November 30, 2015
A recent WSJ story, “Watchdog Seeks More Cuts to Caesars Professional Fees” reports that Caesars’ restricting tab is getting a little lighter. The watchdog tapped to review the millions of dollars of fees submitted in the Chapter 11 case of Caesars Entertainment Corp.’s operating unit is recommending further cuts to the first round of charges in the massive bankruptcy.
The fee committee filed an updated review of fees that requested that firms write off thousands of dollars of fee beyond what they’ve already agreed to forgo. The fee watchdogs filed their first report in August, taking aim at meals and travel as well as overly heavy staffing, among other charges. But when the reduced fees were presented for approval of Judge A. Benjamin Goldar in September, he called for additional review. “I have no guidance” on a “really critical aspect” of the applications, he said—whether the fees were necessary or beneficial.
The updated report seeks to address Judge Goldgar’s concern as they pertain to seven firms, three of which work for Caesars and four of which work for two of its official creditor committees. The creditors’ committee status means Caesars is obligated to cover their fees in addition to its own.
Four of the firms will escape without further cuts, according to the latest report. Chief among them is Kirkland & Ellis, Caesars’ lead bankruptcy counsel, which has already been asked to cut $170,000 from the $21.4 million in fees and $762,000 in expenses Kirkland lawyers charged for work performed between Jan. 15 and May 31. Also getting off without further cuts beyond what the committee had already recommended are KPMG, Caesars’ tax consultant; Jones Day, whose lawyers represent the committee of junior bondholders; and FTI Consulting financial adviser to the unsecured creditors’ committee.
However, three firms aren’t so lucky. On top of the nearly $65,000 in cuts the fee committee has already requested from DLA Piper, the law firm—Caesars’ conflicts counsel—has been asked to cut another $17,300. Proskauer Rose, the law firm representing the unsecured creditors’ committee, faces a request to cut another $101,000 beyond the $50,000 it had previously been asked to cut. And the $10,000 in cuts suggested to G.C. Andersen Partners, the unsecured creditors’ gaming industry consultants, has now grown by another $12,000.