Lehman Brothers Holdings Inc. paid its lawyers and managers $42.1 million in October, bringing total advisers’ fees to $1.1 billion after 25 1/2 months in bankruptcy, according to a court filing.
Restructuring firm Alvarez & Marsal LLC, which runs the defunct investment bank through its co-founder, Bryan Marsal, led recipients with $369.8 million in fees through October for “interim management,” according to today’s filing in US Bankruptcy Court. Weil Gotshal & Manges LLP of New York has collected $245.8 million for acting as the lead bankruptcy law firm.
Jones Day, which is handling Lehman’s $11 billion lawsuit against Barclays Plc and other litigation, made $40.8 million through October.
Advisers’ fees haven’t faced major challenges from the bankruptcy judge or trustee who monitor such payments.
“The strategy of managing and maximizing the value of assets rather than liquidating quickly at fire sale values — and of pursuing litigation when we believe the potential value warrants it — takes time and requires fees,” Marsal said in an e-mail today. “But it will yield far greater returns for the creditors than all the costs of personnel and legal and professional services combined.”
Creditor claims
Marsal, 59, said on September. 22 that he aimed to raise $57.5 billion in the next five years, cutting creditor claims against those funds to about $365 billion. That would yield creditors an average of about 15.8 cents on the dollar, though some creditors would get more, and some would get less.
Lehman became the most expensive bankruptcy to administer in U.S. history in April, when it topped the $757 million cost of energy trader Enron Corp’s three-year liquidation, according to the database of Lynn LoPucki, a bankruptcy-law professor at the University of California, Los Angeles.
By October 31, Lehman and its affiliates had cash and investments of $21.1 billion to liquidate and pay creditors, according to the filing.
Kimberly Macleod, a Lehman spokeswoman, didn’t immediately reply to an e-mail seeking comment. Lehman, once the world’s fourth-biggest investment bank, filed the biggest bankruptcy in US history in September 2008 with assets of $639 billion.
