On March 26, The Honorable Andrew S. Hanen, United States District Judge for the Southern District of Texas, affirmed a Bankruptcy Court’s $5 million fee award to Baker Botts for successfully defending its fee application in the ASARCO LLC bankruptcy case.
Last year in August, Judge Hanen affirmed the Bankruptcy’s Court’s legal conclusion that fees for successfully defending a fee application in a bankruptcy case are compensable. However, Judge Hanen remanded to the Bankruptcy Court to clarify whether the entire $5 million fee award was attributable to the Baker Botts’ successful defense against Reorganized ASARCO’s unfounded request that the firm return over $25 million of the $113 million in core fees previously paid to it. The Bankruptcy Court entered supplemental findings clarifying that the $5 million award was indeed entirely attributable to the successful defense. Judge Hanen’s ruling this week affirmed the Bankruptcy Court’s decision on remand.
In his August 2012 opinion, Judge Hanen had also awarded a $4.1 million fee enhancement to the firm for obtaining a $6 billion fraudulent transfer judgment on behalf of ASARCO LLC against the parent company that is now in control of Reorganized ASARCO. The fraudulent transfer judgment—the largest such judgment in United States history—precipitated a full payment chapter 11 plan to creditors.
In Judge Hanen’s ruling earlier this week, he made reference to the $4.1 million enhancement, saying it was awarded for “extraordinary” work to produce what he called the most successful bankruptcy in history. “If ever there were a case which called for an enhancement, surely this was it,” the Court said.
Reorganized ASARCO’s appeal of Judge Hanen’s August 2012 opinion is presently before the Fifth Circuit.