A recent ABA Journal story, “How Much Has Weil Gotshal earned in Lehman Brothers’ Bankruptcy?,” reports that professional fees paid to lawyers and other bankruptcy professionals tops $2 billion since Lehman Brothers Holdings filed for Chapter 11 bankruptcy in 2008.  Almost $500 million in attorney fees has been paid to Lehman counsel Weil Gotshal & Manges.  This is the largest bankruptcy in U.S. history.

Lehman creditors are set to get 18 cents on the dollar by 2016.  Under a 2011 liquidation plan, the value of the Lehman estate was estimated to be $65 billion.  Lehman listed $613 billion in debts when it filed for bankruptcy protection.  A $14 billion distribution is scheduled to pay out in October, and after that, the estate’s distributions in total will be $43 billion.

Robert Lawless, a bankruptcy professor at the University of Illinois College of Law said the fees are appropriate.  “It’s easy to be outraged and say it shouldn’t happen, but is this emblematic of a system that’s broken and isn’t working?” he asks.  “I can’t look at $2 billion in fees in a $639 billion case and say that.”

Harvey Miller, the Weil lawyer who represents Lehman, said the recovery may rise to 22 cents on the dollar as the value of the estate’s assets are expected to increase to approximately $80 billion over the next three years.  Miller expects that the case will continue for three to five more years, as large lawsuits go on and the reorganization is carried out.

For more information on this case, visit www.lehman-docket.com/.