$17 Million Billed to Date by Trustee Law Firm for MF Global

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Trustee James Giddens, from the law firm of Hughes Hubbard & Reed, has been paid by the estate of MF Global Inc and not from assets possibly from customers of the company, according to documents filed in U.S. Bankruptcy Court in Manhattan. The fees need to be approved by the court, which is what Giddens is seeking. The fees cover the timeframe from when Giddens was appointed on October 31 to February 29. The fees since then have not been submitted yet with the court. Kent Jarrell, a spokesman for Giddens, said that Hughes Hubbard would credit the fees towards future bills if they were to be rejected instead of returning the money.

The team led by Giddens has billed $20.1 million for the four months it has been working but they are withholding 15 percent of the total because of an agreement with Securities Investor Protection Corp. The rate charged by Giddens is $894 per hour, which includes a 10 percent reduction from the rate he normally charges as a result of the agreement signed with SIPC. Giddens billed 424 hours in the four months.

  

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Other members of the Giddens team have billed more hours than he did. James Kobak, billed 749 hours at the same rate as Giddens. Christopher Kiplok, a bankruptcy partner, billed 675 hours at $691.55 per hour. The team includes 130 lawyers and 28 paralegals, which has billed 43,000 hours.

“The dude deserves to get paid and he’s done a good job,” said James Koutoulas, leader of advocate group the Commodity Customer Coalition. “But the system for bankruptcy fees is ridiculous. Bankruptcy lawyers are probably the most overpaid group of lawyers in the country. I’d feel a little more comfortable if it was around, say, $12 million.”

MF Global declared bankruptcy back in October of 2011 and Giddens has been tasked with returning as much money as possible to the firm’s customers. The fees turned in by Giddens are higher than the ones he submitted when working on the Lehman wind-down. On that case, Giddens’ team reported close to $14.26 million in fees. During that case, the rate for Giddens was $787, which had a 10 percent reduction from the SIPC agreement. The increase in the rate by Giddens has occurred over time in order to mirror an increase in the billing rates for Hughes Hubbard. While working for close to three-and-a-half years on the Lehman case, Hughes Hubbard billed $200 million in fees and has been approved for $172 million so far. The activities being billed for include the payback of billions of dollars to customers of MF Global and making sure that customers were informed about public meetings.