A recent the American Lawyer story “Ropes & Gray Seek Fees for Gawker Bankruptcy Work,” reports that Gawker Media Group Inc. hasn’t gone quietly into bankruptcy after it was hit in March with a $140 million verdict over the publication of a video that showed professional wrestler Hulk Hogan having sex. Gawker’s restructuring lawyers at Ropes & Gray made some noise of their own, detailing billing rates of up to $1,450 per hour in the company’s Chapter 11 case.
Ropes & Gray, led by restructuring partner Gregg Galardi, laid out the rates in a formal application to serve as lead debtor's counsel for the proceedings in U.S. bankruptcy court in Manhattan, where Gawker sought protection from creditors on June 10. Partners handling the Gawker bankruptcy plan to charge hourly rates of $880 to $1,450, while the rates for Ropes & Gray’s of counsel lawyers would range from $605 to $1,425 per hour, according to a court filing by the firm. Ropes & Gray also put its hourly billing rates for associates at between $460 and $1,050.
Beyond those rates—which Ropes & Gray said it expects to charge for the duration of Gawker’s Chapter 11 process—the firm also offered a window Monday into what it collected from the debtor prior to its bankruptcy filing earlier this month. For that pre-petition work, Ropes & Gray gave Gawker an estimate that its legal fees would come to $750,000, and the firm offered discounts that would vary in amount based on how its pre-petition fees compared to that $750,000 estimate.
From May 18 through June 8, Ropes & Gray sent invoices to Gawker totaling $738,566, according to court documents filed Monday. In addition, Ropes & Gray has roughly $279,000 remaining in a retainer that Gawker paid for the case. The firm also noted Monday that there could be some pre-petition fees that have not yet been processed—those bills would be paid out of the retainer balance.
Galardi, who serves as co-chair of Ropes & Gray’s global restructuring group, didn’t return a request for comment Tuesday about his firm’s planned billing rates in the Gawker bankruptcy. The bankruptcy lawyer joined Ropes & Gray earlier this year from DLA Piper, having joined the global legal giant in 2011 after serving as a partner at Skadden, Arps, Slate, Meagher & Flom.
The employment application from Ropes & Gray is the latest development in Gawker’s highly publicized bankruptcy saga. Upon announcing the start of bankruptcy proceedings nearly two weeks ago, Gawker indicated that it had lined up a potential $90 million sale to digital media publisher Ziff Davis LLC. Since the sale will happen amid the bankruptcy, other companies would also be able to submit bids in an auction of Gawker’s assets.
In connection with its bankruptcy petition, Gawker included three firms on a list of its top 20 unsecured creditors. The company said in a court filing that it owed more than $115,000 to New York’s Morrison Cohen; nearly $40,000 to Fried, Frank, Harris, Shriver & Jacobson; and more than $13,500 to Shenker & Bonaparte in Portland, Oregon.
Gawker’s bankruptcy came in the wake of a lost invasion of privacy suit brought against Gawker and founder Nick Denton by Hogan, the former professional wrestler whose real name is Terry Gene Bollea. Hogan filed the suit after Gawker posted a video of him having sex with a friend’s wife. In March, a jury in Florida sided with Hogan and awarded him $140 million. Of that total, Denton was found personally liable for $10 million.