Billionaire investor Wilbur Ross told the ABI Commission to Study the Reform of Chapter 11 that the hourly billing system that they use to get paid is “primitive” and encourages frivolous legal actions, the Wall Street Journal's Bankruptcy Beat blog reported. A bankruptcy professional’s hourly rates have grown "infinitely faster than inflation for as long as I can remember," Ross said Friday at ABI's Annual Spring Meeting, which more than 1,000 people had registered to attend. Bankruptcy judges who are tasked with approving the fees have a tough time figuring out what’s appropriate, he said. Ross suggested that the problem could be fixed if attorneys either were not paid for pursuing losing actions or if compensation were capped using a benchmark that could be based on hourly rates in recent cases. Bankruptcy professionals who are working on exceptionally difficult cases like that of Lehman Brothers or Washington Mutual could ask a judge for special permission to be paid more, he said.
