For the second time in two months, lawyers affiliated with now-defunct Dewey & LeBoeuf are being accused of overbilling for work on a bankruptcy assignment taken on mere months before the firm itself filed for Chaper 11 protection.
In the latest instance, the plan administrator overseeing MF Global Holdings Ltd.’s Chapter 11 case asked in a Tuesday filing that the court cut $750,000 from a $3.75 million fee request Dewey submitted for six months of work as counsel to the commodities broker’s unsecured creditors committee. The administrator is also seeking to slash $1.75 million from $5.03 million requested by Proskauer Rose, which took over the assignment from Dewey when a bankruptcy team led by Martin Bienenstock switched firms in the weeks before Dewey’s May 2012 collapse. Alternatively, the plan administrator’s objection asks that the court appoint a fee examiner to investigate Dewey and Proskauer’s work on the assignment.
Last month, attorneys advising American Airlines parent company AMR Corp. in its Chapter 11 bankruptcy proposed trimming $644,000 from a $4.6 million bill Dewey’s bankruptcy estate is trying to collect for work the firm’s lawyers did as special litigation counsel on the case. The AMR attorneys argue that Dewey’s fees should be reduced because of unnecessary diligence completed by a partner as he prepared to leave then-floundering Dewey, as well as overpriced Federal Express bills and charges for first-year associates prohibited by the contract covering the assignment.
MF Global, which was run by former New Jersey governor Jon Corzine, collapsed in fall 2011 as a result of its exposure to European sovereign debt, and filed for bankruptcy protection on October 31, 2011. U.S. Bankruptcy Judge Martin Glenn is presiding over both the MF Global and Dewey bankruptcies.
As outlined in Tuesday’s filing, while the entire MF Global enterprise once had assets of $41 billion and liabilities of $39.7 billion, the six subsidiaries involved in the Chapter 11 case in which Dewey and Proskauer have advised are much smaller in scope, with a combined $130.9 million in assets and $3.5 billion in liabilities.
