A recent Texas Lawyer story, “Kirkland & Ellis Tops $146M in Fees in Energy Future Holding’s Bankruptcy,” reports that the court-appointed fee committee in the mammoth Energy Future Holdings (EFH) Chapter 11 bankruptcy has a new challenge: tackling the recent application filed by the law firm of Kirkland & Ellis seeking approximately $21.3 million in attorney fees and expenses.

Kirkland & Ellis and Kirkland & Ellis International (Kirkland) are representing EFH and its affiliates in the case.  Earlier in the case, Kirkland had requested that the presiding judge in the EFH Chapter 11 case, U.S. Bankruptcy Judge Christopher S. Sontchi, reimburse the firm $125,067,877 for attorney fees and expenses.  The following attorneys are leading the Kirkland team in representing EFH in the bankruptcy suit: New York partners Edward Sassower, Stephen Hessler and Brian Schartz; and Chicago partners James Sprayregen, Marc Kieselstein, Chad Husnick and Steven Serajeddini.

Originally filed in Delaware bankruptcy court April 29, 2014, Texas-based EFH's case is one of the largest Chapter 11 bankruptcies in U.S. history.  According to Kirkland's recently filed fifth interim fee application for the period from Sept. 1 through Dec. 31, as of Jan. 22, Kirkland had received payments totaling $11,440,057 relating to compensation and expenses sought in the monthly fee statements.

In the recently filed fifth interim fee application that covered the period of Sept. 1 through Dec. 31, the Kirkland attorneys emphasized that the fourth quarter of 2015 was particularly constructive as far as moving EFH's restructuring initiatives forward.

"To say that this has been one of the most productive and value-maximizing fee periods—a sentiment echoed by the court in confirming the comprehensive plan of reorganization—over the course of the debtors' three-year restructuring efforts would be an understatement," the Kirkland attorneys stated in their recent fee application.

During the fee period of Sept. 1 through Dec. 31, the debtors obtained approval of the disclosure statement, launched and completed solicitation of the plan, obtained entry of an order approving the plan support agreement and participated in an eight-day confirmation trial that involved, as the court noted, "the presentation of a huge amount of evidence" in a "highly professional, highly efficient" manner, according to the fifth interim fee application.

Back in August 2014, Judge Sontchi signed a joint agreement among the debtors, the U.S. Trustee and the EFH unsecured creditors committee to set up a four-person panel called the fee committee to monitor the professional fees and expenses being charged in connection with the bankruptcy.  The Wisconsin firm of Godfrey & Kahn was selected to advise the fee committee."

Katherine Stadler, a shareholder with Godfrey & Kahn, recently discussed the role of the fee committee in EFH's Chapter 11 bankruptcy.  Stadler is in the litigation and business finance, bankruptcy and restructuring practice groups in the firm's Madison office.

"The fee committee reviews the fee and expense applications of more than 30 professional firms and makes appropriate recommendations to the U.S. Bankruptcy Court, which has the final statutory oversight responsibility," Stadler said.  "This case has been unusually complex and difficult, but the court confirmed the company's plan of reorganization last month based on the virtually unanimous consensus of its creditors and interested parties."

Stadler also talked about the fee committee's future actions in connection with EFH's bankruptcy case.

"Of course, the review process for all of the law firms and other professionals—by the fee committee, by the court, and by the company itself—will still continue and that will include a final public hearing by the court later in the year," Stadler said.