ltbewr
Posts: 12423
Joined: Thu Jan 29, 2004 1:24 pm

UA Bankruptcy-$335 Million In Fees!

Sat Mar 11, 2006 12:19 am

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
 
Okie
Posts: 3554
Joined: Wed Jul 16, 2003 11:30 am

RE: UA Bankruptcy-$335 Million In Fees!

Sat Mar 11, 2006 1:50 am

$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
 
DAYflyer
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Joined: Wed Sep 08, 2004 9:35 pm

RE: UA Bankruptcy-$335 Million In Fees!

Sat Mar 11, 2006 2:02 am

One lawyer at one of those firms was getting $850/hr. I'm obviously in the worng profession.
One Nation Under God
 
BlatantEcho
Posts: 1818
Joined: Wed Sep 27, 2000 10:11 am

RE: UA Bankruptcy-$335 Million In Fees!

Sat Mar 11, 2006 2:28 am

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
 
PresRDC
Posts: 512
Joined: Thu Jul 22, 1999 5:00 am

RE: UA Bankruptcy-$335 Million In Fees!

Sat Mar 11, 2006 2:46 am

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 . . .
 
AADC10
Posts: 1507
Joined: Sat Nov 13, 2004 7:40 am

RE: UA Bankruptcy-$335 Million In Fees!

Sat Mar 11, 2006 2:51 am

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.
 
ltbewr
Posts: 12423
Joined: Thu Jan 29, 2004 1:24 pm

RE: UA Bankruptcy-$335 Million In Fees!

Sat Mar 11, 2006 12:28 pm

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.
 
nzrich
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RE: UA Bankruptcy-$335 Million In Fees!

Sat Mar 11, 2006 12:48 pm

Well its cheap considering the alternative Liquidation with all the jobs lost !!!
"Pride of the pacific"
 
N1120A
Posts: 26468
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RE: UA Bankruptcy-$335 Million In Fees!

Sat Mar 11, 2006 12:59 pm

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
 
luv2fly
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RE: UA Bankruptcy-$335 Million In Fees!

Sat Mar 11, 2006 1:03 pm

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
 
irishpower
Posts: 371
Joined: Sun Aug 31, 2003 2:18 am

RE: UA Bankruptcy-$335 Million In Fees!

Sat Mar 11, 2006 1:07 pm

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!!!!
 
N1120A
Posts: 26468
Joined: Sun Dec 14, 2003 5:40 pm

RE: UA Bankruptcy-$335 Million In Fees!

Sat Mar 11, 2006 1:08 pm

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
 
gigneil
Posts: 14133
Joined: Fri Nov 08, 2002 10:25 am

RE: UA Bankruptcy-$335 Million In Fees!

Sat Mar 11, 2006 1:11 pm

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
 
jacobin777
Posts: 12262
Joined: Sat Sep 11, 2004 6:29 pm

RE: UA Bankruptcy-$335 Million In Fees!

Sat Mar 11, 2006 1:18 pm

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!"
 
PresRDC
Posts: 512
Joined: Thu Jul 22, 1999 5:00 am

RE: UA Bankruptcy-$335 Million In Fees!

Sun Mar 12, 2006 1:19 am

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.