Puerto Rico gov’t objects fees charged by creditor committee’s counsel
SAN JUAN — The Puerto Rico government objected earlier this week certain legal fees and expenses billed by counsel of the official committee of unsecured creditors because it is “exceedingly high.”
According to a document filed Tuesday in court by lawyers representing the Fiscal Agency & Financial Advisory Authority (Fafaa), a letter dated Aug. 25 was received by the government containing the fees charged by the committee’s counsel, Paul Hastings, for services rendered until July 31.
As counsel to an official creditor committee, the debtor—in this case, the commonwealth government—is responsible for paying its fees.
“Paul Hastings has requested payment of fees in the amount of $3,265,033.55 and reimbursement of expenses in the amount of $128,519.42,” the motion reads.
The committee of unsecured creditors was created in June by the U.S. Trustee. On Aug. 10, judge Laura Taylor Swain approved the retention of the law firm as counsel to the committee.
According to procedures for interim compensation and reimbursement of expenses of professionals approved by the court in late August, that requires professionals hired by official committees or the court as part of Title III bankruptcy proceedings, to file a statement detailing “compensation for services rendered and reimbursement of expenses incurred during [the] preceding month or months.”
The interim compensation order further provides that if any party wishes to object to such statements, it must file a written objection with the court.
In the case of Paul Hastings, “[Fafaa] finds that the amount of compensation requested in the Fee Statement is exceedingly high and objects to the Fee Statement on that basis,” the motion states.
The commonwealth government added that it intends to continue to review the fee statement and reasonableness of the time entries, as well as the related requests for reimbursement of expenses.
“Accordingly, while [Fafaa] does not oppose the payment of 80% of the fees requested in the Fee Statement and reimbursement of expenses at this time, [Fafaa] reserves all rights with respect to any Interim Fee Application filed by Paul Hastings pursuant to the Interim Compensation Order for the period covered by the Fee Statement,” the motion reads.
The committee representing unsecured creditors in Puerto Rico’s Title III cases currently include the American Federation of Teachers, the Service Employees International Union, Doral Financial Corp., Genesis Security, Puerto Rico Hospital Supply, Total Petroleum, Unitech Engineering and Vitol. Most recently, Peerless Oil & Chemicals—a creditor of the Highways and Electric Power authorities—was appointed to the committee.