Proskauer, Dewey victorious on MF Global fees case
Proskauer Rose and legacy Dewey & LeBoeuf have seen off a challenge to the level of fees they have charged for their work on the MF Global administration. Last week, lawyers acting for the defunct broker filed an objection to fees totalling $8.8m (£5.6m) being charged by the two firms on the high-profile administration, labelling them "excessive".
October 30, 2013 at 12:52 PM
3 minute read
Proskauer Rose and legacy Dewey & LeBoeuf have seen off a challenge to the level of fees they have charged for their work on the MF Global administration.
Last week, lawyers acting for the defunct broker filed an objection to fees totalling $8.8m (£5.6m) being charged by the two firms on the high-profile administration, labelling them "excessive".
But US bankruptcy judge Martin Glenn ruled in favour of the firms after Proskauer restructuring partners Irena Goldstein, Martin Bienenstock and Michael Kessler filed a response to the objection.
The objection, raised by Jones Day restructuring partner Bruce Bennett, had called for Proskauer to reduce its fee from $5m (£3.1m) to $3.25m (£2m) and Dewey to drop its request from $3.75m (£2.3m) to $3m (£1.9m).
Bennett, who is acting as counsel to MF Global Holdings, had recommended the court appoint a fee examiner to determine how much the firms should be paid.
The objection was supported by MF Global Holdings board member Daniel Ehrmann, who said Proskauer and Dewey "spent an impertinent amount of time monitoring the foreign insolvency proceedings of the debtors' affiliates" in the UK.
Proskauer's response, submitted to the Southern District of New York bankruptcy court, was that the objection failed to "state a claim, even putting aside that it is founded on misstatements and half-truths".
Proskauer said that the objection was "based solely upon the word of [Ehrmann]", who was not involved in proceedings before his appointment and was "writing revisionist history to fit the objection".
The court has subsequently approved the final applications and overruled the objection in its entirety.
London-based Proskauer partner Mark Fennessy and of counsel Mark Griffiths, both of whom transferred from Dewey after the law firm collapsed in May 2012, had been named in the subsequently dismissed objection, which alleged that Fennessy and his team submitted an "excessive" billing application during the bankruptcy proceedings. The dismissal states that prior to some of the funds tied up in the UK being repatriated to the US the case was at "near loggerheads".
It continues: "The fees in this case have been very high and it's not just in this case…some people would say it reflects the complexity and necessity of the work that lawyers perform in cases such as MF Global."
"I think the result in both the SIPA case and the Chapter 11 case is under the circumstances is turning out to be reasonably good. I think the professionals' work is to be applauded for getting to that."
MF Global filed for bankruptcy in the US and UK in October 2011. The derivatives broker was subjected to a series of regulatory sanctions and credit downgrades in light of $6.3bn of investments made in European sovereign debt and increased trading risk.
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