Judge denies $4.2 million in bonuses for NWA bankruptcy lawyers (thanks CWA!)

[Omaha Steve]

http://blogs.usatoday.com/sky/2007/09/nwa-case-bonus.html

By Ben Mutzabaugh

Lawyers from two law firms that helped Northwest with its Chapter 11 bankruptcy case were denied in their requests for hefty end-of-case bonuses. Judge Allan Gropper of the U.S. Bankruptcy Court said the lawyers' average rates of about $500 an hour had already provided adequate compensation, The Associated Press reports. "Gropper said that for the attorneys to deserve a so-called fee enhancement, their work should have a remarkable result that couldn't be expected from lawyers being paid their regular fees," AP writes.

Cadwalader, Wickersham & Taft, Northwest's lead firm on the case, had been seeking $3.5 million in bonuses. A law firm representing creditors, Otterbourg, Steindler, Houston & Rosen, was hoping for a $700,000 bonus, according to AP. The judged ruled on the bonuses after the AFA-CWA flight attendants union and a "creditor-turned-shareholder" objected. The groups claimed the bonuses were unjustified, pointing to the airline's 22% drop in share price since it emerged from bankruptcy. That, the groups argued, did not constitute a remarkable result.

"If AFA-CWA had not objected today, more millions of dollars of our concessions would have been wasted on these outrageous fees," Kevin Griffin, Northwest's AFA-CWA Master Executive Council president, is quoted as saying by the Detroit Free Press. However, the Free Press writes that "the Cadwalader and Otterbourg firms, along with 22 other law firms and advisers involved in the bankruptcy, got approval for regular fees and expenses. Gropper approved a total bill of $118.8 million in fees and $5.4 million in expenses."

[Ilsa]

1. Not happy with $500 an hour? No telling how many of those

billed hours were fluff to begin with. Finally, a judge that understands that it isn't all about the lawyers.