A sum of more than US$263,000 ($360,000) charged for photocopies in four months. Over US$2,100 in limousine rides by one partner in one month. And US$48 just to leave a message. Explanations for these charges? Priceless.

The lawyers, accountants and restructuring experts overseeing the remains of Lehman Brothers have already racked up more than US$730 million in fees and expenses, with no end in sight. Anyone wondering why total fees doled out in the Lehman bankruptcy alone could easily touch the US$1-billion mark merely has to look at the bills buried among the blizzard of court documents filed in the case.

In the months after Lehman's collapse in September 2008, the New York law firm Weil, Gotshal and Manges paid one car-service company alone more than US$500 a day, as limo drivers cooled their heels waiting for meetings to break (and this in a city overflowing with taxis).

While most of corporate America may be just emerging from the Great Recession, bankruptcy specialists have spent the last two years enjoying an unprecedented boom. Ten of the 20 largest corporate bankruptcies in recent decades have occurred over the last three years, according to BankruptcyData.com.

The size and complexity of these mega-cases have created a feeding frenzy of sorts for those asked to sort them out. To date, Weil, the lead law firm representing Lehman, has billed the Lehman estate for more than US$164 million.



Chewing GUM? $2.54

Analysts, lawyers and others involved in the larger bankruptcy boom say some fees are legitimate - and that others are, at a minimum, highly questionable.

At one deposition Mr Robert White, a former bankruptcy partner at O'Melveny and Myers, attended last year, each law firm sent two or three lawyers when one would have sufficed. "They were just sitting there on their BlackBerrys and talking to other people," he said.

At several firms, partners now charge US$1,000 an hour or more for their bankruptcy services. But billable hours explain only part of the run-up in costs.

Lawyers from Weil, which has accounted for close to US$16 million of fees in General Motors' bankruptcy filing, put in for US$364.14 in dry cleaning as well as more than a week at the Sherry-Netherland hotel in Manhattan, where one lawyer's room cost US$685 a night.

In court documents, the firm responded that it could be tough to find hotel rooms in New York City for US$400 or less.

No charges have been too big, or too small. The Huron Consulting Group, a management consultancy involved in Lehman, charged $2.54 for "gum in airport".

LESS LEFT FOR CREDITORS

Analysts say that nickel-and-diming might be worth a laugh or two - if some of the larger fees weren't snowballing so quickly. They say these bounteous fees reduce the money left for creditors in the bankruptcy cases.

In the Lehman case, some unsecured creditors, including bondholders, banks and vendors are likely to get just 14.7 cents on the dollar for their claims, according to Lehman's proposed reorganisation plan.

Lawyers and restructuring pros who are picking up the pieces of companies swamped by the bankruptcy wave say their fees are well deserved and that their services help make the bankruptcy process more efficient.

"The legal skill we used to sell Lehman's North American capital markets business to Barclays saved 10,000 jobs and preserved the business itself, capturing value that otherwise would have been lost," said Mr Harvey Miller, 77, a Weil partner considered the dean of the bankruptcy bar.

Many people agree that Lehman, in particular, is a huge case that tests even the most experienced lawyers. "Lehman is a sufficiently complicated company that it would be safe to assume that if it weren't for equally sophisticated professionals ... the creditors would essentially receive nothing," says Mr Stephen J Lubben, a professor at the Seton Hall University School of Law.

Others, however, have a different perception of the fees. "It violates any sense of proportion," says Mr Kenneth Feinberg, the Washington lawyer whom the court appointed last June to monitor fees associated with the Lehman bankruptcy, after concerns were raised in the media about the soaring fees in the case.

Mr Miller sees his own work as a battle between corporate life and death, with the money spent on photocopies and dry cleaning an insignificant detail.

"If you had cancer and you were going into an operation, while you were lying on the table, would you look at the surgeon and say, 'I'd like a 10-per-cent discount,' " he explains. "This is not a public, charitable event."

The New York Times