A recent Bloomberg Law story by Daniel Gill, “Professional Fees in Puerto Rico Restructuring Pass $400 Million,” reports that attorneys and financial advisers employed in Puerto Rico’s epic bankruptcy-like restructuring have billed more than $400 million in less than two years since the proceedings began, according to a court-appointed fee examiner. More than 50 firms have sought compensation in the case, Brady C. Williamson, the fee examiner appointed to review and make recommendations regarding professionals’ applications for compensation, said in his report June 5.
Proskauer Rose LLP, which represents the federal board created to oversee the restructuring, the Financial Oversight and Management Board, submitted a bill totaling about $20 million for services rendered from June 1, 2018 through Jan. 31. For the same time period, O’Melveny & Myers LLP, counsel for the AAFAF, a Spanish acronym for Puerto Rico’s fiscal authority, is charging about $17 million. Paul Hastings LLP, counsel for the unsecured creditors committee, seeks $3.6 million. Other firms with a bill exceeding $1 million include Greenberg Traurig LLP, Brown Rudnick LLP, and Jenner & Block LLP.
The fee applications, which are public documents, don’t face any objections, Williamson said. He recommended that some of the bills from Oct. 1, 2018 to Jan. 31 be approved. He asked the court to defer ruling on other bills until a hearing on July 24.
Professional fees will likely continue to rise due to increased litigation and contested settlements, Williamson said. The oversight board recently filed more than 200 lawsuits, and a proposed settlement of Puerto Rico’s electric utility PREPA’s debts is being contested. Williamson said he “remains concerned about the potential for inefficiency and duplication of efforts in the management” of lawsuits, noting the many firms pursuing claims.