By Joseph Ax
NEW YORK, Jan 31 (Reuters) - The cost of shepherding Lehman
Brothers Holdings Inc through and beyond its record
bankruptcy has surpassed $2 billion, as the former Wall Street
investment bank prepares to make a third payment to creditors
within three months.
The bank paid out more than $150 million in December to
lawyers, advisers and managers, according to a court filing in
U.S. Bankruptcy Court in Manhattan on Thursday.
A third round of payments to creditors will be made between
March 25 and April 30, according to a separate filing on
Thursday.
Lehman filed for Chapter 11 in September 2008 at the height
of the financial crisis, entering what would become the largest
bankruptcy in history.
The latest fees include more than $47 million to Alvarez &
Marsal, which has managed the bank's assets during liquidation,
and almost $11 million to Lehman's lead counsel, law firm Weil
Gotshal & Manges.
All told, Alvarez & Marsal has collected approximately $627
million in fees since Lehman filed for bankruptcy, while Weil
has received more than $454 million.
Professional fees in bankruptcy are public because they come
out of the same pot of money used to pay creditors.
Professionals are paid ahead of other creditors, so every dollar
paid in fees is a dollar less that goes to creditors.
The U.S. Trustee Program, the Justice Department's
bankruptcy oversight arm, is in charge of regulating spending in
bankruptcy and helping to ensure maximum recoveries for
creditors. The Trustee has taken a hard line of late on
excessive fees, and is in the process of issuing new guidelines
aimed at increasing disclosure requirements for fee-related
expenses.
The case is In re Lehman Brothers Holdings Inc,
U.S. Bankruptcy Court, Southern District of New York, No.
08-13555.
(Additional reporting by Jonathan Stempel and Nick Brown)
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