Attorneys, bankers and consultants for Northwest Airlines Corp. won't receive right away all of the nearly $15 million in fees they sought for 3 1/2 months of work, a New York judge overseeing the carrier's bankruptcy said Tuesday.
Northwest Airlines, which filed for bankruptcy protection on Sept. 14, sought approval Tuesday to pay fees for attorneys, bankers and consultants involved in its bankruptcy case.
Judge Allan Gropper said he is holding back 20 percent of the fees, however, until a future date, drawing protests from attorneys at Cadwalader, Wickersham & Taft which billed the bankrupt airline $6.4 million for 15,347.4 hours of work.
Gropper told the court that 20 percent is "not an undue hardship" on attorneys making "millions of dollars" in this field. He added, "this is a bankruptcy case with thousands of people taking enormous cuts in salary and benefits."
The U.S. Trustee's office had asked the judge to reduce fees until the final resolution of the case. In court documents, the U.S. Trustee said "the results that will be achieved serve as an important factor in determining the success of the efforts of these applicants. Because these results are still unknown, the United States Trustee believes a percentage reduction is proper at this time."
Cadwalader's bill covers work as counsel for Northwest from Sept. 14, the day the carrier filed for bankruptcy protection, to Dec. 31. The law firm also asked to be reimbursed for $432,138.64 in expenses that include the cost of overtime meals, computerized research, court costs and transcript fees.
During that same period, Seabury Group, financial advisers for Northwest, charged the airline $1.4 million in fees and $67,628.00 worth of expenses, while Huron Consulting Group, accounting and restructuring consultants, billed the airline $1.015 million and $146,501.86 in expenses.
Meanwhile, the carrier was given until May 1 to provide extensive details of its assets and liabilities. Northwest had asked to be given until June 1 to do so. This detail will provide a better look at company's financial health.
Northwest has said it was driven to bankruptcy because of rising fuel costs and increased competition from low cost carriers. The carrier, which is based in Eagan, Minn., sought $1.4 billion in annual savings from its labor unions to compete with low-cost carriers and absorb higher fuel costs.
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