$47.9 Million Madoff Fee Request Is Eighth Filed In Largest Financial Fraud Ever

It’s not every day that a law firm asks a bankruptcy court to approve its request for $47.9 million in legal fees. But it is worth remembering that this particular request – by Madoff liquidation trustee Irving Picard and his law firm, Baker & Hostetler LLP – actually is the eighth fee request that has been filed by Picard (pictured) and the firm since the Madoff case began in December 2008 – more than three years ago. Let’s look at what the bankruptcy court has approved so far in this case. 

On August 6, 2009, the bankruptcy court approved the first fee application by Picard and Baker (for the period December 15, 2009 through April 30, 2009). The court awarded Picard $607,383.00 in fees and $45.00 for expenses, and approved an additional $151,845.75 in fees that was held back for later disbursement. The court awarded Baker $11,729,855.86 in fees and $274,203.03 for expenses, and approved an additional $2,932,463.97 in fees that was held back for later disbursement.
 
Then, on December 17, 2009, the bankruptcy court approved the second fee application (for May 1, 2009 through September 30, 2009). The court awarded Picard $668,484.00 in fees and $921.25 for expenses, and approved an additional $167,121.00 in fees that was held back for later disbursement. The court awarded Baker $17,023,281.48 in fees and $280,681.62 for expenses, and approved an additional $4,255,820.37 in fees that was held back for later disbursement.
 
The third fee application was approved on May 6, 2010, for October 1, 2008 through January 31, 2010. Here, the bankruptcy court awarded Picard $570,852.56 in fees and $77.66 for expenses, and approved an additional $100,739.69 in fees that was held back for later disbursement. The court awarded Baker $20,301,472.46 in fees and $390,204.89 for expenses, and approved an additional $3,582,612.79 in fees that was held back for later disbursement.
 
On September 14, 2010, the bankruptcy court approved the fourth fee application, for the period February 1, 2010 through May 31, 2010. The court awarded Picard $511,021.92 in fees and $39.63 for expenses, and approved an additional $90,180.33 in fees that was held back for later disbursement. The court awarded Baker $28,884,304.29 in fees and $731,371.19 for expenses, and approved an additional $5,097,230.16 in fees that was held back for later disbursement.
 
There was a fifth fee application, approved by the bankruptcy court on December 14, 2010, for June 1, 2010 through September 30, 2010. In this case, the bankruptcy court awarded Picard $581,960.34 in fees and $954.41 for expenses, and approved an additional $102,698.91 in fees that was held back for later disbursement. The court awarded Baker $38,522,476.35 in fees and $851,332.34 for expenses, and approved an additional $5,778,371.44 in fees that was held back for later disbursement.
 
The sixth fee application by Picard and Baker was approved by the bankruptcy court on June 1, 2011, covering the period from October 1, 2010 through January 31, 2011. The bankruptcy court awarded Picard $713,799.00 in fees and $31.50 for expenses, and approved an additional $107,069.87 in fees that was held back for later disbursement. The court awarded Baker $43,177,049.10 in fees and $1,103,196.25 for expenses, and approved an additional $6,476,557.36 in fees that was held back for later disbursement.
 
The bankruptcy court approved the seventh fee application on October 19, 2011, for the period from February 1, 2011 through May 31, 2011. In this case, the court awarded Picard $539,370.90 in fees and $479.80 for expenses, and approved an additional $59,930.10 in fees that was held back for later disbursement. The court awarded Baker $40,254,828.00 in fees and $4,472,758.65 for expenses, and approved an additional $1,270,956.31 in fees that was held back for later disbursement.
 
The bottom line? To date, the bankruptcy court has approved approximately $4.4 million in fees for Irving Picard and approximately $230 million for Baker, as indicated in the charts below. 
 
Picard
Application     Fees Approved                                    Expenses
 
No. 1               $607,383.00                                        $45.00
                       $151,845.75
 
No. 2               $668,484.00                                        $921.25
                       $167,121.00
 
No. 3               $570,852.56                                        $77.66
                       $100,739.69
 
No. 4               $511,021.92                                        $39.63
                         $90,180.33
 
No. 5               $581,960.34                                        $954.41
                       $102,698.91
 
No. 6               $713,799.00                                        $31.50
                       $107,069.87
 
No. 7               $539,370.90                                        $479.80
                         $59,930.10
 
Baker & Hostetler
Application     Fees Approved                                    Expenses
 
No. 1               $11,729,855.86                                   $274,203.03
                        $2,932,463.97
 
No. 2               $17,023,281.48                                   $280,681.62
                        $4,255,820.37
 
No. 3               $20,301,472.46                                   $390,204.89
                         $3,582,612.79
 
No. 4               $28,884,304.29                                   $731,371.19
                         $5,097,230.16
 
No. 5               $38,522,476.35                                   $851,332.34
                        $5,778,371.44
 
No. 6               $43,177,049.10                                   $1,103,196.25
                         $6,476,557.36
 
No. 7               $40,254,828.00                                   $4,472,758.65
                         $1,270,956.31
 
It’s worth noting that objections were filed to each of the first six fee applications; the objections were overruled and motions were filed for leave to appeal the bankruptcy court’s orders granting the first, second, third, fifth and sixth fee applications and overruling the related objections. The district court denied the motions for leave to appeal the first, third, and fifth orders; motions for leave to appeal the second and sixth orders remain pending before the district court. No objections were filed to the seventh fee application. The bankruptcy court will hold a hearing on the eighth fee application on March 15; objections, if any, must be filed by March 8.