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Old GM billed $23M in bankruptcy filing

October 26, 2009

Old GM billed $23M in bankruptcy filing

The Detroit News

A consulting firm is charging General Motors’ bankruptcy estate more than $23 million for three months’ work leading up to and following one of the largest corporate bankruptcy filings in U.S. history.

According to a quarterly report filed Thursday in U.S. Bankruptcy Court, crisis management firm AP Services LLC charged GM and its bankruptcy estate $23 million for about 90 days of work and expenses that included airfare, hotels, meals and rental cars. U.S. Bankruptcy Court records give the most detailed look at costs related to GM’s bankruptcy case and offers insight into the number of people needed to prepare GM to be dismantled and liquidated.

AP Services, headed by Al Koch, who doubles as the chief restructuring officer of GM’s bankruptcy estate, had a team of 153 people working on GM’s bankruptcy case, and several charged $835 an hour in June.

Tim Yost, a spokesman for the old GM, which is known as Motors Liquidation Co., declined comment Friday.

The billings included $455,000 for three months’ work for Koch and more than $108,000 for a paraprofessional.

His team’s hourly rates fell in July following complaints from the U.S. Justice Department’s bankruptcy court monitor and creditors, who said the rates were unreasonable and might not leave enough money to cover claims.

The old GM has access to $1.175 billion in debtor in possession financing from the government to use in winding down the company’s unwanted assets.

AP Services wrote in court filings that it managed GM’s transition into bankruptcy court, effectuated the sale of most of GM’s assets to a government-sponsored entity and manage the estate’s day-to-day operations.

By comparison, the chief restructuring officer’s team overseeing the bankruptcy case of Lehman Brothers Holdings charged $32.8 million for professional services and expenses in the first three months of work.

AP Services is asking U.S. Bankruptcy Judge Robert Gerber to approve the fees, though interested parties have until Nov. 12 to file objections.

Meanwhile, a hearing is scheduled for Wednesday during which Gerber could approve the hiring of a second consultant, Evercore Group LLC, as the old GM’s investment banker and financial adviser."> (313) 222-2028

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