AMR fees climb to $70 million in bankruptcy case
June 29-- Weil Gotshal & Manges LLP, AMR Corp.'s lead bankruptcy law firm, has billed the insolvent parent of American Airlines $22.99 million for its services since AMR filed its Chapter 11 petition on Nov. 29, court records show.
The New York law firm, whose 1,200 lawyers are considered among the world's finest -- and, at $1,075 per hour, among the most expensive -- rang up nearly a third of AMR's estimated $70 million in legal and consulting fees through May, say documents filed in U.S. Bankruptcy Court for the Southern District of New York.
Hour by hour, nearly around the clock, AMR's bankruptcy expense meter is running -- almost certainly destined for $100 million by Labor Day, court documents show.
While representatives of Weil Gotshal & Manges, the other law firms and consultants, and AMR declined to comment on the costs of the bankruptcy, industry officials said the case's complexity and cost is due to AMR and American conducting business in more than 50 countries with hundreds of banks, insurance companies, vendors, suppliers, labor unions and government agencies.
AMR has retained more than a dozen law firms to assist with its bankruptcy restructuring, aircraft and airport leases.
The company also has hired tax advisers, labor consultants, auditors, special aircraft counsel, employee benefits advisers and management consultants.
On May 15, Weil Gotshal submitted its application for compensation and expenses at AMR's attorneys for the period Nov. 29 through March 31. The application showed 134 lawyers, professionals and paralegals worked on the case in the first three months, running up $15.28 million in fees and $410,893 in expenses.
The same day, May 15, AMR's special aircraft attorneys, Debevoise & Plimpton LLP, submitted its application for $13.39 million in compensation and $250,664 in expenses for its professional services between Nov. 29 and March 31.
The 100-page compensation applications and billing records submitted to the bankruptcy court became so voluminous that U.S. Trustee Tracy Hope Davis proposed to Bankruptcy Judge Sean Lane that a fee examiner be appointed to review the applications and determine whether they comply with the Bankruptcy Code, court rules and guidelines.
Davis recommended that Robert J. Keach be appointed as fee examiner.
Lane issued an order appointing Keach as fee examiner, at $490 per hour, on June 12.
Seven days later, Keach motioned the court for authorization to employ Bernstein Shur Sawyer & Nelson PA as counsel to the fee examiner "to assist fee examiner in his analysis of the fees and expenses of retained professionals ... provide another point of contact for the retained professionals, and augment the fee examiner's ability to properly and efficiently analyze a large volume of fee and expense requests within appropriate time frames."
"From the inception of these cases through May 21 ... it appears the retained professionals have submitted applications for fees and expenses in excess of $66 million."
Bernstein Shur Sawyer & Nelson's compensation is proposed to be $110 to $490 per hour, court documents show.
AMR Corp.'s top professional billings in May:
--Debevoise & Plimpton LLP, special aircraft counsel: $9.1 million
--Weil Gotshal & Manges LLP, lead bankruptcy attorneys: $3.06 million
--The Boston Consulting Group Inc., strategic consultants: $1.7 million
--The Garden City Group Inc., restructuring consultants: $1.57 million
--McKinsey Recovery & Transformation Services U.S. LLC, management consultants: $1.49 million
Source: U.S. Bankruptcy Court for the Southern District of New York
D.R. Stewart 918-581-8451
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