In a 7 page decision released December 28, 2015, Judge Sontchi of the Delaware Bankruptcy Court ruled on a professional's fee application. Even though the Opinion is not particularly unexpected or unusual, because this occurs so infrequently, I thought it worth noting. Judge Sontchi's opinion is available here (the "Opinion"). The Opinion was issued in Cal Dive International, Inc., Case No. 15-10458. In this case, Akin Gump was co-counsel to the unsecured creditors committee. Following its submission of its fee application, it engaged in multiple discussions with the UST and Fee Auditor, reducing its total fee and expense request from approximately $993k to approximately $891k. The DIP Agent objected to Akin's fee application, requesting a reduction of nearly $400k.
Judge Sontchi appeared to place great weight on the comparison of Akin's fees against those of the other bankruptcy professionals in the case. He wrote: "Although at first blush, the Court is concerned about the volume of fees incurred by Akin Gump in the first interim period, as compared with the other professionals, Akin Gump's fees do not appear vastly disproportionate." Opinion at *6.
In reviewing the fee application, Judge Sontchi noted that "Akin Gump billed approximately 30% of the counsel fees incurred in the first interim period." Opinion at *7. He also noted that once the course of this bankruptcy became clear, and the parties involved realized how dire the debtors' predicament was, Akin significantly reduced its fees in future periods. Opinion at *7.
While it is occasionally necessary to object to a professional's fees, it helps when such objections are supported by the UST, a fee examiner, or at a minimum, the debtor.
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