Northwest Airlines Corp fka NWA

[stokednvegas]

I think they'll need a parachute.

I'ld buy in at 9.99 a share only, and sell at 12 if it could hold it during the " busy holiday season".

------->This just in:

MINNEAPOLIS (AP) - The lead lawyers in the Northwest Airlines bankruptcy case are asking for a $3.5 million bonus for shepherding the airline through Chapter 11.

The firm of Cadwalader, Wickersham & Taft LLP in New York called the bonus a "fee enhancement" in a court filing this week, saying it deserves the extra money because unsecured creditors will get back an average of 74 percent of their claims, more than in other recent airline bankruptcies.

The firm, "as the leader of the Northwest bankruptcy legal team, was a critical player in the achievement of these extraordinary results," it wrote in its filing.

The requested bonus works out to about 10 percent of the $35.4 million Cadwalader has billed for Northwest's Chapter 11 case.

Lead attorney Bruce Zirinsky alone charged from $800 to $850 per hour, for more than $3.3 million over almost 4,100 hours, according to the filing.

Northwest filed for bankruptcy protection on Sept. 14, 2005, and emerged on May 31. Some of the final attorney's bills have been filed in recent days.

One of them came from attorneys for the Air Line Pilots Association, which waged a monthslong fight with Northwest over the pay cuts and other concessions. It asked for $1.6 million in fees and expenses, including $859,822 for the union's lead attorneys, Cohen, Weiss and Simon LLP, with the rest going to consultants.

In a court filing, union attorney Richard M. Seltzer said the recent Delta Air Lines Inc. bankruptcy supports his request. In that case, Delta agreed to reimburse the union with cash and credit for pay losses up to $8 million, in addition to paying the union's financial advisers, according to the filing.

It also pointed out that an Ad Hoc Committee of Equity Holders was awarded almost $4 million for professional fees after it fought with Northwest in the courtroom over whether shareholders should receive anything in the reorganization.

Ultimately, any money paid to attorneys reduces what's left for creditors.

Lynn LoPucki, a law professor at UCLA and an expert on bankruptcy fees, said judges generally approve 99 percent of requested payments for attorneys and experts hired by bankrupt publicly traded companies. He said that's because attorneys steer their companies toward filing bankruptcy cases in jurisdictions where judges have a reputation for not raising too many questions about fees.

"Within the range of reason, the courts are under tremendous pressure to say 'Yes,"' he said. "If they don't, they and their colleagues don't get any more big cases." And that would mean a loss of prestige for the courts and less bankruptcy business for local attorneys, he said.

"The court can't afford to have a reputation for not being a good place to go for these lawyers," he said.

However, he said requests for legal fees by third parties, such as the pilot's union, are paid only about half of the time because those attorneys don't control where the case is filed.

Douglas Baird, bankruptcy expert at University of Chicago law school, said extra payments for attorneys aren't so bad if they're disclosed at the start of the process.

"On the other hand, it shouldn't be a tip," he said. "It's other people's money."

In the Enron bankruptcy, turnaround expert Stephen Cooper was awarded a $12.5 million "success fee" for leading the remnants of the company after it imploded. Cooper originally asked for $25 million but reduced the request after some parties objected.


Copyright 2007 The Associated Press