Posted Sep 11, 2013 06:48 pm CDT
How much has Lehman Brothers Holdings paid to lawyers and other bankruptcy professionals since it’s 2008 Chapter 11 filing? More than $2 billion, Bloomberg News reports, with almost $500 million going to Lehman counsel Weil, Gotshal & Manges.
Lehman creditors are set to get 18 cents on the dollar by 2016, according to the article. Under a 2011 liquidation plan, the value of the Lehman estate was estimated to be $65 billion.
Robert Lawless, a bankruptcy professor at the University of Illinois College of Law, told Bloomberg News that the fees are appropriate.
“It’s easy to be outraged and say it shouldn’t happen, but is this emblematic of a system that’s broken and isn’t working?” he asks. “I can’t look at $2 billion in fees in a $639 billion case and say that.”
Harvey Miller, the Weil lawyer who represents Lehman, told Bloomberg that recovery may rise to 22 cents on the dollar as the value of the estate’s assets are expected to increase to approximately $80 billion over the next three years.
Lehman listed $613 billion in debts when if filed for bankruptcy protection. Technically, Bloomberg reports, the company exited bankruptcy in 2012. A $14 billion distribution is scheduled to pay out in October, and after that, the estate’s distributions in total will be $43 billion.
Miller expects that the case will continue for three to five more years, as large lawsuits go on and the reorganization is carried out.