Detroit runs up $13.7M bill in first 75 days of bankruptcy case
Downtown Detroit. Image from Shutterstock.
The $13.7 million bill for legal fees, other professional fees and expenses that the city of Detroit ran up during the first 75 days of its record-breaking municipal bankruptcy case was “substantial,” a court-appointed examiner said in a quarterly report.
However, the expense was also necessary, according to Robert M. Fishman, given the scope of the case, which is the largest municipal bankruptcy ever and operating on a fast track, reports Reuters.
“Due to the magnitude and complexity of the case, the novelty of the legal issues, the extremely tight time frames imposed by the court and the strong differences in opinion between the various parties about what to do and how to do it, it was (and continues to be) inevitable that the costs associated with the services provided by the various professionals were going to be significant,” said Fishman in the report.
The $13.7 million included $11.4 million in fees, and the largest component of that amount, $6.59 million, was charged by Jones Day, the city’s law firm, whose top lawyers are billing their time at $1,000. The firm also charged the city for around $348,000 in expenses, Reuters reports.
The $13.7 million bill covers a two-and-a-half-month period beginning July 18, when the city made its Chapter 9 bankruptcy filing to deal with some $18 billion in debt, as well as other liabilities. The bill has undoubtedly grown since then, the news agency notes.
See also:
ABAJournal.com: “Detroit bankruptcy brings business to multiple law firms”
ABAJournal.com: “Federal judge OKs Detroit bankruptcy, says city can cut pensions for retirees”
