It costs a lot of money to cut people’s paychecks.
The Star Tribune’s bankruptcy is all over but the counting, but lawyers and financial consultants submitted fees and expenses totaling $12.9 million last week.
The Strib’s bankruptcy lawyers, Davis Polk & Wardwell, topped the list at $6.32 million, while its restructuring consultants, Blackstone Advisory Services, billed $4.42 million. (All firms are based in New York unless otherwise noted.)
Curtis, Mallet-Prevost Colt & Mosel, which handled Strib legal matters when Davis Polk had a conflict, seeks $240,000 in fees and expenses, and Jones Day, the debtors’ “special labor counsel,” stands to gain $346,000.
Lowenstein Sandler, which advised unsecured creditors (who received roughly a penny on the dollar), billed $828,000. Los Angeles-based Chanin Partners, those creditors’ financial advisers, seeks $730,000.
Total: $12.884 million.
For perspective, the Strib is expected to gross somewhere between $190 million and $200 million this year, with operating revenue running about $10 million ahead of cash expenses including interest costs. The latter figure does not include bankruptcy-related charges, which will reduce the paper’s cash holdings from the high $30 millions to mid $20 millions.
At the outset of bankruptcy, the Strib sought $30 million in annual labor cost cuts, including $20 million from its unionized workforce.
The bills cover bankruptcy expenses through Aug. 31; the Strib exited Chapter 11 on Sept. 28. More bills may be filed this week, though none are expected to be as large as Davis Polk’s or Blackstone’s.
U.S. Bankruptcy Judge Robert Drain has not yet signed off on the expenses; objections can be filed through Oct. 23, with a hearing scheduled for Nov. 4.