As noted in this previous post, former Weil, Gotshal & Manges bankruptcy partner and current Greenhill & Co. investment banker Harvey Miller is arguably the most leader of the movement over the past 30 years to elevate the compensation of corporate reorganization lawyers to levels commensurate with that of other corporate and securities lawyers. In so doing, Miller was not accustomed to losing many disputes over his firm’s fees in big reorganization cases, but — as the Wall Street Journal’s ($) Nathan Koppel reports here — Miller absorbed a hit on his fees as an investment banker earlier this month that could be the largest in the history of US corporate reorganizations.
Based on a July 21 ruling of New York Bankruptcy Judge Robert Drain, Miller’s employer — New York investment bank Greenhill & Co. — must return $4.6 million of the more than $11 million the firm was paid as an adviser to Loral Space & Communications Ltd. in the satellite company’s chapter 11 case. Judge Drain concluded that Greenhill had improperly claimed a bonus for advising Loral in its 2003 bankruptcy and that Greenhill’s retention agreement did not authorize such a bonus. Greenhill was allowed to retain the $7 million balance of its compensation.
As noted in the previous post, my sense is that Miller and attorneys at the Akin, Gump law firm are not going to be exchanging holiday greeting cards any time soon.