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Bankruptcy Case Studies

  • Detroit Bankruptcy Firms File Statements Justifying Hefty Price Tag Volume 5, Issue 1 On January 16, the law firms involved in the city of Detroit’s bankruptcy filings, lead among them Jones Day and Dentons US LLP, filed disclosure statements defending the multi-million dollar fees charged to the city over the life of the case. This Chapter 9 bankruptcy (the statute under which municipalities, rather than ...
  • 23% of Charges in Filene’s Basement Bankruptcy Sample Found to be Objectionable (Volume 1, Issue 16) On May 4, 2009, Filene’s Basement Inc. (Filene’s Basement) filed for Chapter 11 Bankrupcy Protection in preparation for a sale. It marked the second time in 10 years the company had sought bankruptcy protection. The filing came on the heels of a 9.5 percent drop in sales in the 2008 fiscal year. ...
  • Over 63% of Dodgers’ Bankruptcy Billing Sample Found to be Objectionable (Volume 1, Issue 15) On June 27, 2011, the Los Angeles Dodgers (“Dodgers”) filed for chapter 11 bankruptcy. In March 2011, Forbes magazine ranked the Dodgers as the world’s thirty-eighth most valuable sports team, valued at $800 million. The bankruptcy has generated millions of dollars in legal fees, a large portion of which, arguably, should not ...
  • Over $500,000 in Objectionable Charges Found in Nortel’s Bankruptcy Billing Sample (Volume 1, Issue 14) Nortel Networks, Inc., a Canadian telecommunications equipment maker, filed for bankruptcy in both Canada and the U.S. in January 2009. Sterling Analytics, a legal cost consulting group, has analyzed a sample of Nortel’s legal billings filed during the bankruptcy. Of the $1,340,606.74 in legal bills reviewed, $575,423.24 was found to represent objectionable ...
  • Over 25% of Borders’ Bankruptcy Billing Sample Found to be Objectionable (Volume 1, Issue 13) Borders Group, Inc. was a national chain of physical and Internet based book distributors. As a result of its months of missed vendor payments and declining sales, along with $1.29 billion dollars in debts (compared with $1.27 billion in assets), Borders declared chapter 11 bankruptcy in February 2011. Sterling Analytics Group, a ...
  • General Growth’s Bankruptcy Billings Contain Large Amounts of Multiple Attorneys Charging for the Same Meetings (Volume 1, Issue 12) General Growth Properties is a publicly traded real estate investment trust that owns, develops and operates regional shopping centers across the United States. As a result of its $27.3 billion debt and failed attempts to bargain with creditors, General Growth filed for Chapter 11 bankruptcy in April 2009. Sterling Analytics Group, a ...
  • Over 75% of CIT Group’s Bankruptcy Billings Found to be Objectionable (Volume 1, Issue 11) CIT Group Inc. is a bank holding company, providing lending, advisory, and leasing services to small and middle market businesses. In November 2009, CIT filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court in the Southern District of New York. Sterling Analytics Group, a legal cost consulting firm, reviewed CIT’s total ...
  • Lyondell Chemical Bankruptcy Bills Contain Multiple Attorneys Attending Meetings, Impermissible Task Descriptions and Overhead Charges (Volume 1, Issue 10) In January 2009, one of the largest U.S. chemical companies, Lyondell Chemical Company, filed for chapter 11 bankruptcy.  The company emerged 16 months later as LyondellBasell Industries, now a Swiss based company. During the bankruptcy the attorneys for Lyondell requested over $7.8 million in attorneys’ fees and expenses.  Sterling Analytics, a legal ...
  • Approximately Half of A&P’s Bankruptcy Billings Sample Found to be Objectionable (Volume 1, Issue 9) Great Atlantic and Pacific Tea Company, Inc. is one of the nation’s first supermarket chains. On December 12, 2010, A&P filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court in the Southern District of New York. Sterling Analytics Group, a legal cost consulting firm, has reviewed some of the legal bills incurred ...
  • More Than Half the Charges Submitted in Bally Bankruptcy Fee Petition Found to be Objectionable (Volume 1, Issue 8 ) In December 2008, Bally Total Fitness filed for bankruptcy in the Southern District of New York. The law firm of Curtis, Mallet-Prevost, Colt and Mosle, LLP (“Curtis”), served as Conflicts Counsel for the debtors in the case. In total, Curtis submitted two fee applications amounting to $1,332,178.40. After reviewing Curtis’ first ...
  • Review of Calpine Bankruptcy Legal Fees Finds Numerous Objectionable and Inconsistent Charges (Volume 1, Issue 7) In December of 2005, Fortune 500 power company, Calpine Corporation, filed for chapter 11 bankruptcy.  After a little over two years Calpine emerged from the restructuring in January 2008. During the bankruptcy, the law firm for the creditor committee requested over $20 million in legal fees and expenses. Of this total, Sterling ...
  • Review of Blockbuster Bankruptcy Billings Reveals 36.97% in Objectionable Charges (Volume 1, Issue 6) In September 2010, Blockbuster, Inc. filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York. Sterling Analytics Group, a legal cost consulting firm, reviewed $564,185 in legal billings submitted in the fee petitions to the Court for compliance with ethical standards and legal precedent. Of ...
  • Audit of Chrysler Bankruptcy Legal Fees Reveals Various Objectionable Charges (Volume 1, Issue 5) On April 30th, 2009, America’s third largest automotive company, Chrysler, filed for chapter 11 bankruptcy. The restructuring was primarily completed 42 days later—although the proceeding continued to April 2010—when an agreement was reached with Fiat to take control of the company. The bankruptcy was widely publicized due to the large impact on ...
  • Legal Bills Submitted in Delta Bankruptcy Contain Large Amounts of “Improper” Block Billing (Volume 1, Issue 4) In September 2005, Delta Air Lines filed for chapter 11 bankruptcy. After 19 months, a reorganization plan was agreed upon in April 2007. Through the course of the bankruptcy, considerable amounts of attorneys’ fees were accumulated.  Sterling Analytics, a legal cost consulting firm, audited a sample of the attorneys’ fees submitted from ...
  • Nearly Half of the Fees in WaMu Bankruptcy Billing Sample Found to be Objectionable (Volume 1, Issue 3) On September 26, 2008, Washington Mutual (WaMu) filed for chapter 11 bankruptcy.  At over $300 billion in assets, WaMu is the 2nd largest bankruptcy in U.S. history (filed 11 days after the largest, Lehman Brothers). The case has generated over $400 million dollars in fees with ongoing litigation battles. Sterling Analytics, a ...
  • 61% of the Fees Examined in GM Bankruptcy Found to be Objectionable (Volume 1, Issue 2) On June 1st, 2010, America’s largest automobile company, General Motors, filed for bankruptcy. Debtor-in-Possession financing was granted by the US Government, and within 2 weeks the profitable assets, including intellectual property, were transferred to a new LLC “New GM” and the US Government (hereafter referred to as GM). What received less publicity ...
  • Lehman Brothers Bankruptcy Racks Up Legal Fees Filled With “Improper” Charges (Volume 1, Issue 1) On September 15, 2008, Lehman Brothers filed for chapter 11 bankruptcy.  With over $600 billion in assets Lehman Brothers is the largest bankruptcy in United States history. The bankruptcy involved numerous law firms and racked up hundreds of millions in attorneys’ fees. Many of these fees included improper billing practices that arguably ...