Enron has seen its pre-bankruptcy average monthly spend of around $3m (£2.1m) a month soar to a massive post-bankruptcy amount of $8m (£5.7m), while ex-employees have been offered a relief fund of just $5m (£3.5m) to be shared among them.
Anthony Huang, executive director and spokesman for enronX.org, an organisation representing former Enron employees, said: “In a time of disaster, opportunists surface and seek to make money off the pain and devastation of others. It's the American way.” He added that he thought it unlikely that restructuring would resurrect the company.
The firm leading Enron's restructuring, Weil Gotshal & Manges, accounts for at least two-thirds of the $8m billed to Enron by its various law firms in December. The New York giant claimed more than $5m for its services, according to court documents filed last month.
A rough breakdown of Weil Gotshal's bill includes an hours total of 9,896 for the 150 or so fee-earners handling Enron matters. Senior partner Ira Millstein and partners James Quinn and Thomas Roberts scored the highest chargeout rate at $700 (£495) an hour. Partner Brian Rosen, working an average of 12 hours each day, billed 361 hours at $630 (£446) an hour. His services cost Enron around $227,000 (£160,700).
The general consensus among lawyers is that quality costs money. One former Weil Gotshal partner said the firm was widely regarded as the premier bankruptcy practice in the US.
In addition to Weil Gotshal, the other US firms with their meters running are Andrews & Kurth, Cadwalader Wickersham & Taft, LeBoeuf Lamb Greene & MacRae and Togut Segal & Segal. There is a number of other firms which have yet to submit their bills.
Law firms go straight to the front of the creditors' queue in bankruptcy cases. In January, US bankruptcy judge Arthur Gonzalez committed Enron to paying 80 per cent of its legal fees claims immediately, giving creditors time to challenge the fees before the firms chase the outstanding 20 per cent. Last week he refused to grant Enron's request to use insurance proceeds to pay legal costs.
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