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Lawyers who worked on deals for Enron Corp. were paid well, but it turns out that investigating those deals pays even better. Neal Batson, Enron’s court-appointed bankruptcy examiner, turned in his last report in November, and the final bill is a whopper. Since he and his colleagues at Alston & Bird started working on the Enron probe in the summer of 2002, they’ve billed the company’s estate more than $100 million. In contrast, annual fees for Vinson & Elkins � Enron’s regular outside counsel � peaked at $42.8 million in 2000, according to Batson’s study. The investigation, which produced more than 4,000 pages in four reports, is almost certainly the most expensive inquiry of its nature in U.S. history. In October alone, more than 70 lawyers at Alston & Bird billed Enron approximately $5 million for more than 11,000 hours of work. Was it money well spent? Stuart Hirshfield, a bankruptcy partner in the New York office of Ropes & Gray, notes that “$100 million is a phenomenal amount of money for doing just about anything.” He adds, “You have to start out with that idea in determining whether it was ultimately to everyone’s benefit.” A bankruptcy examiner’s mission is twofold. He identifies causes of action that may lead to the recovery of more money or assets to pay off the estate’s creditors. And he provides an account of what went wrong in a corporate failure, in order to restore public faith in the American economic system. Whether Batson’s team accomplished these goals is likely to be a lingering question, especially since he’s trying to shut the door on the matter. After submitting his last report, Batson filed a motion asking to be discharged as Enron’s examiner. As part of that motion, he also sought unprecedented protection from future discovery and liability, as well as the court’s permission to destroy many of the documents he obtained in the course of his investigation. Batson did not respond to requests for comment for this article. His motion was greeted with objections from many quarters, including Enron and the company’s Official Unsecured Creditors’ Committee. Enron’s lawyers at Weil, Gotshal & Manges asked bankruptcy judge Arthur Gonzalez to reject Batson’s requests for broad immunity, noting that the company may later need documents in the examiner’s possession. “[D]espite their voluminous nature, the [r]eports do not stand on their own,” Enron argued. But in December Gonzalez discharged Batson and granted him immunity for his reports, though not for any potential lapses in professional conduct. The judge postponed the discovery immunity and document retention issues for a later hearing, as yet unscheduled. Larren Nashelsky, a bankruptcy partner in the New York office of Morrison & Foerster, believes that Batson still has a role to play in the Enron bankruptcy and shouldn’t “wash his hands” of the matter. Nashelsky adds, “There really is an obligation to make himself available to explain his findings.” The high cost of the Enron investigation could make courts think twice about giving other examiners such broad latitude. Nashelsky notes, “I think there’ll be much higher scrutiny in the future.” But he concedes that there’s never been a case quite like Enron. “In fairness, it’s probably the most complicated [bankruptcy] � in terms of scope, and the fraud involved � that’s ever taken place,” Nashelsky explains. “I’m not sure [the costs were] unreasonable given the complexity of the matter, and the lack of forthcoming by the people involved.” Ropes & Gray’s Hirshfield agrees that the case was extraordinarily complex, and that any investigation would have been expensive. He also notes that the early public focus on Enron most likely gave added weight to the public-service aspect of the examiner’s role. In considering whether a $100 million investigation is justified, “there’s a benefit, and then there’s a cost benefit,” Hirshfield says. “Is it more important to bring comfort to the public? There are no good answers.” That question has only become more complicated as Enron has faded from the headlines. While the media gave heavy play to Batson’s early findings, they largely ignored his final report. “The longer it takes, the more indifferent people become,” Hirshfield explains. “The quicker you can respond to unanswered questions, the more benefit there is.”

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