A recent American Lawyer story, “Judge OKs Detroit’s $178 Million in Bankruptcy Fees,” reports that, after reviewing $178 million in fee requests from attorneys and consultants who worked on Detroit’s bankruptcy, U.S. Bankruptcy Judge Steven Rhodes has ruled that the amount is reasonable considering the complexity of the proceedings and the success of the case.

Detroit’s lead counsel, Jones Day, logged the highest amount of fees, totaling $57.9 million.  The investment bank Miller Buckfire incurred $22.8 million in fees, while Dentons charged $15.4 million as counsel to the official Committee of Retirees.

Since coming under state control in March 2013 because of its dire financial condition, Detroit attracted public scrutiny as its bankruptcy expenses ballooned, prompting demonstrations and the hiring of a fee examiner in August 2013.  Last November, Rhodes ordered Detroit’s bankruptcy team and its hired consultants into mediation to reach an agreement over the reasonableness of the fees, and gave that agreement his blessing.

Rhodes said the hundreds of motions and objections filed, the complicated question of whether Detroit was eligible for bankruptcy, the lengthy list of adversary proceedings, the over 1,000 objections to the confirmation of the city’s plan and multiple mediation sessions lent credibility to the high bills charged.

Citing the approximately $7 billion in liabilities eliminated, Rhodes said the benefits accrued by the city as result of the bankruptcy proceedings was further evidence that the fees were reasonable.  He noted that the city would now be able to invest about $1.7 billion over 10 years to improve government infrastructure and civil services.

Rhodes said the rigorous fee examinations by NALFA member Robert Fishman of Shaw Fishman and the fact that the attorneys and consultants agreed to lower their fees during mediation were also reasons the fees should be considered reasonable.  The judge revealed in his opinion that Jones Day’s bill reflected a reduction of at least $17.7 million, while Miller Buckfire’s fees were about $15 million less than the bank’s original proposal.  Dentons’ bill amounts to a reduction of more than $3.8 million.