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UA Bankruptcy-$335 Million In Fees!  
User currently offlineLTBEWR From United States of America, joined Jan 2004, 13199 posts, RR: 15
Posted (8 years 9 months 2 weeks 3 days 18 hours ago) and read 2554 times:

According to some news reports, including below linked one, the 38 month long Bankruptcy of United Airlines cost the company over $335 MILLION in fees for lawyers and consultants. While the UA bankruptcy was one of the largest in history, a lot of people - made a LOT of money at the expense of the workers at UA. The knowlege of these fees is public record as the providers of those services have apply to the court for approval of payment from the Bankruptcy Judge in the case.
The biggest biller: The law firm of Kirkland & Ellis, one of the largest law firms in the USA, who's fee application if for a whopping $93.7 Million alone. The top partner billed over 3.45 Million in fees alone, and the #2 lawyer is billing a breathtaking $5.5 Million alone, which works out to over 10,000 hours of work or 62.5 hours a week. Guess he didn't have much time for a life. Over 300 billing professionals at the firm worked on the case.
As a result of the work of such professionals, UA was able to cut expenses by $7 Billion and $13 Billion in debt. Of course, much of that $7 Billion was from the paychecks of the workers.
I hope the Judge cuts these fees by a significant amount and the money goes to the non-pilot and lower level pilots pay at UA.
Article: http://cbs2chicago.com/topstories/local_story_068142957.html

14 replies: All unread, jump to last
 
User currently offlineOkie From United States of America, joined Jul 2003, 3188 posts, RR: 3
Reply 1, posted (8 years 9 months 2 weeks 3 days 16 hours ago) and read 2497 times:

$355 million is just a start for legal and consultant fees. Granted there are certain legal wranglings that go on during a bankruptcy.

The real issue here is that a lot of money was/is being spent outside the airline for consulting to tell the management inside the airline how to run the airline. It does not get any simpler than that as to where the root of the trouble lies.


Okie


User currently offlineDAYflyer From United States of America, joined Sep 2004, 3807 posts, RR: 3
Reply 2, posted (8 years 9 months 2 weeks 3 days 16 hours ago) and read 2481 times:

One lawyer at one of those firms was getting $850/hr. I'm obviously in the worng profession.


One Nation Under God
User currently offlineBlatantEcho From United States of America, joined Sep 2000, 1922 posts, RR: 1
Reply 3, posted (8 years 9 months 2 weeks 3 days 15 hours ago) and read 2451 times:

why would a Judge cut the pay of one person to give to another?

they earned their money, what's it to you?



They're not handing trophies out today
User currently offlinePresRDC From United States of America, joined Jul 1999, 664 posts, RR: 1
Reply 4, posted (8 years 9 months 2 weeks 3 days 15 hours ago) and read 2430 times:

Quoting LTBEWR (Thread starter):
The biggest biller: The law firm of Kirkland & Ellis, one of the largest law firms in the USA, who's fee application if for a whopping $93.7 Million alone. The top partner billed over 3.45 Million in fees alone, and the #2 lawyer is billing a breathtaking $5.5 Million alone, which works out to over 10,000 hours of work or 62.5 hours a week. Guess he didn't have much time for a life. Over 300 billing professionals at the firm worked on the case.
As a result of the work of such professionals, UA was able to cut expenses by $7 Billion and $13 Billion in debt. Of course, much of that $7 Billion was from the paychecks of the workers.
I hope the Judge cuts these fees by a significant amount and the money goes to the non-pilot and lower level pilots pay at UA.

Sorry to burst your "workers of the world unite" bubble, but this is what legal services from a top caliber firm cost. They type of firm you hire when your entire company is on the line. Is it a lot of money? Maybe, but let me assure that 62.5 hours a week for a law firm lawyer is not unusual.

How much should the fees be cut? What should K&E have billed? How many hours of work should go into a bankruptcy case? How many "billing professionals" should have worked on the case?

Since you're an obvious expert on these matters, I'm sure you have an answer to these questions. Or could it be that maybe, just maybe, you really have no idea what idea what you're talking about here? Nah, that couldn't be it . . .


User currently offlineAADC10 From United States of America, joined Nov 2004, 2103 posts, RR: 0
Reply 5, posted (8 years 9 months 2 weeks 3 days 15 hours ago) and read 2424 times:

Actually $335 million does not seem particularly high since the bankruptcy lasted around 3 years. Many other major company events such as IPOs, mergers and acquisitions often generate equally astronomical fees. If anything the fee was kept down because it had to be approved by the bankruptcy judge and the creditors.

User currently offlineLTBEWR From United States of America, joined Jan 2004, 13199 posts, RR: 15
Reply 6, posted (8 years 9 months 2 weeks 3 days 5 hours ago) and read 2331 times:

Actually I do work as a Legal Assistant for a huge (top 25 size) National law firm and I am aware of the astronomical billing rates for professionals in law firms. I am billed out at $190/hr for example as a senior legal assistant. I am aware of what good help costs, and the costs to run a large law firm, to attract the best people as to salary. I currently work on a very public lawsuit and the costs to our client, who wants the best attorneys for their money. A number of years ago, I worked on a fee application for a relatively small but complicated bankruptcy, so I do understand the process and how careful you have to bill. I also understand the need for top level legal advice, especially with such a complicated matter and a large company as UA is. My beef is that some law firms will look at such a matter and client as a huge profit making deep pocket and push perhaps the limits of decency in their fees. I would expect the bankruptcy judge will limit the amount that will be allowed in fees. I am quite sure K&E already made sure they 'billed enough' so if the fee application amount is cut, they still make big bucks.

User currently offlineNzrich From New Zealand, joined Dec 2005, 1524 posts, RR: 1
Reply 7, posted (8 years 9 months 2 weeks 3 days 5 hours ago) and read 2315 times:

Well its cheap considering the alternative Liquidation with all the jobs lost !!!


"Pride of the pacific"
User currently offlineN1120A From United States of America, joined Dec 2003, 26812 posts, RR: 75
Reply 8, posted (8 years 9 months 2 weeks 3 days 5 hours ago) and read 2308 times:

Quoting LTBEWR (Thread starter):
I hope the Judge cuts these fees by a significant amount and the money goes to the non-pilot and lower level pilots pay at UA.

I certainly hope not. UA was charged a completely reasonable rate based on the market for top level lawyers. If they wanted to save those expenses, they should have held out of Chapter 11, which would have been a lot better for them financially.



Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
User currently offlineLuv2fly From United States of America, joined May 2003, 12150 posts, RR: 49
Reply 9, posted (8 years 9 months 2 weeks 3 days 5 hours ago) and read 2304 times:

He charged United for 4,419 hours in the case, billing at a top rate of $850 an hour.

Quoting N1120A (Reply 8):
I certainly hope not. UA was charged a completely reasonable rate based on the market for top level lawyers.

PLEASE! No one is worth $850 an hour, most of the work was probably carried out by some low earning para-legal!



You can cut the irony with a knife
User currently offlineIrishpower From United States of America, joined Aug 2003, 386 posts, RR: 0
Reply 10, posted (8 years 9 months 2 weeks 3 days 5 hours ago) and read 2294 times:

Sometimes you have to take 2 steps backwards before you can take 10 steps forward. I don't know about the totals but UA needed the work of these lawyers in order to stay afloat!!!!

User currently offlineN1120A From United States of America, joined Dec 2003, 26812 posts, RR: 75
Reply 11, posted (8 years 9 months 2 weeks 3 days 5 hours ago) and read 2294 times:

Quoting Luv2fly (Reply 9):
PLEASE! No one is worth $850 an hour, most of the work was probably carried out by some low earning para-legal!

A partner at a major firm like that, yes they are worth that much. Para-legals, which are anything but low earning BTW, are billed for at a much lower rate than partners. In fact, there has been a trend for large businesses to demand more work done by partners because they think it is cheaper than done by associates when you factor time into it.



Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
User currently offlineGigneil From United States of America, joined Nov 2002, 16347 posts, RR: 85
Reply 12, posted (8 years 9 months 2 weeks 3 days 5 hours ago) and read 2290 times:

Quoting LTBEWR (Thread starter):
I hope the Judge cuts these fees by a significant amount and the money goes to the non-pilot and lower level pilots pay at UA.

He won't. The article never said that was even up for discussion.

N


User currently offlineJacobin777 From United States of America, joined Sep 2004, 14968 posts, RR: 59
Reply 13, posted (8 years 9 months 2 weeks 3 days 5 hours ago) and read 2277 times:

Quoting DAYflyer (Reply 2):
One lawyer at one of those firms was getting $850/hr. I'm obviously in the worng profession.

yah..me too...but when we started our investment company, one of our lawyers was charging us $600/hour..... crazy 

our corporate lawyer was charing us $250/hour expressionless 

a few times, we needed to have a meeting with both of them present....bringing our bill to $850/hour... dopey 

Quoting PresRDC (Reply 4):

Sorry to burst your "workers of the world unite" bubble, but this is what legal services from a top caliber firm cost

as mentioned above, I can personally attest to that.... yes 

Quoting Luv2fly (Reply 9):

PLEASE! No one is worth $850 an hour, most of the work was probably carried out by some low earning para-legal!

I agree..but that is how our society is....take it or leave it..



"Up the Irons!"
User currently offlinePresRDC From United States of America, joined Jul 1999, 664 posts, RR: 1
Reply 14, posted (8 years 9 months 2 weeks 2 days 17 hours ago) and read 2183 times:

Quoting LTBEWR (Reply 6):
My beef is that some law firms will look at such a matter and client as a huge profit making deep pocket and push perhaps the limits of decency in their fees. I would expect the bankruptcy judge will limit the amount that will be allowed in fees. I am quite sure K&E already made sure they 'billed enough' so if the fee application amount is cut, they still make big bucks.

In my law firm experience (which, thankfully, is now over), firms don't overcharge their clients. Why? Because the people revewing the bills at the client are sophisticated enough to spot it and doing so will end a relationship.

Unless you work at K&E and were involved in the UAL matter, you really have no basis on which to assert any opinion as to the legitimacy of their fees.


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