Cal Dive International Inc. was an early victim of the plunge in oil prices. What might have been a respectable reorganization at the outset turned into a disaster. The lenders tried unsuccessfully to force the creditors' lawyers into bearing some of the losses.
The lenders blanched at the thought of paying about $1 million to the creditors' committee's primary counsel for the first ten weeks in chapter 11. Cal Dive provided underwater services for offshore drillers.
Although the committee's principal lawyers lowered their fee request by more than $100,000, the lenders wanted to cut almost $400,000 more, contending the case was a financial disaster.
Bankruptcy Judge Christopher S. Sontchi in Delaware sided with the committee counsel and approved the lawyers' interim fee request of some $880,000. He said the committee's counsel fees were not "vastly disproportionate" to the $1.56 million run up by the debtor's primary counsel in the same period.
The case thus might be cited for the proposition that committee counsel fees equal to 56.5% of the cost of the debtor's lawyers passes muster in Delaware.
In the process of approving the interim fee application without further reduction, Judge Sontchi noted that the creditors' counsel fees were about 30% of the total professional costs during the initial interim fee period. That statistics might indicate another acceptable ratio in Delaware.
Judge Sontchi implied that he was mollified by the firm's substantial reduction in expenses during later fee periods.
The Cal Dive committee's counsel is Akin Gump Strauss Hauer & Feld LLP.