Skadden claws back fees from US bakery

Skadden Arps Slate Meagher & Flom is to receive $4.47m (£2.5m) in fees from US wholesale bread and cake distributor Interstate Bakeries Corp following a ruling by the judge overseeing the company’s reorganisation.

Judge Jerry Venters, a US bankruptcy judge, has ruled that the firm should receive the payment for work completed between January and April 2005 as Interstate Bakeries’ lead legal adviser. This is in addition to a similar payment of $3.85m (£2.2m) approved in March for work completed from September to December 2004.

The ruling on the fee payment comes as part of regularly scheduled hearings for Kansas City-based Interstate Bakeries, which makes the Twinkies, Ding Dongs and Ho Hos brands. It filed for Chapter 11 bankruptcy protection last September.

Skadden is now expected to file a third interim application in October for the payment of further legal fees and expenses.

As part of the latest ruling, 12 other financial and legal advisers to Interstate Bakeries and its creditor and equity committees will share the payment of a further $3.45m (£2m) for their work earlier this year.

This includes Interstate Bakeries’ equity security holders’ committee’s legal advisers Sonnenschein Nath & Rosenthal, which has been assigned $559,184 (£315,517) for work completed between November 2004 and April 2005.