Fees of Lehman(LEHMQ) Bankruptcy Advisors cross $2 Billion- GS & JPM

Northern, WI 02/02/2013 (avauncer) -Lehman Brothers Holdings Inc. (PINK:LEHMQ), which is still in the process of liquidation has paid its advisors and  managers $153.8 million during December. With this, the total fees have crossed the $2 billion level in the 4 years since it first went in for bankruptcy. The expenses incurred in the month of December comprised of incentives worth $84 million for a scheme to pay its creditors an average 18 cents per dollar, as per the filing in U.S. Bankruptcy Court . Alvarez & Marsal LLC, restructuring company that now operates the bank, has earned nearly $583 million till now. While the bankruptcy litigators, Weil, Gotshal & Manges LLP have received $454 million.

A separate filing shows that Lehman Brothers Holdings Inc. (PINK:LEHMQ)’s  creditors can expect a 3^rd payment trench any time between 25^th March and 30^th April. The investment bank had an asset base of $639 billion in September 2008, when it filed for court lead bankruptcy. Its major creditors include, UBS AG (VTX:UBXN) whose shares trade at NYSE as UBS AG (USA) (NYSE:UBS) and Goldman Sachs Group, Inc. (NYSE:GS).

Judge James Peck has accepted Lehman Brothers Holdings Inc. (PINK:LEHMQ)’s plea to allow a flexible repayment schedule for its creditors. Till date, the bank has paid its creditors around 9 cents per dollar or 50% of the total sum it anticipates paying by 2016. The liquidation proceedings of the Lehman Brothers Holdings Inc. (PINK:LEHMQ) is one of the costliest till date in US history. The bankruptcy charges crossed $1 billion mark in the two and a half years since October 2010.

The bankruptcy courts compete among themselves, thus leading to higher fees. Normally judges don’t challenge lawyers’ payments if they bring big cases, since the present laws allow these lawyers to take subsequent cases to rival courts where the fees won’t be challenged. Till last month Lehman Brothers Holdings Inc. (PINK:LEHMQ) has paid $34.8 million as fees. This comprises $5.3 million paid to Alvarez & Marsal and $3.8 million paid to Gleacher & Co. Fees till 6^th March when the bank exited from bankruptcy court was around  $1.9 billion and since then it has paid $160.8 million.

The shares of UBS AG (USA) (NYSE:UBS) went up by 1.21% to close at $17.58

The shares of Goldman Sachs Group, Inc. (NYSE:GS) were up by 1.38% to close at $149.09.