Lehman fees squeeze

German firm CMS Hasche Sigle poised to set a new high in insolvency fees


It’s no secret that while the collapse of a big company is a disaster for many employees law firms often do quite well out of it. As The Lawyer reported last year, legal fees of over £100,000 were racked up in just six weeks for the Comet administration while Weil Gotshal & Manges has billed more than £15m on the MF Global UK administration.

But CMS Hasche Sigle in Germany may be about to break all records for insolvency fees. The firm has been acting for the administrators of Lehman Brothers in Germany since November 2008.

The team, led by partner Michael Frege, has so far billed €70m (£58.8m) for its work, which has returned €15bn to the estate, but according to a report by Ulrich Keller of the Berlin School of Economics and Law, the final figure could reach €800m.

To put that into context, Weil was the biggest biller on the US insolvency proceedings for Lehmans, billing $383m (£244m). CMS Hasche Sigle’s 2011 turnover was, according to German trade magazine JuVe, €226m.

Under local insolvency rules the fees will have to be approved by the court managing the process in Frankfurt and Lehmans creditors may well lodge objections if the bill is as high as some are predicting.

CMS Hasche Sigle managing partner Hubertus Kolster says costs have reached “about” €200m, adding: “What they will reach depends on the complexity and volume of further tasks.”

Given that more than 100 people are occupied on the job €200m is probably good value, but €800m? That is yet to be determined.