May 2, 2011

DOJ charges Borders with "vague and lumped" records — and wicked expensive lawyers — in bankrupcty case

by

The Justice Department has complained to the judge in the Borders bankruptcy case that the bookseller “hasn’t shown that it can pay the costs of its bankruptcy case and should be denied requests to pay lawyers and other professionals,” according to a Bloomberg News wire story.

U.S. Trustee Tracy Hope Davis, of the Justice Departments bankruptcy watchdog office, “objected to monthly statements of compensation and expense reimbursements for 11 professionals working on the case,” says the report. She noted for example that Borders’ legal team at Kasowitz, Benson, Torres & Friedman LLP had requested payment of $1.27 million for the period extending from Feb. 16 to March 31, but hadn’t filed an operating report for that time.

The drill-down on the legal team’s application for that $1.27 million doesn’t make them look any better, either:

Kasowitz’s application contains “both vague and lumped time records,” the trustee said, questioning a request to reimburse $679 for cab and limousine services and $2,369 for meals. The firm also seeks fees for an “excessive” number of attorneys at 76 hours of court hearings, according to the trustee. Seven Kasowitz attorneys attended Borders’s first-day hearing and four or five were at others, the trustee said.

An attorney for Kasowitz, Andrew Glenn, responded that Borders would be making a payment to the Trustee’s Office immediately.

Dennis Johnson is the founder of MobyLives, and the co-founder and co-publisher of Melville House.

MobyLives