A recent American Lawyer story, “Latham Lands Latest Energy Bankruptcy as Fees Draw Scrutiny,” reports that Latham & Watkins is the latest Am Law 100 firm to find a silver lining in the energy industry’s ongoing turmoil, snagging a role as lead debtor’s counsel for Oklahoma City’s Chaparral Energy LLC in the 10th-largest bankruptcy so far this year.

Chaparral filed for Chapter 11 protection in Delaware federal bankruptcy court on Monday, adding to a growing list of energy companies to succumb to slumping oil and gas prices.  The petition listed debts between $1 billion and $10 billion.

The independent oil and gas company tapped Latham’s Richard Levy and Keith Simon as lead debtor’s counsel, along with local counsel Mark Collins and John Knight of Richards, Layton & Finger.

Chaparral said in court filings that it first hired Latham in February as restructuring counsel.  With help from the law firm and financial advisers, the company said, it has tried to reach a debt-for-equity deal with lenders and bondholders that would reduce the company’s debt by about $1.2 billion, but the two sides failed to reach an agreement.

Chaparral’s filing continues a string of recent bankruptcies in the energy industry, driven in part by a drop-off in commodities prices over the past two years.  As The Am Law Daily has reported, those companies’ financial struggles have spawned restructuring work for a number of major law firms.  Skadden, Arps, Slate, Meagher & Flom, Kirkland & Ellis and Jones Day are among the Am Law 100 firms to have recently landed key debtor’s-side roles in energy sector bankruptcies, while Akin Gump Strauss Hauer & Feld has emerged as a go-to firm for creditors.

Led by global restructuring head Jay Goffman, Skadden serves as debtor’s counsel in the biggest bankruptcy to date this year, SunEdison Inc.’s Chapter 11 case in Manhattan federal bankruptcy court.  The bankruptcy, filed on April 21, could also turn out to be one of the most litigation-heavy.  SunEdison already faces lawsuits on multiple fronts, including breach of contract claims lodged in early April by subsidiary TerraForm Global Inc. and a separate breach of contract suit filed in March over a scuttled $2.2 billion bid to acquire Vivant Solar Inc.

SunEdison filed its formal application on April 26 to hire Skadden for the bankruptcy case.  Skadden’s Goffman wrote in a declaration the same day that the company had paid his firm more than $12.1 million prior to the Chapter 11 petition.  Skadden plans to charge hourly rates between $935 and $1,425 for partners, $925 to $1,040 for counsel, and between $390 and $920 for associates.

The U.S. Trustee’s Office overseeing the SunEdison bankruptcy has since indicated that it’s likely to keep a close eye on the legal fees in the case.  In a May 5 filing, the trustee’s office wrote that Skadden offered discounted rates to SunEdison prior to the Chapter 11 petition, but that the firm wouldn’t provide discounts during the bankruptcy.

“Although the United States Trustee does not object to the application, the United States Trustee reserves all rights to object to any and all of Skadden’s fee applications on any and all grounds, including … the billing rate(s) charged in such fee applications,” the trustee’s office wrote in its May 5 filing.

As for Kirkland, the firm and partner James Sprayregen landed new debtor’s-side roles in late April for Houston-based Ultra Petroleum Corp. and Tulsa-based Midstates Petroleum Co. Inc.

Ultra and Midstates have yet to disclose their legal fees in court.  But Kirkland's fees have drawn scrutiny in another energy sector bankruptcy, Sabine Oil & Gas Corp.'s Chapter 11 in Manhattan federal bankruptcy court.  In response to Kirkland's latest fee application in the Sabine case, the trustee's office wrote on Monday that the firm appeared to be billing at premium rates—with partners charging a "blended" hourly rate of $146 more than the firm's partners charge outside of bankruptcy.

"K&E is not only charging higher blended rates for this case than it charges its nonbankruptcy clients,” the trustee’s office wrote, "but it is also charging a higher rate for its bankruptcy professionals than it charges for its nonbankruptcy professionals of similar or greater experience.”

As with Skadden's case, the trustee's office didn't lodge a formal objection on Monday, but said that it would seek more information to determine whether to oppose the fee request.