High court rules against law firm in bankruptcy fee fight

AP News
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Posted: Jun 15, 2015 11:15 AM

WASHINGTON (AP) — The Supreme Court ruled Monday that one of the nation's biggest law firms is not entitled to recover $5.2 million in legal fees it incurred in the course of a bankruptcy proceeding.

The 6-3 ruling said the firm Baker Botts could not collect additional fees it billed during a side dispute over whether the firm should be paid $117 million in fees earned representing Tucson-based copper-mining giant Asarco in the underlying bankruptcy.

A U.S. bankruptcy court in Texas initially awarded the firm $117 million in 2011 for its work in Asarco's Chapter 11 bankruptcy proceeding. But Asarco objected and the firm spent another $5.2 million in separate litigation defending its fees. A federal appeals court ruled that "fees for defense of fees" could not be paid.

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The Supreme Court affirmed the lower court, finding that federal law does not allow a bankruptcy court to award attorney fees solely for the extra work performed to justify fees in the underlying case.