Hawker Beechcraft Trustee Says Some Of $19.31M In Fees Are ‘Unreasonable’

by Tara Arick on March 18, 2013 · 0 comments

in Bankruptcy

- From LexisNexis® Mealey’s™ Daily Legal News.

The U.S. trustee in the Chapter 11 bankruptcy of Hawker Beechcraft Inc. on March 14 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York objecting to various firms’ applications for more than $ 19.31 million in compensation and reimbursement of expenses (In Re: Hawker Beechcraft, No. 12-11873, Chapter 11, S.D. N.Y. Bkcy.).

Hawker Beechcraft filed for Chapter 11 bankruptcy on May 3.

Fees, Expenses 

The U.S. trustee contends that some of the $ 19,317,824.85 in fees and expenses sought by 12 firms involved in the bankruptcy should be reduced on grounds that the amounts sought are “unreasonable.”

The U.S. trustee says she renews her objection, which was initially filed on Oct. 25, in which she argued that the first interim fees sought by Kirkland & Ellis and Alvarez & Marsal in the aggregate amount of $ 402,078.50 should be denied.

Specifically, the U.S. trustee says that those expenses were for services performed in connection with an unsuccessful prosecution of a disguised retention plan.

Retention Plan

As part of this second interim fee period, Kirkland & Ellis and Alvarez & Marsal are now seeking the allowance of an additional $ 93,199 in fees for services that were performed in connection with the unsuccessful prosecution of the disguised retention plan, the U.S. trustee contends.

The U.S. trustee also argues that the fees sought by retained professionals Fried Frank Harris Shriver & Jacobson, Curtis-Mallet Prevost Colt & Mosle, and Mercer (US) Inc. should be denied.

Fried Frank Harris Shriver & Jacobson seeks $ 525,229.65 in fees, the U.S. trustee says. Of that amount, $ 38,617.65 is for preparing monthly bills and fee applications, the U.S. trustee adds.

Curtis-Mallet seeks $ 126,790, of which $ 17,621 is primarily for preparing monthly bills and fee applications, the U.S. trustee says.

Expense Categories

Mercer seeks $ 149,961.90 in fees, of which $ 23,563.95 is listed as “project management administration,” which is a category of expense designated for preparing monthly bills and fee applications, the U.S. trustee maintains.

The fees for those sorts of expenses should not exceed 5 percent of the total fees sought, the U.S. trustee contends. However, in all three cases, the fees sought are at least 7 percent of the total reimbursement sought.

Moreover, the U.S. trustee objects to the $ 25,800.96 in catering expenses sought by Kirkland & Ellis and the $ 11,197.46 sought by Alvarez & Marsal for meal expenses. Perella Weinberg Partners seeks of $ 44,207 for “airfare” expenses and $ 15,797 for “meal” expenses, but the U.S. trustee objects on grounds that the expenses are not itemized. Additionally, the U.S. trustee argues that Mercer is not entitled to $ 2,639 in travel expenses.

The U.S. trustee, Tracy Hope Davis, is represented by Paul K. Schwartzberg of New York.

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