GM charged $24M in bankruptcy fees

[SVT666]

GM charged $24M in bankruptcy fees
10/26/2009, 3:55 PMBY DREW JOHNSON

 


The United States Treasury Department may be capping compensation given to General Motors? top executives, but the firm that handled the automaker?s bankruptcy case doesn?t appear to be in line for any pay cuts. AP Services LLC has sent the old General Motors a bill for $23 million for its role in the company?s bankruptcy filing.

AP Services ? headed by Al Koch ? has billed the old GM $23 million for about 90-days of work on the automaker?s bankruptcy case. Koch also holds the position of chief restructuring officer of GM?s bankruptcy estate.

In total, 153 AP Services employees worked on the GM bankruptcy case, with several charging up to $835 per hour. Koch was the top earner, taking home $455,000 for his three months of work, according to The Detroit News.

GM?s bill could have been higher, though, as the U.S. Justice Department forced AP Services to lower their hourly rates in July amid fears that there would not be enough cash leftover to pay GM?s outstanding claims.

AP Services is still awaiting U.S. Bankruptcy Judge Robert Gerber to sign off on the fees. Judge Gerber will field objections to the fees until November 12th.

[ifcar]

I wonder if they overcharged intentionally expecting to only get a fraction of the bill, or if that's right in line for the amount of work they did.

[Tave]

Uh, it sounds like GM got a discount, Iffy.

[ifcar]

Uh, it sounds like GM got a discount, Iffy.

But was GM being overcharged initially under the expectation that whatever amount they asked for would be cut?

[GoCougs]

Yeah, no kidding a bargain. GM had sales of $150B in 2008. Imagine the paperwork of such a mammoth.undertaking.

[Colonel Cadillac]

But was GM being overcharged initially under the expectation that whatever amount they asked for would be cut?

They weren't under the expectation that the amount they asked for would be cut. The Justice Department did that. I think I remember reading Lehman bankruptcy lawyers being paid $950 or more, but I imagine that is a considerably more complex bankruptcy than GM's.

[TBR]

Per the norm, the pundits will be bitching about this, somehow thinking that different rules should apply for a government owned corporation versus a publicly owned one.

[3.0L V6]

That is an ultimate deal for a bankruptcy case. As a comparison, the bankruptcy of Nortel, a much smaller company, will probably run for about $1 billion.

[S204STi]

Holy shit, were these CPAs who were charing over $800 an hour?

[TBR]

Holy shit, were these CPAs who were charing over $800 an hour?

Lawyers.

[J86]

Lawyers.

get me in on that!

[TBR]

get me in on that!

Corporate bankruptcy law doesn't seem like any fun at all to me.

[3.0L V6]

Corporate bankruptcy law doesn't seem like any fun at all to me.

Maybe, but the job is recession proof and there's usually no shortage of work.