In any large bankruptcy proceeding, there is a windfall to be made by lawyers, accountants, and consultants. The AMR bankruptcy case is obviously no exception.
American Airlnes may be notifying thousands of its employees about pending layoffs, and wrangling unilateral contract concessions from its pilots, but lawyers and consultants working on parent company AMR Corp.’s bankruptcy proceeding are doing just fine.
In the latest payout for professional services, endorsed September 21, the bankruptcy court ordered AMR Corp. to shell out $40.1 million in fees and expenses for the billing period November 29, 2011, through March 31, 2012, to 19 professional services firms.
The ranks of the top 10 earners included five law firms, three consulting outfits, and two financial services companies.
The top three winners were law firms: Weil, Gotshal & Manges, the lead bankruptcy counsel, picked up $11.8 million in fees and more than $407,000 in expenses; Paul Hastings LLP, which worked on the gutting of the pilots contract, took in nearly $6 million in fees, and more than $301,000 in expenses; and Skadden, Arps, Slate, Meagher & Flom, the lead counsel for the unsecured creditors committee, enriched itself with more than $4.5 million in fees, plus in excess of $174,000 in expenses.
But, don’t feel sorry for the consultants, including The Boston Consulting Group, which apparently is still earning its bread — or nearly $3.5 million in fees — figuring out how to restructure American Airlines management.
Meanwhile, McKinsey Recovery & Transformation Services U.S., which provides consulting expertise on bankruptcy restructuring, took in $1.9 million in fees and and was awarded an expense tab of almost $174,000. And, Bain & Company, which handles American Eagle and labor matters, was awarded fees of $1.3 million and more than $52,000 in expenses.
If it’s any solace to angry employees, and it won’t be much consolation, the suits at the 19 firms had to wait more than four months for the court’s payment order as they submitted their applications for payment around May 15.
Here’s a chart showing this most recent payout to the top 10 earners for the period November 29, 2011, through March 31, 2012:
|Company||Fees payable||Expenses awarded|
|Weil, Gosthal & Manges||$11,827,180||$407,113|
|Paul Hastings LLP||$5,986,088||$301,428|
|Mesirow Financial Consulting||$3,726,612||$122,391|
|Boston Consulting Group||$3,465,599||N/A|
|McKinsey Recovery & Transformation||$1,927,025||$173,898|
|Bain & Company||$1,312,500||$51,684|
|Groom Law Group||$1,171,965||$34,443|
|Ernst & Young||$781,083||$13,985|
|Togut, Segal & Segal||$664,853||$5,723|