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"Puerto Rico Atty Fees Of $50M OK'd Amid Billing Concerns" (Law360)

The attorneys and other professionals working on the Puerto Rican public’s dime in landmark court proceedings to restructure the territory’s crippling debt had their first applications for fees authorized Wednesday, totaling near $50 million, after being warned about billing practices and the close scrutiny they are under.

U.S. District Judge Laura Taylor Swain said at a court hearing Wednesday in San Juan that she took to heart concerns raised in a fee examiner report filed last week over professional travel expenses, excessive legal staff appearances and duplicative work. Judge Swain, who has presided over the territory’s bankruptcy-like cases for 10 months, said she is “keenly aware” of the challenging legal issues before her, but that the people of Puerto Rico simply can’t afford to spend billions on professional fees.

“The eyes of history are on all of us,” she said. “The careful use of resources in working through these unprecedented and highly complex problems is essential.”

For their work over the first five months of what amounts to the largest municipal bankruptcy in history, the legal and financial professionals hired to represent Puerto Rico’s government, public corporations, pensioners and committee of unsecured creditors requested $77 million in fees and expenses. An appointed fee examiner recommended that Judge Swain approve about $50 million of those charges, while another $26 million is under further review until April.

In his report, examiner Brady Williamson identified “problematic billing practices” and other areas of concern that have been discussed with the firms and others involved in the proceedings. Zeroing in on one of Williamson’s primary concerns, an attorney for the examiner told Judge Swain on Wednesday that far too many attorneys and staff are attending court hearings and mediation sessions.

“Attendance is of great concern not just to the examiner, but to the government of Puerto Rico as well,” said Katherine Stadler of Godfrey & Kahn SC.

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