DETROIT (Reuters) - Detroit has paid almost $23 million in fees to lawyers, consultants and financial advisers through October 1, including nearly $11 million to law firm Jones Day, which is representing the city in bankruptcy court, according to figures released by Detroit Emergency Manager Kevyn Orr’s office on Wednesday.
Detroit, which is awaiting a decision from a federal bankruptcy judge to determine if it is eligible for bankruptcy protection, has agreed to pay more than $60 million to more than a dozen firms aiding in its restructuring efforts, Orr’s office said.
Through October 1, the city has paid $4.59 million to Conway MacKenzie, a Detroit area restructuring firm, and $4.17 million to accounting firm Ernst & Young.
Accounting firm Plante Moran was paid $1.5 million through October 1 and investment banking firm Miller Buckfire was paid $1.2 million.
The city’s contracts could be amended as Detroit’s bankruptcy case moves forward, said Bill Nowling, Orr’s spokesman. Several of Detroit’s agreements were previously amended. Conway MacKenzie was initially slated to be paid $4.2 million but it now will be paid $19.3 million. Jones Day’s initial contract was for $3.35 million, but has since been amended to $18 million.
Jones Day was retained as the city’s lead attorneys in April, and Orr resigned from the firm in March before assuming his current role as emergency manager.
Orr has diverted $95 million earmarked for unsecured bond debt and pension payments to Detroit’s restructuring initiatives, which include funds for improvements to public safety, according to local media reports.
The city first missed bond payments in June to divert funds to the restructuring efforts.
The state of Michigan has said it will contribute at most $5 million toward Detroit’s restructuring costs, local media reported, which angered Detroit Mayor Dave Bing and the Detroit City Council who said the state agreed to pay half of some of the city’s costs.
Detroit, which has $18.5 billion in debt, filed the largest municipal bankruptcy in U.S. history on July 18.
Reporting by Joseph Lichterman; Editing by Phil Berlowitz
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