Lawyers and other advisers who advised Eastman Kodak Co on their bankruptcy could stand to receive USD 240 million in fees. This was after fee examiner Richard Stern recommended the fees to Judge Allan Gropper who is likely to give his approval next week, according to a Reuters report. In a report to the US Bankruptcy Court in Manhattan, Stern recommended the approval of fees amounting to USD 235.8 million and expenses worth USD 7.2 million.
In bankruptcy proceedings, professionals who bill the bankrupt company's estate must disclose their fees in public. Although a major portion of the fees are paid to the firms while the case is going on, the fees are still needed to be approved by the court after the proceedings are completed, Reuters said.
Judges usually get the help of examiners to look over the bills and give their recommendations to see if these are reasonable in large bankruptcy cases, such as those of Kodak's, the report said. The examiners pointed out expenses that seem too large and get the companies to lower them. If all parties cannot agree, the judge decides on the matter. In the case of Kodak, Stern said in his report that Kodak fees were cut by an estimated USD 8.2 million through consensual agreements.
According to Reuters, bankruptcy proceedings provide a huge business opportunity for advisers and corporate law firms. Kodak filed for Chapter 11 bankruptcy protection last year. The photography firm said it had liabilities worth USD 6.7 billion. There were 23 firms comprised of Kodak representatives or official creditor committees that billed the estate of Kodak for their fees and expenses.
In September, Kodak emerged from bankruptcy and placed commercial printing and digital imaging as its focus. Post-bankruptcy, the company reported that it had USD 839 million in cash and USD 679 million in debt.
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