Calpine bankruptcy trustee balks at costs

The U.S. trustee in Calpine Corp.’s bankruptcy case objected to requests for about $51 million in legal fees and expenses, citing losses and a lack of progress on the San Jose-based power company’s reorganization plan.

U.S. Trustee Diana Adams objected to the interim request for $48.7 million in fees and $2.3 million in expenses in a court filing Wednesday in New York.

About $200 million has been paid to lawyers and other professionals since Calpine filed for bankruptcy protection in December 2005.

Fees based on progress in Calpine’s case would be premature before a confirmation hearing to approve the company’s reorganization plan is held Dec. 18, Adams said.

“Based upon the debtors’ reported losses of over $2.5 billion, confirmation is not guaranteed,” she said.

Calpine filed the largest bankruptcy of 2005 and is seeking approval of a plan that values its reorganized business at about $20.3 billion.

The U.S. Trustee is a branch of the Justice Department that monitors the conduct of bankruptcy parties and private estate trustees and acts to ensure compliance with the law.