Sports Authority’s demise is bad news for landlords left with 40,000-square-foot holes in their shopping centers, and for consumers faced with one fewer discount-happy retailer. But it’s great for bankruptcy attorneys.
Eight lawyers from the New York firm of Gibson, Dunn & Crutcher LLP are collecting more than $1,000 an hour to represent the debtors and debtors-in-possession in the Delaware bankruptcy case, according to court documents. They are:
- Mitchell Karlan: $1,295 an hour
- Robert Klyman: $1,215 an hour
- Dennis Arnold: $1,110 an hour
- David Battaglia: $1,110 an hour
- Jennifer Bellah Maguire: $1,110 an hour
- Robert Blume: $1,090 an hour
- Matthew Williams: $1,060 an hour
- Cromwell Montgomery: $1,055 an hour
The attorneys are part of an army of bankruptcy specialists who billed $1.91 million in hourly fees for March alone, a sum the firm discounted to $1.8 million. The lowest hourly fee — $380 — was billed by an “e-discovery specialist.”
Another firm, Irell & Manella LLP of Newport Beach, California, has two attorneys collecting $1,135 an hour. A third firm, Young Conaway Stargatt & Taylor LLP of Wilmington, Delaware, is charging fees that top out at $780 an hour.
Why so much? Partly because bankruptcy law is specialized. Here’s how Stephen Lubben, a professor of bankruptcy law at Seton Hall University, explained the economics to me in 2013:
From a common-sense perspective, the idea that you’re spending a lot of money to go bankrupt is counterintuitive … In bankruptcy, there’s very little incentive for management to be thrifty. They will be criticized if things go poorly, but they will never be criticized for spending too much money on professionals.