News from the Tennessee Valley Business
SUNDAY, JULY 15, 2007

No wage cut for Delphi’s lawyers

On the same day that UAW members voted for an agreement dropping their $27-per-hour Delphi wages to a maximum of $18 an hour, others working for Delphi did better.

U.S. Bankruptcy Judge Robert Drain on June 28 awarded $46.5 million in professional fees to lawyers and accountants for the four months ending Jan. 31.

In the last eight months, Delphi has had a burn rate of $362,000 per day on professional fees alone.

The lowest rates charged by lawyers at Fried, Frank, Harris, Shriver & Jacobson law firm, during the most recent four-month period, was $315 per hour. That was the rate charged by lawyers who had not passed the bar exam. A lawyer who passed the bar in 2005 charged $370 per hour.

$995 an hour

One of the Fried Frank lawyers charged $995 per hour; on average, its lawyers billed at $601 per hour. All told, the firm charged $2.7 million over four months.

At $12.8 million, Skadden, Arps, Slate, Meagher & Flom billed the most over the four-month period. It has already pocketed $43.8 million during the Delphi bankruptcy.

One of its lawyers, billing at $791 per hour, billed for an average of 9.2 hours per day, seven days a week, during the four-month period.

Another billed 21.5 hours in a single day, the same day one of her colleagues billed for 19.5 hours and another billed for 18.8. They all somehow found time to eat that day; Delphi picked up the tab.

In a single week, one lawyer billed 102 hours. He did not, at least, charge time-and-a-half for his overtime.

The most recent fee award was not an anomaly. In the four months ending Sept. 30, the court awarded professional fees of $40.4 million. Skadden Arps’ take was $10 million.

The expenditures do not engender goodwill among those whose wages are cut.

Greg DeMike, chairman of the UAW shop committee at Delphi’s Limestone County plant, said the numbers did not surprise him.

“Corporate America will spend any amount of money to do away with the middle class,” he said. “It’s a war on working people.”

Solutia fees

Professional fees for the Solutia bankruptcy are a comparative bargain. During the course of its bankruptcy, the company has spent a mere $165,000 per day in professional fees.

Solutia laid off many of its local employees when it closed down the Acrilan plant.

For the four months ending Nov. 30, U.S. Bankruptcy Judge Prudence Carter Beatty awarded $16.6 million in professional fees. During the course of the bankruptcy, professional fees payable by Solutia have totaled $128.5 million.

The winner in the Solutia sweepstakes is Kirkland & Ellis. It billed $4.8 million in the most recent period. During the course of the bankruptcy, its fees have reached $32.6 million.

For non-lawyer legal assistants, Kirkland & Ellis bills from $180 to $255 per hour. Its most expensive lawyer bills at $950; the least expensive is $295. On average, its lawyers bill $517 per hour.

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Eric Fleischauer
Capital considerations

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