Steward Health Care lawyers seeking $36 million
Lawyers for Steward Health Care were awarded more than $36 million — or more than $420,000 per day in fees — for their work on the first three months of the company’s bankruptcy case.
New York-based law firm Weil, Gotshal & Manges filed a request Tuesday for reimbursement of $36,255,939.14 for fees and expenses, which included rates for attorneys billing as much as $2,350 per hour. Other rates included $750 per hour for a law clerk, and up to $595 per hour for paralegals.
US Bankruptcy Judge Christopher Lopez in Houston, who is overseeing the case, approved the request on Wednesday afternoon. The funds will come out of Steward’s assets — which otherwise would go towards paying off its billions of dollars in unpaid debts.
Steward filed for bankruptcy on May 6, after years of expansion and borrowing left the hospital chain unable to pay its bills. Lawmakers and other critics have charged Steward’s former chief executive Ralph de la Torre and his financial partners, private equity firm Cerberus Capital Management and real estate investment trust Medical Properties Trust, extracted vast profits while loading the company with debt, leading to the bankruptcy.
To back up the billing request, Weil Gotshal provided detailed billing records in a 1,998-page filing last month. The firm said its lawyers and other staff had worked for almost 28,000 hours on the case. Among the dozens of professionals included in the filing, one partner billed almost $1.5 million for 857 hours of work.
Some of the law firm’s newer lawyers worked among the most hours on the Steward case, according to the billing records. One associate who passed the bar this year worked 636 hours on the case billed at $830 per hour, for a total of more than $528,000. And two third-year associates who worked about 800 hours on the case each billed more than $1 million.
The firm didn’t respond to request for comment, but it defended the fees in the legal filing.
The rates “are no greater than the rates Weil charges for professional and paraprofessional services rendered in comparable bankruptcy and non-bankruptcy related matters,” the firm said in its filing. “Such fees are reasonable based on the customary compensation charged by comparably skilled practitioners in comparable bankruptcy and non-bankruptcy matters in a competitive national legal market.”
None of the hundreds of parties in the case filed objections to Weil, Gotshal’s bill, first submitted on Sept. 16. But the firm said it had reduced its request by about $28,000 after the US Trustee, which manages the bankrupt company’s estate, had objected in “informal comments.”
Lopez on Tuesday also approved a three-month bill of $11.8 million from Chicago-based law firm McDermott Will & Emery, which is representing debtors in the case.
Steward, which once oversaw a network of 31 hospitals across eight states, has been selling off the facilities to pay its creditors. Sales of six Massachusetts hospitals brought in $343 million and three Florida hospitals garnered $439 million. Almost all of the Massachusetts proceeds went to investment firm Apollo Global Management, but Steward’s estate received most of the money from the Florida sales.
Aaron Pressman can be reached at [email protected]. Follow him @ampressman.
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