A Detroit Free Press story, “Bankruptcy Fee Examiner Challenges Law Firm’s Fees for Talking to the Press,” reports that Dentons, a law firm that represents Detroit’s retirees, is being challenged for its practice of charging thousands of dollars for media relations services. The law firm, whose fees are paid for by the city, billed as much as $27,000 per month to monitor media coverage, to prepare summaries of media coverage and to respond to press reports filed with U.S. Bankruptcy Court by Robert Fishman. Fishman was appointed by the U.S. Bankruptcy Judge Steven Rhodes last year to monitor the fees that law firms and professional advisers are billing the city for help with bankruptcy case.
In total, Dentons billed $3.16 million in the first quarter, making it one of the most expensive firms involved in Detroit’s bankruptcy case. “The fee examiner questions the propriety of Dentons, a law firm, billing for all media activities undertaken,” Fishman said in his report to the court. “Certain media activities fall within the scope of providing legal services, such as reviewing and advising on press reports prepared by a client, while others do not, such as drafting the entire press report and reviewing newspaper articles.”
A Dentons partner defended the billing. “This is something that the mediators and the court has even encouraged us to do – to communicate with retirees through via the media,” said Carole Neville, a partner with Dentons. The firm did agree to cut its fees and expenses by $7,000 after they were initially questioned by Fishman.
Fishman’s report will be reviewed by Rhodes, but it is unclear whether Rhodes has authority to deny fees billed to the city. The city agreed to pay Dentons’ legal bills last year even though the firm represents the court-appointed committee of retirees, which often has been at odds with the city during the bankruptcy case. The committee eventually backed Detroit’s plan of adjustment after helping to negotiate reductions in the city’s proposed pension cuts.
Throughout its bankruptcy case Detroit has been guided by twelve law firms, accounting firms and financial advisers. So far, Jones Day, the city’s lead law firm, has been paid the most in legal fees, and charged Detroit $8.7 million for the first three months of the year. Fishman also is challenging a portion of those fees.
In his March report Fishman question the time billed by Jones Day for research on Oakland County’s objection to the city’s restructuring plan. Jones Day has asked Fishman for time to review his concerns. The law firm has already agreed to reduce its fees by about $20,000.