Attorney and financing fees for a first round of reimbursements sought by firms providing services to Eastman Kodak Co. total $15.4 million, documents filed in the former photo giant’s Chapter 11 bankruptcy show.
The reimbursement requests cover a 40-day period stretching from Kodak’s Jan. 19 filing of a Chapter 11 petition to Feb. 29. Fees are continuing to mount as the case, which could take a year or longer to resolve, continues.
The $8.8 million fee request from Kodak’s investment banker, Lazard Freres & Co. LLC, is the biggest amount sought. Subtracting a 20 percent holdback amount from the billing, the investment banker is only immediately seeking some $7 million, its Tuesday filing states.
Kodak’s lead law firm in the bankruptcy, Sullivan & Cromwell LLP, claims billable hours totaling $5.3 million for the next highest request. A lower-tier firm working for Kodak in the bankruptcy, Young, Conway, Stargatt & Taylor LLP, is asking for fees totaling $669,607.50. Linklatters LLP, a special counsel to Kodak for offshore matters, is asking for $323,292. Asking the least in fees, $31,616, is the Groom Law Group, Chartered Special Counsel.
Falling under the general rubric of administrative expenses, fees racked up by law firms, accounting firms and others serving a debtor in Chapter 11 cases are paid from the debtor’s estate and thus can reduce payouts to creditors. Whether Kodak would propose to fully or partly pay sums owed to trade creditors will not be known until it files a reorganization plan, and even that Kodak has indicated would come months in the future.
Not yet filed in the case are fee requests from attorneys for special committees such as a committee formed to represent the interest of unsecured creditors.
One such committee could be formed to represent the interests of retirees whose company sponsored Medicare health plans Kodak wants to eliminate. Bankruptcy Judge Allan Gropper on Tuesday put off a decision on whether to let Kodak cut some retiree health plans and said that retiree groups’ requests to form a committee to guard their interests should be considered.
Kodak earlier filed a motion seeking to end its support of some 16,000 retiree Medicare plans. It proposed to end coverage for non-vested retirees May 1. The move would affect anyone who retired after Oct. 1 1991.
In a statement issued by the Eastman Kodak Retiree Association, EKRA president Bob Volpe pronounced the association “extremely pleased with (Gropper’s) decision.” EKRA would work with the U.S. Trustee to form a broad-based retiree committee that would advocate for some 50,000 U.S. Kodak retirees, Volpe said.
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