** Enron’s legal and administrative fees will reach over $ 1,000,000,000**
Fees due attorneys and accountants = $ 1,000,000,000 Paid in full up front.
Reimbursments to creditors and stockholders who are owed more than 60,000,000,000 @ .16 on the 1.00 = 9,600,000,000
To be paid at the discretion of the court.
[ Report]
… the first filing was under the name of the obscure Enron Metals & Commodity Corp., a metal-trading business with 55 employees and one-half of 1 percent of Enron’s assets. Why? Because it was headquartered in the jurisdiction of New York’s Southern District Bankruptcy Court, which is one of the nation’s more prominent calm harbors against storms of angry employees, creditors, federal regulators and politicians. Delaware and Chicago enjoy similar pro-company reputations.
Part of the attraction of the New York district, some lawyers say, is its demonstrated willingness to let a bankrupt company hire vast armies of lawyers.
“When the Texas attorney general’s office sought to transfer the Enron bankruptcy case to Houston, where it belonged, one of the reasons for the request was the fact that professional fees seem to soar out of control in cases in New York and Delaware,” said Texas Attorney General Greg Abbott.
**“Everyone agrees that the professional fees in the Enron case are in the stratosphere.” **
Lynn LoPucki, a bankruptcy professor at the University of California at Los Angeles law school who studies professional fees, said Enron has gotten favorable rulings that allowed chief executive Ken Lay to help pick his successor- Stephen Cooper, who denied requests to appoint an independent trustee to run the company; and, of course, granted Enron almost complete freedom to hire as many well-paid professionals as it deemed necessary.
**Judges, he said, don’t want to upset companies or the law firms that handle the big bankruptcies. To do so would likely draw future bankruptcies (and the attendant fees) to other judicial districts, where the local lawyers would get the spoils. And local bar associations’ recommendations play a significant role in the appointment of federal bankruptcy judges to their 14-year terms.
“You don’t bite that hand that feeds you,”** LoPucki said.** “A judge whose rulings lose the next 10 big cases to other places won’t get reappointed.”**
- (Welcome freemen, to the happy wacky world of attorneys.)*