BULKY
`DOCUMENT
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`(FILED ON PAPER - ENTIRE DOCUMENT EXCEEDS 100 PAGES)
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`I Proceeding No.
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`I 91219477
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`!Filing Date
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`106/01/2016
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`Declaration of Ignacio V. Duran
`Exhibit C
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`91219477
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`

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`c
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`Page I
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`LexisNexis"'
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`4 of I 00 DOCUMENTS
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`Copyright 2009 Factiva ®, from Dow Jones
`All Rights Reserved
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`Dow Jones Factiva
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`(Copyright (c) 2009, Dow Jones & Company, Inc.)
`
`mEWlU 8mErf JOURNAL.
`
`The Wall Street Journal
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`January 9, 2009 Friday
`
`SECTION: DEALS &DEAL MAKERS; Pg. CS
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`LENGTH: 489 words
`
`HEADLINE: Lehman Brothers Plans Private-Equity Spinoff
`
`BYLINE: By Peter Lattman
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`BODY:
`
`Corrections &Amplifications
`
`Angelica Corp. is a hospital linens provider based in Chesterfield, Mo. A Friday Deals &Deal Makers article about
`a spinout of Lehman Brothers' buyout arm incorrectly said that Angelica is located in Mississippi.
`
`(WSJ January 13, 2009)
`
`(END)
`
`Lehman Brothers' buyout arm has reached an agreement with its collapsed parent to spin out into an independent
`firm, while taking in new investment from luxury-goods billionaire Johann Rupert, according to two people familiar
`with the deal.
`
`As part of the move, the Lehman estate will retain a substantial interest in the private-equity shop, called Lehman
`Brothers Merchant Banking. The business has $4.5 billion under management and holds stakes in more than a dozen
`portfolio companies including a Spanish railcar manufacturer and a U.S. bicycle-component maker.
`
`The deal also involves South African billionaire Mr. Rupert, whose Luxembourg-listed investment vehicle Reinet
`Investments SCA will assume $250 million in unfunded commitments to the fund. Mr. Rupert, who also chairs
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`Lehman Brothers Plans Private-Equity SpinoffThe Wall Street Journal January 9, 2009 Friday
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`Page 2
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`luxury-goods company Richemont, is betting on private equity at a time when large investors arc looking to reduce their
`exposure to this area. Mr. Rupert was not available for comment.
`
`The transaction shows how Lehman's restructuring advisors, Alvarez &Marsal, have decided to retain and manage
`Lehman assets rather than sell them into a weak market. Numerous private-equity firms including Blackstone Group LP
`and Carlyle Group expressed an interest in acquiring the unit. But instead of exiting from the business entirely, Lehman
`decided to retain a substantial stake and spin off the rest to management.
`
`The deal calls for the Lehman estate to spin out the unit's most recent fund, a $3.3 billion vehicle raised in 2007. It
`will be owned by the firm's current management, which is led by chief Charlie Ayers. It is unclear how much the
`management is paying.
`
`Meanwhile, Lehman's bankruptcy estate will retain ownership of a vehicle containing $1.2 billion in existing
`investments. That fund has performed well, already returning to investors almost three times invested capital from six
`deals.
`
`Lehman will retain about $230 million of investments -- as a limited partner -- across both the $3 .3 billion and $1.2
`billion vehicles. Those holdings include Talgo, the Spanish railcar manufacturer; SRAM Corp., the Chicago-based
`maker of high-end bicycle components; and Angelica Corp., the Chesterfield, Miss., hospital-linens provider.
`
`The fund has also decided to ease some of the strains of its client base. The firm has offered its investors -- which
`include the Pennsylvania Public School Employees Retirement System and New York City Employees' Retirement
`System -- the option to reduce unfunded commitments to the $3 .3 billion fund by up to 25%. The move follows similar
`breaks offered to investors by other buyout firms in recent weeks.
`
`License this article from Dow Jones Reprint Service
`
`NOTES:
`PUBLISHER: Dow Jones & Company, Inc.
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`LOAD-DATE: May 31, 2010
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`Page 1
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`® Lexis Nexis®
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`18 of 100 DOCUMENTS
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`Copyright 2009 Factiva ®, from Dow Jones
`All Rights Reserved
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`Dow Jones Factiva
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`(Copyright (c) 2009, Dow Jones & Company, Inc.)
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`THE WlU STREET JOUBNAL.
`
`The Wall Street Journal
`
`February 24, 2009 Tuesday
`
`SECTION: DEALS &DEAL MAKERS; Pg. C4
`
`LENGTH: 316 words
`
`HEADLINE: Lehman to Spin Off Venture-Capital Arm
`
`BYLINE: By Peter Lattman
`
`BODY:
`
`Lehman Brothers Holdings Inc.'s venture-capital arm will spin out into an independent firm, the latest move in the
`bankrupt New York securities firm's plan to shed assets and raise cash to pay back creditors.
`
`The new firm will change its name from Lehman Brothers Venture Partners to Tenaya Capital and will have S750
`million under management. The unit holds stakes in 47 technology companies, from shoe Web site Zappos.com to
`online billing system Zuora Inc. It has offices in Boston and Silicon Valley.
`
`Investors include the Pennsylvania Public Schools Employees' Retirement System and the North Carolina
`Department of State Treasurer.
`
`Lehman has fully divested itself of the business, unlike recent deals for its money-management and flagship
`private-equity fund, in which it kept stakes.
`
`But Lehman still has skin in the game; ifTenaya reaches certain performance hurdles, Lehman will receive a
`percentage of the profit.
`
`Tenaya, which derives its name from a lake in Yosemite National Park, will be owned by its five existing partners
`led by Thomas Banahan, Lehman's former global head of venture capital. It is unclear how much the management is
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`Lehman to Spin Off Venture-Capital Arm The Wall Street Journal February 24, 2009 Tuesday
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`Page 2
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`paying.
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`The deal also involves HarbourVestPartners LLC, a Boston private-equity investor with about $30 billion in assets
`under management. HarbourVest will assume Lehman's existing investment and unfunded commitments to the venture
`fund.
`
`HarbourVest is upping its bet on the venture business at a time when the technology start-up businesses are
`suffering the effects of the financial crisis.
`
`Separately, Lehman has hired Zais Group LLC, a large asset manager in Red Bank, N.J., to advise it on the
`management of roughly $1 billion in collateralized debt obligations, or CDO, funds. CDOs, which are diversified
`portfolios of structured credit investments, were at the core of the financial meltdown.
`
`License this article from Dow Jones Reprint Service
`
`NOTES:
`PUBLISHER: Dow Jones & Company, Inc.
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`LOAD-DATE: May 31, 2010
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`DA D£"T A V~l\1\1\001
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`Page 1
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`Lexis Nexis®
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`12of100 DOCUMENTS
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`Copyright 2009 Factiva ®, from Dow Jones
`All Rights Reserved
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`Dow Jones Factiva
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`Copyright 2009 Dow Jones & Company, Inc. All Rights Reserved.
`
`THE WALL STREET JOURNAL.
`
`The Wall Street Journal Online
`
`July 20, 2009
`
`LENGTH: 514words
`
`HEADLINE: Lehman Moves to Shore Up Aurora Unit
`
`BYLINE: By Patrick Fitzgerald
`
`BODY:
`
`Lehman Brothers Holdings Inc. is seeking bankruptcy-court approval to pump up to $950 million into its struggling
`Delaware banking subsidiary so it can pay off more than a half-billion dollars worth of brokered certificates of deposit
`set to come due next month.
`
`In court papers, Lehman said it wants to provide Aurora Bank FSB, formerly known as Lehman Brothers Bank
`FSB, with $450 million to shore up the bank's liquidity and provide another $500 million in short-term financing to the
`bank's servicing unit.
`
`Lehman says the cash is necessary so the bank can meet some $550 million in deposit obligations that start coming
`due in August. Without the cash, Lehman says, the unit could be seized by federal banking regulators.
`
`"If the bank is unable to satisfy all of its deposit obligations, [Lehman] and the bank's management believe that the
`bank's operations will be subjected to further regulatory restrictions, including a possible seizure of the bank and the
`appointment of a receiver," Lehman's lawyers said Thursday in court papers.
`
`Lehman has undertaken several efforts in the recent months to prop up its Delaware bank as well as to boost capital
`at its Woodlands Commercial Bank, based in Salt Lake City. The bank represents a significant asset for Lehman as it
`winds down in bankruptcy protection and collects money for creditors.
`
`Since filing for bankruptcy protection, the investment bank has pumped millions into the bank, and Lehman says its
`stake in the unit is worth about $600 million.
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`Lehman Moves to Shore Up Aurora Unit The Wall Street Journal Online July 20, 2009
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`Page2
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`Lehman hopes to boost the Delaware bank's capital level so it can again raise deposits funds. It has submitted a
`business plan to federal banking regulators that would allow it to again issue brokered certificates of deposits, which is
`how it traditionally financed its deposit obligations as they came due.
`
`A total of $940 million in brokered certificates of deposit are set to come due by the end of the year, Lehman says,
`with more than half that amount set to mature in August.
`
`Lehman said it will provide support to its banking unit by paying $450 million for a pool ofresidential and
`commercial mortgages from the bank as part of a repurchase agreement, in which the bank has agreed to buy the loans
`back in about six months.
`
`It will also provide Aurora's servicing unit, which collects payments from borrowers on behalf of the lenders, with
`a $500 million bridge loan secured by the servicer's advance receivables.
`
`The investment bank is asking Judge James Peck of the U.S. Bankruptcy Court in Manhattan to approve its request
`to help Aurora at a hearing scheduled for Aug. 5.
`
`Lehman was the nation's fourth-largest investment bank before its Sept. 15, 2008, bankruptcy filing, which ranks as
`the largest ever. Since crashing into court protection, bankruptcy professionals have sold off a number of Lehman's
`most lucrative businesses while working to preserve the value of its other valuable assets. Those moves have stabilized
`Lehman's business while adding billions of dollars to the coffers of the bankruptcy estate.
`
`Write to Patrick Fitzgerald at patrick.fitzgerald@dowjones.com
`
`NOTES:
`PUBLISHER: Dow Jones & Company, Inc.
`
`LOAD-DATE: April 20, 2011
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`Page I
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`LexisNexis®
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`30 of 100 DOCUMENTS
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`Copyright 2009 Factiva ®, from Dow Jones
`All Rights Reserved
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`Dow Jones Factiva
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`(Copyright (c) 2009, Dow Jones & Company, Inc.)
`
`mE WlLL STm:r JOUBNAL.
`
`The Wall Street Journal
`
`September 25, 2009 Friday
`
`SECTION: DEALS &DEAL MAKERS; Pg. C3
`
`LE="JGTH: 240 words
`
`HEADLINE: Wide Range of Claims: $48 Billion to Petty Cash
`
`BYLINE: By Marietta Cauchi and Margot Patrick
`
`BODY:
`
`Corrections &Amplifications
`
`Wilmington Trust Co. has made a claim of $48 billion to the administrators representing Lehman Brothers
`Holdings Inc. as a trustee representing several bondholders. A Friday Money &Investing article failed to say
`Wilmington was acting on behalf of others.
`
`(WSJ September 26, 2009)
`
`(END)
`
`The damage caused by the collapse of Lehman Brothers just one year ago ranges from debts as high as $48 billion
`claimed by Wilmington Trust Co., a Delaware-based financial-services company, to just a fistful of dollars in the case
`of private investors and borrowers, according to filings on the Web site of Lehman's claims administrator.
`
`The Association of German Banks is asking for almost $26 billion relating to contracts between its member banks
`and Lehman, while pension funds including the New York State Teachers' Retirement plan also submitted hefty claims.
`
`Among major financial institutions, Morgan Stanley made a $1 billion claim connected to Lehman's role as
`counterparty on trades with the investment bank. Other banks making claims on derivative contracts include Barclays
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`Wide Range of Claims: $48 Billion to Petty Cash The Wall Street Journal September 25, 2009 Friday
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`Page 2
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`PLC, Lloyds Banking Group PLC's unit Bank of Scotland, and Swiss bank UBS AG.
`
`New York state wants $1.2 billion in back taxes and New York City, where Lehman had its headquarters,
`submitted a $627 million tax bill for unpaid commercial rent tax and general corporation tax going back to 1996.
`
`License this article from Dow Jones Reprint Service
`
`NOTES:
`PUBLISHER: Dow Jones & Company, Inc.
`
`LOAD-DATE: May 31, 2010
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`Banln.¢cy Fees Add Up in Cases Lile lehrren's - NYTirres.com
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`lbt ~t\U !Jork limts • Reprints
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`; 11 I I I I I{
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`M;iy 1 2010
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`Who Knew Bankruptcy Paid So Well?
`
`By NELSON 0. SCHWARTZ and JULIE CRESWELL
`MORE than $263,000 for photocopies in four months. Over $2,100 in limousine rides by one
`partner in one month. And $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 $730 million in fees and expenses, with no end in
`sight. Anyone \'\'Ondering why total fees doled out in the Lehman bankruptcy alone could easily
`touch the $1 billion mark merely has to look at the bills buried among the blizzard of court
`documents filed in the case.
`
`They're a Baedeker to the continuing bankruptcy bonanza, a world where the meter is always
`running - sometimes literally: in the months after Lehman's collapse in September 2008, the
`New York law firm Weil, Gotshal & Manges paid one car-service company alone more than
`$500 a day as limo drivers cooled their heels waiting for meetings to break (and this in a city
`overflowing \'\ith 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
`Bankruptcy Data.com, V\ith Lehman snaring honors as the biggest corporate belly-flop in
`American history.
`
`These megacases - Lehman, General Motors, Chrysler and Washington Mutual, to name a few
`- are orders of magnitude larger than most bankruptcies in the past, and their size and
`complexity have created a feeding frenzy of sorts for those asked to sort them out. To date,
`Weil, the lead law firm representing Lehman, has bil1ed the Lehman estate for more than $164
`million.
`
`0
`Analysts, lawyers and others involved in the larger bankruptcy boom say that ~
`legitimate - and that others are, at a minimum, highly questionable.
`
`MORE IN Bl
`Bits Blc
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`Protest
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`Read M:>re
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`Banla"~tcyFees Add Up in Cases Lile l.elvnan's - NYTirres.com
`"There's clearly pressure on people to create more revenue," says Robert White, a former
`bankruptcy partner at O'Melveny & Myers who retired in 2006 after practicing for 35 years.
`At one deposition he 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.
`
`With first- and second-year associates charging more than $500 an hour in some of these
`bankruptcy cases, according to court records, that can amount to some pretty expensive
`downtime. At several firms, including Weil and Milbank, Tweed, Hadley & McCloy, partners
`now charge $1,000 an hour or more for their bankruptcy services.
`
`But billable hours explain only part of the run-up in costs. In the seven months after the
`bankruptcy filing of G.M., which taxpayer dollars helped keep afloat, various law firms and
`other advisers received nearly $90 million. Lawyers from Weil, which has accounted for nearly
`$16 million of fees in that case, put in for $364.14 in dry cleaning as well as more than a week at
`the Sherry-Netherland hotel in Manhattan last summer, where one lawyer's room cost $685 a
`night.
`
`In court documents, the firm responded that it could be tough to find hotel rooms in New York
`City for $400 or less and that dry-cleaning or laundry bills were appropriate for out-of-town
`lawyers required to stay in New York for 9 or 10 days.
`
`TlilNK the lawyers are expensive? Meet the consultants. Alvarez & Marsal, a turnaround firm
`that is essentially running what remains of Lehman, has billed more than $262.1 million.
`
`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." In the G.M. case,
`Brownfield Partners has billed $230,209.55, including an $18 fitness-club charge at a hotel.
`
`A Brownfield partner said an employee didn't realize that there was a separate charge to use
`the fitness club and didn't notice it on the hotel bill. The firm agreed to remove the charge after
`the examiner brought it to the firm's attention.
`
`if some of the larger fees
`Analysts say that nickel-and-diming might be worth a laugh or two -
`weren't snowballing so quickly as well. 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 getjust 14.7 cents on the dollar for their claims,
`according to Lehman's proposed reorganization plan. Nor will they get their money quickly -
`some experts say they believe that the Lehman case could drag on for three to five more years.
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`Bankn.~tcy Fees Add Up in Cases Lite Lehman's - NYTilres.com
`6/11fl014
`Lawyers and restructuring pros who are picking up the pieces of companies swamped by the
`bankruptcy wave say that their fees are well deserved and that their services help make the
`bankruptcy process more efficient. And they say the pay is more than made up for by a tidier
`resolution of a financial debacle - or, as in G.M.'s case, the revivification of a wounded
`company.
`
`"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 Harvey Miller, 77, a Weil partner who is considered the dean of the bankruptcy
`bar.
`
`Many people in the industry 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 running the Chapter 11 case,
`that the creditors would essentially receive nothing," says Stephen J. Lubben, a professor at the
`Seton Hall University School of Law. "In those situations, it makes sense for sophisticated
`professionals to handle the case.''
`
`Others, however, have a distinctly different perception about the fees that advisers are
`harvesting in bankruptcies.
`
`"It violates any sense of proportion," says Kenneth Feinberg, the Washington lawyer who
`serves as the "pay czar" for banks bailed out by the government and whom the court appointed
`last June to monitor fees associated with the Lehman bankruptcy. The court asked him to
`participate after concerns were raised in the news media about the soaring fees in the Lehman
`case.
`
`"Unemployment is over 9 percent, and to be paying first-year associates $500 an hour angers
`the public," he observes. "People read about all of this and say that lawyers and the legal
`system are one more example of Wall Street out of control."
`
`Despite the rise in bankruptcy fees over the years, there was little or no public criticism or
`pushback until recently. Lawyers were reluctant to challenge their peers, fearing retaliation.
`Analysts say watchdogs from the United States Trustee's office, a part of the Justice
`Department that oversees bankruptcy cases and monitors billing practices and possible
`conflicts, were overworked and outgunned. Even as its workload has increased, the Trustee's
`office has seen its staffing fall to 1,323 in 2010 from 1,468 in 2007.
`
`Meanwhile, judges, many of whom used to work at the firms now benefiting from the
`bankruptcy boom, were also reluctant to challenge the status quo. All of this, analysts say, has
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`Ba!W~cy Fees Add Up in Cases Lile Lehman's - NYTirres.com
`fed a legal culture with few restraints on billing for bankruptcies.
`
`"I don't think professionals cheat the client, but in a number of ways they can talk themselves
`into doing things that they wouldn't do for clients outside of bankruptcy," says Nancy B.
`Rapoport, a former bankruptcy lawyer at Morrison & Foerster who teaches law at the
`University of Nevada, Las Vegas. "If you send eight people to a hearing because there is an
`outside chance they might have to speak at that hearing and you try that outside of bankruptcy
`the client will go ballistic."
`
`Now, however, a handful of fee examiners in several high-profile bankruptcies are taking a
`harder line on such charges, setting the stage for a confrontation with lawyers and consultants
`opposed to the moves. Both Mr. Feinberg and the examiner in the G.M. case, Brady C.
`Williamson, for instance, have suggested reductions in hourly fees charged by some firms.
`
`That's the kind of precedent that sets some of the bankruptcy industry leaders' teeth on edge.
`"Mr. Feinberg doesn't know what he's talking about," says Mr. Miller. "We don't generally give
`discounts. Just because bankruptcy has been the hot legal area for the last 19 months doesn't
`demand you cut fees."
`
`If Mr. Feinberg and others succeed in reining in certain fees and expenses, the outcome could
`reverberate through the bankruptcy universe.
`
`"This is a very important test case; it's bigger thanjust Lehman," observes Mr. Feinberg. "The
`culture of bankruptcy is unique."
`
`So what, asks Bryan Marsal, co-founder of the restructuring firm Alvarez & Marsal. "I don't
`care whether Feinberg or Moses comes into this case, you're not going to get me to apologize,"
`he says. "If you look at this case in the context of the billions of dollars that has been recovered
`and the billions of dollars in claims that have been managed, just because the case was big
`doesn't mean it was operated inefficiently."
`
`ON the evening of Sunday, Sept. 14, 2008, Mr. Marsal was sitting in his study in Westchester
`County, N.Y., when the phone rang.
`
`Calling was Mark Shapiro, who ran Lehman's restructuring practice. He told him that Lehman's
`lawyers were preparing a bankruptcy filing and that the board wanted Mr. Marsal's firm to
`oversee the bankruptcy and eventual liquidation after Barclays and others bought pieces of the
`firm.
`
`Since receiving that call, Mr. Marsal's firm has been billing $13 million to $18 million a month in
`fees and expenses for its work on Lehman, a 160-year-old name on Wall Street.
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`BarW14llcyFees Add Up in Cases Lile Letvnan's - NYTimes.com
`&1112014
`Mr. Marsal says the firm will most likely bill at $13 million a month through October,just after
`the second anniversary of Lehman's collapse. After that, rates will begin to decrease, although
`Alvarez & Marsal will also earn an incentive fee at the end of the case, which could total more
`than $so million.
`
`A jovial, self-deprecating man who points out a coffee stain on his shirt and, later, jokes that he
`wants to put on a blazer to hide a rotund midsection, Mr. Marsal is unapologetic about the fees
`that he and his staff are earning. Those fees pay for the salaries of the 150 people from Alvarez
`& Marsal now working inside Lehman (down from a peak of 185), including Mr. Marsal himself.
`He serves as Lehman's C.E.O., while John Suckow, an Alvarez & Marsal managing director, is
`Lehman's president and chief operating officer.
`
`"The size of this case justifies the size of the fees," says Mr. Marsal, shrugging as he sits in a
`conference room at Lehman's headquarters in Midtown Manhattan. Mr. Marsal and Mr.
`Suckow estimate that they have increased the potential recovery value for Lehman creditors
`by $4 billion to $5 billion in the last year.
`
`Indeed, deciding whether these firms and their sky-high fees are justified is difficult because
`the bankruptcy trade is in uncharted territory. Several of the companies that went bankrupt in
`the last two years were significantly bigger than Enron, in terms of assets, when it collapsed in
`late 2001.
`
`As if the magnitude of the bankruptcies weren't enough, there's also the matter of the complex
`financial instruments that some of the companies held.
`
`"There was commercial real estate, bank loans - all of that stuff is pretty well known to our
`team, but derivatives? We hadn't had much experience in derivatives," acknowledges Mr.
`Marsal, who added that his firm hired two subcontractors to work through Lehman's
`derivatives book.
`
`Mr. Miller adds that those derivatives, even today, are taking up a lot of time and energy.
`"We're still in the process of unwinding them," he says, "which raises all sorts of difficult and
`novel legal issues."
`
`In April, Lehman filed a plan with the court that would create an asset-management business,
`called Lamco, that would manage Lehman's real estate and private-equity assets for five years.
`
`By not selling some assets at fire-sale prices, the estate will be able to recoup much more
`money for creditors, notes Mr. Marsal
`
`"The money that's going to the creditors is my money," he says, pointing out that he's aligned
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`BanlG"l4>1cYFees Add Up in Cases Lile Lehman's· NYfimes.com
`6111/2014
`with the creditors' goals. That's because, at the end of the case, Mr. Marsal's firm will receive
`an incentive fee that is based on a percentage of the money returned to creditors.
`
`Mr. Marsal says critics should be careful about identifying where problems lurk in bankruptcy
`fees. He says the savings that result from making sure that no one is flying first class to Europe
`are "peanuts."
`
`"You should be much more worried about the two or three lawyers who are overbilling and
`whether they should even be in attendance at a meeting," he says. "I think the fee committee
`and the fee examiner is a lot of hooey."
`
`IF anyone is a master of getting to yes, it's Kenneth Feinberg. As a mediator, he brokered
`settlements in long-running product liability suits brought by those who said they were
`victimized by Agent Orange, asbestos and the Dcl.lkon Shield. More recently, he managed to win
`praise on delicate assignments like determining how much the Sept. 11 Victim Compensation
`Fund should pay out - or what is an appropriate salary for an executive at a financial
`institution that the government propped up with taxpayer funds.
`
`But he says that challenging bankruptcy lawyers is tougher in some ways. "In the 9/ 11 case, the
`country was behind me; as pay czar, there was a lot of support for what I was doing," he says.
`"This is more problematic."
`
`In particular, Mr. Feinberg is perplexed by why fees keep rising in the Lehman case, even
`though it's no longer the chaotic affair it was in the weeks and months after the bankruptcy
`filing. "Now the emergency is over; it is more like a traditional bankruptcy," he says. "Yet the
`fees are higher than ever."
`
`Mr. Feinberg has managed to get under the skin of the lawyers in the case. And he is equally
`frustrated. His voice rising and Boston accent thickening (think "debt-ah" and "credit-ah"), he
`says that bankruptcy professionals "still haven't gotten the message."
`
`The four-member Lehman fee committee, of which Mr. Feinberg is chairman, has disagreed
`about how to rein in fees, he says. But he declines to elaborate. Mr. Miller says it's because
`creditors and debtors are willing to pay well so they can get "the best representation possible."
`
`On a rainy summer day last year, Mr. Feinberg journeyed to the plush offices of Mr. Miller in
`the General Motors building in Manhattan. His pitch was simple: Cut 10 percent to 15 percent
`right off the top of the fees being billed
`
`Mr. Miller and Dennis Dunne, a partner at Milbank who represents creditors, told him, "You
`don't know how complicated this is; you don't know how difficult it is," Mr. Feinberg recalls.
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`Mr. Miller doesn't dispute Mr. Feinberg' s account, and Mr. Dunne declined to comment for this
`article.
`
`Despite these frictions, a deal was eventually struck.
`
`Among the new fee rules being enforced are these: Air travel must be in coach class only.
`Ground transportation is limited to $100 a day, and only after 8 p.m. Hotel rooms are capped at
`$500 a night. Photocopy charges are limited to 10 cents a page. Late meals can't be more than
`$20 each.
`
`"If you continue to violate the very guidelines that are in place, 50 percent of the disputed
`amounts will be deducted," says Mr. Feinberg. After that, the full amount will automatically be
`deducted, he added.
`
`The lawyers reserve the right to challenge the fee committee's decisions at the end of the case,
`but the ultimate call will be up to the bankruptcy judge, James Peck. He declined to comment.
`
`Mr. Feinberg has so far challenged a very small percentage of the fees and expenses in the case.
`But he is intensifying his efforts. In March, the court increased his monthly budget to $250,000
`from $75,000, giving Mr. Feinberg more accountants, examiners and others to pore over
`records and to zap overcharges. His firm and the fee committee have billed the Lehman estate
`$645,000 in fees for services through March.
`
`Already, he's called out Jones, Day, saying it charged $70,800 extra for photocopying and spent
`$2,856 too much on taxi rides last summer. According to court filings, a Jones, Day partner,
`William Hine, claimed more than $2,100 for late- night rides home in one month. Milbank,
`according to court filings, charged $148,426 just to compile its bills and time records - a move
`akin to a doctor charging a patient to prepare a bill after expensive, complex surgery.
`
`"Lawyers don't charge for invoice preparation except in bankruptcy," Mr. Feinberg says. "I've
`prepared bills my entire professional life. You don't charge a fee. Most people would argue that
`charging anything is inappropriate."
`
`Jones, Day and Milbank both declined to comment.
`
`Like the restructuring executives, bankruptcy lawyers seem defiant and want to make sure
`precedents aren't set that would make it easier to curb fees in the future.
`
`"When people work late and they want to go home, we don't like to send people in the subway
`at midnight or thereafter," Mr. Miller says. "I don't believe it's appropriate to require people to
`fly coach for 15 hours and then go to a meeting."
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`Nevertheless, Mr. Miller is going along with Mr. Feinberg's guidelines.
`
`"Those are the rules; we're going to abide by the rules and pick up the difference," Mr. Miller
`says.
`
`FOR all his annoyance at Mr. Feinberg's role in the Lehman case, Mr. Miller saves his real
`vitriol for Mr. Williamson, the fee examiner in the G.M. bankruptcy, which Weil also worked on.
`In the case's first seven months, Weil accounted for $16.5 million of the $90 million in fees paid
`Mr. Williamson objected to a small portion of the expenses. Weil, according to court documents,
`agreed to deduct $soo in expenses relating to the cancellation of a vacation, and said that any
`first-class travel charges were included "inadvertently" and reduced It also agreed to pay for
`any meals in excess of $20.
`
`Mr. Williamson also recommended that a 5 percent cut in Weil's overall rates would be
`"appropriate," especially given that several other large firms in the case already provided
`discounts.
`
`"Williamson is way off base," says Mr. Miller. "He perceives himself to be a sage, giving advice
`to the world, and that is not his role."
`
`Mr. Williamson wrote in an e-mail message: "Courts appoint independent examiners to help
`ensure transparency and accountability, most recently where tax dollars and significant
`economic issues are at stake. Not everyone, unfortunately, always appreciates either the role or