CHICAGO -- Detroit's Chapter 9 bankruptcy will cost the taxpayers $170 million in fees to attorneys and advisors, the city disclosed in a
The disclosure follows court-ordered mediation between the city and attorneys to settle a dispute over the fees. The original tab reportedly reached as high as $200 million. Former Detroit Emergency Manager Kevyn Orr, who oversaw the bankruptcy, had crafted a $177 million budget as part of the city's overall restructuring plan, which shed $7 billion of debt.
The new filing does not detail which firms agreed to discount their fees.
Jones Day, the city's lead attorney throughout the 18-month Chapter 9 process, was paid $57.9 million, the highest single tab.
Miller Buckfire, the city's investment banker and advisor, was paid $23 million.
Ernst & Young, the city's financial restructuring advisor, was paid $20.2 million, and Conway Mackenzie, the operational restructuring firm, was paid $17.3 million.
Miller Canfield, the city's local bankruptcy firm and its bonds counsel, got $6.7 million, with a separate $400,000 listed for "labor" services.
Counsel and advisors for a retirement committee set up solely to represent the city's retirees, which Detroit agreed to pay for, were paid another $25.6 million. The largest tab, $15.4 million, came from Denton, the law firm that represented retirees. Another $5.6 million went to Lazard, acting as retirees' financial advisor.
Phoenix Management Services' consultant Martha Kopacz, a municipal finance restructuring firm hired by U.S. Bankruptcy Judge Steven Rhodes to act as an independent municipal finance expert, earned $1.3 million.
The State of Michigan reimbursed the city $5.3 million for various fees, according to the filing.
The city paid $164 million out of its general fund.
An additional $11.96 million came from fees paid directly by the city's two pension funds. The pension funds paid law firm Clark Hill $6.25 million and Greenhill $5.7 million.
A separate $1 million was paid out of an enterprise fund.
Rhodes on Dec. 15 gave the city a little more than 10 days to submit and disclose the final cost of what was the largest municipal bankruptcy in the U.S. to date. The bankruptcy officially ended Dec. 10, but wrangling over the fees continued. The final agreement was reached in court-ordered mediation. The mediators earned just under $1 million for their work in the case. The head mediator, U.S. Chief District Judge Gerald Rosen, was not compensated.
