Thursday, January 15, 2009

Lehman Carcass: Feeding Ground for 513 Lawyers

A notice sent out yesterday to all known and unknown lawyers involved in the "biggest bankruptcy of all time" can be found here.

Lawyers A Thru C, for full list click above

Since we at Zero Hedge have lots of free time, we decided to count 'em and came up with a grand total of 513 lawyers! Do all these people need to be involved in the case? No. Are all of them providing any benefits? Of course not. Are they all getting paid by the company's creditors as its estate they "help" unwind? Most definitely. Even Judge Peck's head is starting to spin with all the associated legal costs "I'm deeply concerned about the overall costs and expenses of this case," Peck said. "Just because the case is large, doesn’t mean the case should be viewed as a blank check for professionals."

In the meantime, finance professionalw who have a morbid interest in Lehman events pre- and post-petition, and would like to be considered for the examiner post, should submit their resumes to U.S. Trustee Diana Adams who is currently interviewing candidates for Dick Fuld's future executioner.

Speaking of lawyers, Milbank Tweed, whose official status in the case is to counsel the official creditor committee (i.e., provide the guys who have lost gobs of money with information, not just monthly invoices), is doing all it can to limit how much information becomes available in the case, while an unlikely hero for the creditors is emerging in the face of New York Comptroller Tom DiNapoli. DiNapoli himself is in some deep doodoo, as the New York Pension fund that he manages has lost over 40% in the past year and seems hell bent on recovering at least some of that: whether or not he is successful before he has to tell thousands of policemen and teachers that their retirement funds are, well, gone, is unknown.

But back to Milbank - much to the chagrin of Judge Peck himself, Evan Fleck of Milbank argues that the examiner should have a narrower job description than being endowed with a "broad scope" of powers, to which Peck's response is that he has a "cognitive problem" with limiting the examiner's report to just facts. "Any useful investigation would have to be colored by some form of judgment." ($$$ link here) Why Milbank, who, contractually, should be interested in getting as much info as possible, is pushing hard to keep developments under wraps is a bit of a mystery to us. But then again, in this case, where every motion has been steamrolled with blistering speed and where the only beneficiaries have been select insiders, and where Peck has been signing off on wrong decision after wrong decision with the same aplomb as Henry VIII used to sign divorce papers (from the original sale of the Lehman brokerage unit to Barclays for pennies, after Barclays declined to buy Lehman outright in the day prior to filing, to the subsequent sales of the R3 and Neuberger Berman investment unit to ex-Lehman professionals) nothing surprises us any more.
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