NEW YORK Jan 31 The cost of shepherding Lehman Brothers Holdings Inc through and beyond its record bankruptcy has surpassed $2 billion, as the former Wall Street investment bank prepares to make a third payment to creditors within three months.
The bank paid out more than $150 million in December to lawyers, advisers and managers, according to a court filing in U.S. Bankruptcy Court in Manhattan on Thursday.
A third round of payments to creditors will be made between March 25 and April 30, according to a separate filing on Thursday.
Lehman filed for Chapter 11 in September 2008 at the height of the financial crisis, entering what would become the largest bankruptcy in history.
The latest fees include more than $47 million to Alvarez & Marsal, which has managed the bank's assets during liquidation, and almost $11 million to Lehman's lead counsel, law firm Weil Gotshal & Manges.
All told, Alvarez & Marsal has collected approximately $627 million in fees since Lehman filed for bankruptcy, while Weil has received more than $454 million.
Professional fees in bankruptcy are public because they come out of the same pot of money used to pay creditors. Professionals are paid ahead of other creditors, so every dollar paid in fees is a dollar less that goes to creditors.
The U.S. Trustee Program, the Justice Department's bankruptcy oversight arm, is in charge of regulating spending in bankruptcy and helping to ensure maximum recoveries for creditors. The Trustee has taken a hard line of late on excessive fees, and is in the process of issuing new guidelines aimed at increasing disclosure requirements for fee-related expenses.
The case is In re Lehman Brothers Holdings Inc, U.S. Bankruptcy Court, Southern District of New York, No. 08-13555.