Professional Fees in WorldCom Case Top $600 Million

The biggest bankruptcy case in U.S. history has piled up the biggest-ever bill for professional fees - $613 million.

Consultants, lawyers and other advisers who guided MCI Inc. through its bankruptcy proceedings are asking the U.S. Bankruptcy Court in New York to approve the fees. More than half the $613 million will go to KPMG LLP, Deloitte & Touche LLP and Deloitte Consulting LLP, who are seeking $173 million, $142 million and $32 million, respectively.

U.S. Bankruptcy Judge Arthur J. Gonzalez, however, has the discretion to reduce the fees, Bloomberg reported.

"The fees are extremely high," said Lynn M. LoPucki, a University of California at Los Angeles professor. "They make more sense when you look at the number of firms hired in the case."

About 45 firms worked with MCI, then known as WorldCom Inc. The second-biggest U.S. long distance telephone company filed for bankruptcy protection in July 2002, and emerged from bankruptcy in April.

The Washington Post had reported that WorldCom was being charged about $10 million a month in professional fees. Gonzalez named a fee audit committee to oversee the bills submitted to the court, and the committee has recommended fee reductions.

LoPucki said judges typically approve payment of about 98 percent of the fees. He predicted that the fees will not top those of Enron's in the end. Professional fees for Enron's bankruptcy proceedings could hit $700 million, he said.

You may like these other stories...

Here's a CPA who truly walks the walk. On March 15, Frank Ryan, CPA, departed San Diego, California, with plans to be in Ocean City, Maryland, by July 2 to teach a course at the Maryland Association of CPAs’ (MACPA...
When Theodore J. Flynn first joined the Massachusetts Society of CPAs (MSCPA) in 1970, it was a different world and a different profession.  The "Big Eight" were still headquartered in Boston. Vietnam War...
Accountant Rickey Charles Goodrich had it a little too good. Many bean counters would kill to serve as financial guru to the likes of Pearl Jam. Goodrich was hired in 2005, and the following year, he became the CFO of Curtis...

Already a member? log in here.

Upcoming CPE Webinars

Nov 5Join CPA thought leader and peer reviewer Rob Cameron and learn ways to improve the outcome of your peer reviews while maximizing the value of your engagement workflow.
Nov 18In this session Excel expert David Ringstrom, CPA tackles what to do when bad things happen to good spreadsheets.
Nov 19How do you minimize redundant work and unnecessary steps to maximize the amount of work moving through your firm?
Nov 20Kristen Rampe will share how to uncover new opportunities with your clients by asking powerful questions.