Mounting Fees from Enron Bankruptcy Lawyers Questioned |
Issued | Houston |
Date | 2002-04-24 |
Reporter | Sapa |
A dozen of the 19 legal and accounting teams representing or being paid by Enron in the first three months after it filed for bankruptcy Dec. 2 have charged the company more than dlrs 28 million in fees.
At that rate, an independent examiner needs to be appointed to scour the bills to ensure money that could repay creditors isn't wasted on unnecessary costs, Texas Deputy Attorney General Jeff Boyd said.
Of the 16 firms that work directly for Enron, 13 are law firms led by New York-based Weil Gotshal & Manges. The other three are two arms of Big Five auditing firms Ernst & Young and PricewaterhouseCoopers, appointed as restructuring and financial advisers for creditors.
Also on Enron's payroll are two law firms representing the unsecured creditors' committee and counsel for a bankruptcy examiner.
Some of those firms have yet to submit all their legal bills incurred since Enron's Dec. 2 bankruptcy filing, including Weil Gotshal & Manges, Boyd said Tuesday. The combined total could be as much as dlrs 20 million monthly, he said.
"Appointing a fee auditor will put all of us in a position where we can object to charges that should not be paid," Boyd said.
U.S. Bankruptcy Judge Arthur Gonzalez said last month in response to Boyd's initial request that he would order U.S. Trustee Carolyn Schwartz to appoint a fee committee to review legal bills submitted in Enron's case.
Melanie Gray, an attorney for Weil Gotshal & Manges, said in a response filed Monday that Gonzalez' intention to appoint a committee negated the need for a fee examiner because it would be redundant.
Such a committee hasn't been appointed. Boyd said if its members include an expert in fee audits, a separate fee examiner wouldn't be necessary.
A hearing on the issue is slated for Thursday in New York.
With acknowledgements to AP and Sapa.