Investment bank Lazard, which advised retiree negotiators during Detroit's bankruptcy, slashed about $3 million off its bill, the Detroit Free Press reported today. The firm's revelation is the first in what is expected to be a series of statements by law firms, financial advisers and consultants about how much they cut their fees in Detroit's historic restructuring. Bankruptcy Judge Steven Rhodes, who retains the power to decide whether the fees were reasonable, had invited bankruptcy professionals to consider revealing how much they reduced their fees before he makes a decision. Collectively, advisers to the city and the retiree committee charged about $170 million in the bankruptcy, which ended in December and will allow Detroit to slash $7 billion in liabilities and reinvest $1.7 billion over 10 years in services. Lazard — which helped negotiate a settlement on pension cuts and retiree health care benefits on behalf of the U.S. government-appointed Official Committee of Retirees — had accumulated a bill of $8.44 million for its work on the case. But it's only charging the city $5.56 million after agreeing to a 37% cut in mediation sessions overseen by U.S. District Chief Judge Gerald Rosen, the chief mediator in the bankruptcy. The city agreed at the beginning of the bankruptcy to pay the retiree committee's costs.
