310
Well-known member
- Joined
- Aug 30, 2002
- Posts
- 199
Airline bankruptcy is bonanza for lawyers
The Associated Press
RALEIGH, N.C. (AP) - Unsecured creditors won't be paid the $115 million they are owed by bankrupt Midway Airlines, but lawyers and consultants have collected about $6 million so far in the case.
Documents filed in U.S. Bankruptcy Court show the lawyers and consultants have billed more than $6.8 million and final payments haven't been approved.
Midway's primary law firm - Kilpatrick Stockton - billed more than $2.7 million in fees and expenses.
Kilpatrick Stockton's lead local attorney, Gerald A. "Jeb" Jeutter, charged $395 an hour, and Al Lurey, based in the firm's Atlanta office, charged $450 an hour.
Seabury Advisors, the airline's financial consultant, had the second-highest total and collected more than $1.3 million, according to court officials.
Blank Rome LLP, the Philadelphia law firm that represented Midway's unsecured creditors, has billed Midway for $715,425. And accounting firm FTI Consulting, formerly PriceWaterhouseCoopers, has bills totaling $496,240.
The bills from the creditors' advisers are coming in even though more than 1,000 companies and individuals on the unsecured creditor list learned in October they wouldn't receive any of the approximately $115 million they were owed before Midway filed for bankruptcy in 2001.
Midway was ordered liquidated Oct. 30, and the company didn't have enough assets to pay the unsecured creditors any money.
Midway listed $318 million in assets when it filed for bankruptcy. The assets had dropped to about $20 million when it was ordered liquidated.
Included in claims against Midway was about $25 million in administrative expense, which federal rules require to be paid before other creditors get money.
Administrative claims are for services, products and work done after Midway filed for bankruptcy. They include a $8.6 million loan from US Airways, money owed for a computerized reservations system, financing for airliners and attorneys fees.
Court trustee Joseph Callaway, who is overseeing the liquidation, said he may ask some lawyers and consultants who have been paid to return some money to allow a fairer distribution.
Information from: News & Observer
The Associated Press
RALEIGH, N.C. (AP) - Unsecured creditors won't be paid the $115 million they are owed by bankrupt Midway Airlines, but lawyers and consultants have collected about $6 million so far in the case.
Documents filed in U.S. Bankruptcy Court show the lawyers and consultants have billed more than $6.8 million and final payments haven't been approved.
Midway's primary law firm - Kilpatrick Stockton - billed more than $2.7 million in fees and expenses.
Kilpatrick Stockton's lead local attorney, Gerald A. "Jeb" Jeutter, charged $395 an hour, and Al Lurey, based in the firm's Atlanta office, charged $450 an hour.
Seabury Advisors, the airline's financial consultant, had the second-highest total and collected more than $1.3 million, according to court officials.
Blank Rome LLP, the Philadelphia law firm that represented Midway's unsecured creditors, has billed Midway for $715,425. And accounting firm FTI Consulting, formerly PriceWaterhouseCoopers, has bills totaling $496,240.
The bills from the creditors' advisers are coming in even though more than 1,000 companies and individuals on the unsecured creditor list learned in October they wouldn't receive any of the approximately $115 million they were owed before Midway filed for bankruptcy in 2001.
Midway was ordered liquidated Oct. 30, and the company didn't have enough assets to pay the unsecured creditors any money.
Midway listed $318 million in assets when it filed for bankruptcy. The assets had dropped to about $20 million when it was ordered liquidated.
Included in claims against Midway was about $25 million in administrative expense, which federal rules require to be paid before other creditors get money.
Administrative claims are for services, products and work done after Midway filed for bankruptcy. They include a $8.6 million loan from US Airways, money owed for a computerized reservations system, financing for airliners and attorneys fees.
Court trustee Joseph Callaway, who is overseeing the liquidation, said he may ask some lawyers and consultants who have been paid to return some money to allow a fairer distribution.
Information from: News & Observer
