At least someone is going to make money off of Lehman Brothers’ bankruptcy.
Lehman Brothers Holdings Inc.’s restructuring officer, Bryan Marsal, asked a court to pay his firm incentive fees as high as 25 per cent on top of the hourly rates he’s charging to liquidate the bank.
Marsal’s company, Alvarez & Marsal, has 125 employees helping Lehman sell assets and unwind trades. Marsal previously asked for $2.5 million upfront and hourly fees of as high as $850 for himself and other top executives. Under a proposal filed yesterday, A&M would start earning its bonus after recovering $15 billion for unsecured creditors of Lehman, which listed $613 billion in debt.
“Especially in a case like this, where the firm is also getting hourly rates, you would not want to have triggers for the incentive payments that are too easy to meet,” said Stephen Lubben, who teaches at Seton Hall University School of Law in Newark, New Jersey. “The triggers do seem to be low, and at the very least A&M should offer some explanation for why this should be so.”
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