MF Global Holdings Ltd.’s lawyers and advisers shouldn’t get all of the $13.7 million in fees they’ve requested, as their billing was vague, repetitive, or improper, the U.S. said.
The U.S. Trustee, a bankruptcy watchdog for the Justice Department, objected to fees and expenses submitted by eight parties in the bankruptcy of the failed broker-dealer in papers filed today in Manhattan bankruptcy court. Together, the eight parties seek $13.7 million in fees and $387,922.13 in expenses for Oct. 1, 2012, through Jan. 31, 2013.
Morrison & Foerster LLP, the company’s main bankruptcy counsel, Proskauer Rose LLP, counsel to creditors, and Freeh Group International Solutions, LLC, an accountant for the company’s bankruptcy trustee Louis Freeh, were included in the objection.
Morrison Foerster charged the estate from $342.00 to $400.00 an hour for the services provided by “Trainee Solicitors,” who should have had lower billing rates commensurate with the company’s non-attorney employees, said lawyers for Tracy Hope Davis, the acting U.S. Trustee.
Davis also objected to $52,278.50 billed by Proskauer, saying that time records showed the work was revising billing statements and reviewing time entries -- services that are “part of Proskauer’s overhead, and thus are not compensable.”
Davis also said expenses including Freeh Group’s bill for $4,163.29 in reimbursement for airfare for an American Airlines flight from an unknown departure in the U.S. to London and an overnight stay at the Chancery Hotel in London costing $632.74 need to be more detailed to show if they are reasonable.
Covington & Burling LLP, insurance counsel to Freeh, FTI Consulting Inc., a restructuring adviser, Garden City Group, Inc., an administrative agent, Pepper Hamilton LLP, special counsel to Freeh and Capstone Advisory Group, financial adviser to the creditors’ committee were the other parties whose fee requests should be reduced or more fully documented, the U.S. Trustee said.
MF Global Holdings won final approval of its plan to repay creditors on April 5, paving the way for the eighth-largest bankruptcy in U.S. history to wind down under court protection.
The parent company of brokerage MF Global Inc. filed for bankruptcy on Oct. 31, 2011, after a wrong-way $6.3 billion trade on its own behalf on bonds of some of Europe’s most indebted nations. The company, once run by former New Jersey Governor and Goldman Sachs Group Inc. Co-Chairman Corzine, listed assets of $41 billion and debts of $39.7 billion.
The holding company’s Chapter 11 case is In re MF Global Holdings Ltd., 11-15059, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The liquidation of the broker is In re MF Global Inc., 11-02790, in the same court.