BigLaw partner's hourly billing rate of nearly $2,500 draws objection from bankruptcy trustee
A U.S. bankruptcy trustee is objecting to the hiring of a Hogan Lovells partner who would charge nearly $2,500 per hour to handle appeals in the Chapter 11 case of a Johnson & Johnson subsidiary.
The trustee said the billing rate of $2,465 per hour charged by partner Neal K. Katyal is significantly higher than top rates of seven other law firms working on the case for the Johnson & Johnson unit, according to Bloomberg Law and Reuters. Katyal is a former U.S. acting solicitor general.
The $2,465 rate could be a new legal industry high, according to Reuters. Top approved billing rates by other firms “have been creeping toward the $2,000 mark over the past year,” the article said.
According to the trustee’s May 20 objection, top billing rates at the other firms include $1,450 at Jones Day; $1,875 at Skadden, Arps, Slate, Meagher & Flom; $1,795 at Weil, Gotshal & Manges; and $1,750 at Orrick Herrington & Sutcliffe. Actual rates billed by the firms in litigation so far have been lower, however ($1,350 at Jones Day, $1,195 at Skadden, and $1,579 at Weil).
The trustee made the objection in the bankruptcy of LTL Management. Johnson & Johnson created the subsidiary and assigned to it tort liabilities that stem from lawsuits alleging that Johnson & Johnson talcum-based products caused cancer. The move is known as the “Texas two-step.”
Johnson & Johnson has set aside $2 billion to pay lawsuit claims.
Many lawsuit plaintiffs have appealed a February ruling that said Johnson & Johnson could use the spinoff unit to resolve cancer claims in bankruptcy, according to Reuters.
The 3rd U.S. Circuit Court of Appeals at Philadelphia agreed to hear several appeals alleging the bankruptcy was filed in bad faith, Bloomberg Law reported.