In a nice bit of self-investigation, the Chicago Tribune has analyzed the bankruptcy filings of its parent, Tribune Co. and turned up some interesting information. Quick background: after a long, tumultuous hostile-cum-friendly negotiation, billionaire real-estate investor Sam Zell signed a deal to acquire the media conglomerate in April, 2007 at an enterprise valuation of $8.2 billion. The deal closed in December, 2007, at which time he is reported to have said “I’m here to tell you that the transaction from hell is done.”
Little did he know, the worst was yet to come. By March of this year, just three months after closing, Zell had already retained Sidley & Austin to advise on possible bankruptcy matters, or not, depending on whom you believe. On November 24, Tribune paid a $3.5 million retainer to the firm, then topped it up two weeks later with another million on December 4. AmLaw catches a bit of a discrepancy. On the one hand, we have this:
In a declaration, James Conlan, cochair of the firm’s restructuring group, charts the work Sidley has done since March and characterizes that work as “services rendered in contemplation or in connection with the restructuring efforts of the Debtor and the filing of these Chapter 11 cases.”
But Tribune doesn’t quite agree.
A Tribune Co. spokesman told the Chicago Tribune that “much of the work described in the application had nothing to do with the contemplation of a possible bankruptcy proceeding.”
In any event, Sidley has earned out over $3 million of the retainer. According to Conlan, only $1.4 million remains.
Sidley’s and the other BigLaw rates and the additional advisory expenses Tribune incurred after the jump.Sidley is charging $575 – $1,100 for partners, $400 – $875 for counsel and senior counsel, $240 – $650 for associates, and $95 – $385 for “paraprofessionals.”
They’re not the only big firm in on the action. McDermott Will & Emery has been retained ($500,000 up front) for general matters and sale of certain outside the bankruptcy (the Cubs and the Food Network – don’t you love conglomerates?). Paul Hastings is handling real estate (which, if you recall is where Zell made his money – he was sitting on a huge windfall from the sale of Equity Office Properties to Blackstone for $36 billion when he decided, for some unknown reason, to buy Tribune). Reed Smith is handling the insurance and Jenner & Block, which got a $150,000 retainer and has already been paid over $1 million this year, has the litigation.
In addition to all the legal support, Tribune has engaged boutique advisor Alvarez & Marsal for bankruptcy and restructuring ($1 million earned and counting), and Lazard Freres at $200,000 per month. Edelman is handling the PR.
Related posts:
