Kodak bankruptcy advisers likely to see $240 million payday

Thu Nov 14, 2013 5:51pm EST
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By Nick Brown

NEW YORK (Reuters) - A lawyer tasked with reviewing advisers' fees in Eastman Kodak Co's (KODK.N: Quote) bankruptcy on Thursday gave his blessing to more than $240 million in bills, priming them for court approval next week.

Fee examiner Richard Stern recommended approval of about $235.8 million in fees and another $7.2 million in expenses, according to an 87-page report in U.S. Bankruptcy Court in Manhattan.

The fees on Tuesday will go before Judge Allan Gropper who, absent any objection from Stern, is likely to approve them.

Fees from lawyers, financial advisers and other professionals who bill a bankrupt entity's estate must be filed publicly. While the lion's share are paid to firms as the case goes on, they nonetheless remain subject to court approval at the end.

In large cases like Kodak's, judges often tap examiners to pore over the bills and offer recommendations as to whether they are reasonable. Examiners flag expenses that seem inappropriate or inflated and try to get firms to reduce them. If sides can't reach a compromise, the dispute goes to the judge.

In his report, Stern said Kodak fees were reduced by about $8.2 million through consensual deals.

Bankruptcy is big business for corporate law firms and advisers and Kodak's was no different.

The photography pioneer filed for Chapter 11 in 2012, listing about $6.7 billion in liabilities, and 23 firms representing Kodak or official creditor committees billed the estate for their costs.   Continued...

DVD's by Eastman Kodak Co are displayed in a retail store in San Diego, California, April 22, 2013. REUTERS/Mike Blake