Sep. 12--Two law firms involved with Northwest Airlines' bankruptcy case were denied end-of-case bonuses Tuesday, with a judge deciding that the hourly rates they were paid had already provided fair compensation.
Judge Allan Gropper of the U.S. Bankruptcy Court for the Southern District of New York rejected a request for $3.5 million in fees by Cadwalader, Wickersham & Taft LLP, which represented Northwest during its bankruptcy. Otterbourg, Steindler, Houston & Rosen PC, which represented creditors in the case, was also denied $700,000 in bonuses.
Requests for additional fees by two other law firms representing creditors are still under review. FTI Consulting Inc. asked that Northwest pay an extra $1.5 million in fees. Lazard Freres & Co. asked for $3.25 million.
Gropper said the law firms' average rates of about $500 an hour provided adequate pay. Gropper said that for the attorneys to deserve fee enhancements, their work should have a remarkable result that couldn't be expected from lawyers being paid regular fees.
Northwest Airlines spokesman Dean Breest said the carrier had no comment. The law firms requesting extra fees also didn't return calls seeking comment.
The AFA-CWA, which represents Northwest Airlines flight attendants, objected to the bonuses. Attendants said professional service fees had soaked up a significant portion of lost wages and benefits for Northwest employees.
"If AFA-CWA had not objected today, more millions of dollars of our concessions would have been wasted on these outrageous fees," Kevin Griffin, Northwest's AFA-CWA Master Executive Council president, said in a statement.
The Cadwalader and Otterbourg firms, along with 22 other law firms and advisers involved in the bankruptcy, got approval for regular fees and expenses.
Gropper approved a total bill of $118.8 million in fees and $5.4 million in expenses.
The Associated Press contributed to this report.
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