Court steps in as Enron fees spiral

Lawyers’ fees related to the Enron Chapter 11 reorganisation are continuing to snowball, sparking fears of dwindling returns to disgruntled creditors

The latest tally shows that the cost of the 23 firms acting for Enron and unsecured creditors has now reached $174m (£110.8m). The running total of professional fees on Enron is $237m (£150.9m).

Enron’s lead adviser Weil Gotshal & Manges has so far notched up $53.5m (£34.1m) from the case, $49m (£31.2m) of which is made up of fees with $4.5m (£2.9m) of expenses, more than double the figure racked up by the second biggest biller Milbank Tweed Hadley & McCloy.

Milbank Tweed’s latest invoice, submitted on 14 November, brings the firm’s total fees to a massive $24.2m (£15.4m), including $2.2m (£1.4m) worth of expenses.

Last week, a court-appointed committee called for $58m (£36.9m) worth of fees submitted by 10 law firms at initial stages of the case to be reduced, after concerns about inaccuracies in the bills.

Weil Gotshal and Milbank Tweed have been singled out to have their fees reduced by 3.2 per cent and 5.2 per cent respectively.

Despite the fact that Enron filed for bankruptcy a year ago, the overall value of its estate has not yet been determined, leaving creditors in the dark about how much they are likely to recover once the advisers have been paid off.

There are concerns that professional advisers are heading towards a combined bill of more than $300m (£191m), which would seriously erode the value of assets owed to creditors.