Lawyers Denied Premium

A judge declined Wednesday to award a $3-million premium to the law firm that represented unsecured creditors in the MCI Inc. bankruptcy case.

Akin Gump Strauss Hauer & Feld, which represented MCI’s unsecured creditors’ committee, asked for the premium in addition to $16 million in fees and expenses already awarded by a Bankruptcy Court judge in New York in recognition of its efforts to help rehabilitate the company.

“There is no reason to believe that the rates charged by Akin Gump throughout this case do not reflect the market value of their expertise,” Judge Arthur Gonzalez said in his published ruling. “Akin Gump’s request for a fee enhancement is denied.”

Professionals who worked on the MCI bankruptcy case are seeking to be paid $657 million, the second-most ever in a bankruptcy case. MCI filed the largest bankruptcy in U.S. history in July 2002, when it was still called WorldCom Inc. The Ashburn, Va.-based company exited bankruptcy protection in April with a plan to pay creditors about 36 cents on the dollar.

“We strongly believe that if there ever were a case in which counsel for a committee was entitled to a premium, this was it,” said Daniel Golden, a partner with the firm and one of the lead lawyers on the case. “We are disappointed in Judge Gonzalez’s ruling but understand how difficult it is to get a premium under existing case law.”

More than 130 lawyers and clerks for the Washington-based law firm worked on the MCI case. Golden billed the most -- almost $1.2 million -- for his work on the case, court papers show.

“Against the backdrop of the largest fraud in history, Akin Gump worked tirelessly for unsecured creditors, and its work produced a viable enterprise and successful recoveries for unsecured creditors,” the firm said in court papers. “Akin Gump’s efforts went beyond that of typical counsel to an official committee and were central to paving the way for the debtor’s successful rebirth as MCI.”