now justly feel and express a strong and genuine sense of enthusiasm, optimism and confidence about the City’s future. They should also feel and express a strong and genuine sense of appreciation for these professionals and their service.

The Court, and for that matter the City itself, must acknowledge that the City’s own professionals bore the burden of the many challenges in this case. It is therefore proper now to recognize in particular the contribution of the City’s advisors, Ernst & Young, Conway MacKenzie, and Miller Buckfire. It is also proper now to specially recognize the singular and extraordinary contribution of the City’s attorneys, Jones Day. 

 



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