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Detroit Bankruptcy's Tab at $13 Million and Growing

Lawyers, accountants and other professionals racked up about $13.3 million in fees and an additional $348,000 in expenses from July to September in the early stages of the battle to restructure the bankrupt city of Detroit.

Lawyers, accountants and other professionals racked up about $13.3 million in fees and an additional $348,000 in expenses from July to September in the early stages of the battle to restructure the bankrupt city of Detroit.

And that was before the legal ranks were called out in full force for fall hearings into whether the city was in fact eligible to file for Chapter 9. Considering that, there likely will be even larger fees when the next quarterly report comes due covering October through the end of the year.

The city has approved $62 million in contracts with lawyers and consultants as it grapples with about $18 billion in debt and projected long-term liabilities. And the city has budgeted $93 million to cover restructuring costs, Bill Nowling, spokesman for emergency manager Kevyn Orr, said Tuesday.

Detroit filed for bankruptcy on July 18. To try to contain professional costs, the court appointed Chicago attorney Robert Fishman as a fee examiner. He takes all invoices and pores over them to ensure they meet strict guidelines and then provides a redacted version of the authorized costs to the city to pay.

Caroline Cournoyer is GOVERNING's senior web editor.
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