Aug 22 The judge overseeing Energy Future
Holdings' massive bankruptcy appointed a committee to review the
fees of lawyers and other professionals in the case.
Law firm Godfrey & Kahn, which advised a fee committee in
the bankruptcy of Lehman Brothers, the largest and most
expensive Chapter 11 filing in history, will advise a similar
four-member committee in Energy Future's case, according to an
order signed by Judge Christopher Sontchi on Thursday in U.S.
Bankruptcy Court in Delaware.
Energy Future, the former TXU Corp, declared bankruptcy in
April to restructure more than $40 billion in debt, making it
among the largest-ever Chapter 11 cases. The army of financial
advisers and high-priced, specialized restructuring lawyers from
top-level firms like Kirkland & Ellis and Morrison & Foerster
will make the case an expensive one.
Energy Future's estate will also be responsible for the fees
of its official creditors' committee, and potentially other
In bankruptcy, where the goal is to maximize recoveries for
creditors, professional bills are publicly filed, heavily
scrutinized and subject to court approval.
The most sought-after bankruptcy lawyers charge more than
$1,000 an hour, sometimes creating a perception in restructuring
circles that lawyers have no incentive to move cases along
quickly. The U.S. Trustee Program, the Justice Department's
bankruptcy watchdog, rolled out new guidelines last year for how
lawyers in big bankruptcy cases should report their fees to
It is common practice in large and complex cases like Energy
Future's to appoint a committee or examiner to review monthly
fee statements, work with parties to reduce costs, make
recommendations to judges on whether to approve fees and object
to fees they believe are unnecessary.
Energy Future's committee will include four members: one
each chosen by the company, its creditors' committee and the
U.S. Trustee, and one independent member.
(Reporting by Nick Brown; Editing by Dan Grebler)