Following a defeat at the U.S. Supreme Court last summer, Baker Botts proposed a change in the way it charges for bankruptcy work, hoping to cover its financial bases if a chapter 11 client later sues the firm after emerging from bankruptcy. However, Bankruptcy Judge Brendan Shannon in an order on Monday shot down a modified fee structure in Baker Botts’ application to serve as lead debtors’ counsel for New Gulf Resources LLC, an Oklahoma-based energy company that filed for chapter 11 protection on Dec. 17, American Lawyer reported today. The order follows a letter ruling from the judge late last week rejecting the firm’s fee proposal. In its application to represent New Gulf in the bankruptcy, Baker Botts sought to build in a layer of financial protection while also respecting the Supreme Court’s June 15 ruling in Baker Botts v. Asarco, which restricted the firm’s ability to recover bankruptcy litigation costs.
