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A quarterly report shows that the Detroit's lead bankruptcy law firm, Jones Day, had submitted more than $16.6 million in fees and nearly $734,000 in other expenses as of December, by far the top biller. / J. Kyle Keener, Detroit Free Press

DETROIT -- The total fees and expenses racked up by law firms, consultants and others in Detroit's bankruptcy hit nearly $36 million in the last quarter of 2013 as the pace of negotiations, mediation and courtroom battles intensified, court documents show.

Court-appointed fee examiner Robert Fishman's quarterly report shows that the city's lead bankruptcy law firm, Jones Day, had submitted more than $16.6 million in fees and nearly $734,000 in other expenses as of December, by far the top biller.

Conway MacKenzie, the city's restructuring consultant, billed for $5.3 million in fees and almost $17,000 in expenses, while the Dentons law firm, hired to represent the official committee for Detroit's retirees, billed for $4.4 million in fees and $185,550 in expenses. The city is paying the fees and expenses of 16 firms as Detroit battles to reduce its $18 billion in debts and restructure city government in the nation's largest-ever municipal bankruptcy.

The total billings will grow exponentially as bills come due for the speedy pace of talks and hearings in the first five months of 2014. Last fall, Detroit emergency manager Kevyn Orr budgeted $62.5 million for consultants and lawyers for the city, and that didn't include the additional expenses of court-appointed lawyers representing retirees or the fees and expenses of Fishman himself.

U.S. Bankruptcy Judge Steven Rhodes appointed Fishman last August to monitor expenses in Detroit's Chapter 9 case to ensure that billings are reasonable. Many of the firms have agreed to discounted rates, including Fishman, who agreed to be paid $600 an hour, while his typical hourly rate is $675.

"Clearly, the professional fee expenses incurred during the reporting period were substantial," Fishman wrote in his quarterly report filed Tuesday. "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."

Bankruptcy experts have predicted that the total costs of a Detroit bankruptcy could easily exceed $100 million. Among the most expensive municipal bankruptcies was that of Orange County, Calif., where bills for an 18-month stay in bankruptcy court in the mid-1990s hit $86 million.



Copyright 2014 USATODAY.com

Read the original story: Detroit bankruptcy tab hits $36M in 2013

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