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Flood of Fees Draining Enron Funds
$496 Million in Charges Rung Up So Far by Lawyers, Others
The Washington Post
Saturday, June 28, 2003; Page A01
By Peter Behr
Washington Post Staff Writer
© Copyright 2003 The Washington Post Company
| A year ago, an Atlanta attorney caught a plane for a meeting in
Washington to continue his firm's work for the creditors of Enron Corp. As
the miles flew by, he sketched out questions and reviewed some of the
Houston company's secretive off-book partnership deals. By the time he arrived for the meeting, Aldo LaFiandra, of the Alston & Bird firm, had added $1,125 to the legal bills charged to Enron in a colossal bankruptcy reorganization that is still slogging forward 19 months after the company's collapse. One lawyer's charge for thinking time is just another grain in a mountain of fees totaling $496 million through May. Some experts say the mounting tally is inevitable, given Enron's boundless swamp of financial transactions. To others, the fees are a fitting final chapter to the company's story of greed and excess. ... John W. Toothman, president of the Devil's Advocate, a Northern Virginia company that scrutinizes legal fees, and co-author of a textbook on fees, calls it a "feeding frenzy." Enron "has turned its pockets inside out, and everybody who can get in line gets a piece. The lawyers have been first in line." ... But Patchan has barely chipped at the mountain. Of $60.6 million in fees he has reviewed so far this year, he recommended knocking off $2 million, a 3 percent reduction. "They are not challenging any more than a tiny fraction of the bills. They are nitpicking," said Toothman. ... A lawyer's client can influence the size of legal bills, but a monster bankruptcy case like Enron's can overwhelm oversight, Toothman said. "The incentives are to throw as many bodies at it for as much time as possible. . . . Nobody will have the stamina to unravel it." |