US city hit with €156 million legal bill two months after emerging from bankruptcy
Just two months after Detroit emerged from the largest municipal bankruptcy in American history, the city has been hit with a massive legal bill by its own lawyers.
On Thursday, a US Federal said that the €156 million charged to Detroit by its own law firms and consultants was a “reasonable” amount.
Detroit exited bankruptcy on 10 December with a court-approved plan that would allow the city to cut €6.1 billion off its €15.8 billion of debt and obligations.
“The city is now on a path to success precisely because of the expertise, skill, commitment, endurance, personal sacrifice, civility and proficiency of all of the professionals in the case, including most certainly those whose fees are subject to review in this opinion”, the judge said.
Read More: Detroit files for massive bankruptcy after years of struggle
The original legal bill was more than €160 million but the state of Michigan paid some €4 million to cut the tab to €156 million.
The city’s top counsel, Jones Day, claims to be owed €51 million alone.
Several firms, including Jones Day, say they lowered their standard charges to the city to make the bill more palatable for Detroit.
Despite reductions in the bill, the €156 million owed by Detroit is still nearly 20pc of the city’s overall budget for 2015.
Local media are reporting that there is currently no plan in place to pay off the legal bill, which was not expected to come so soon.
Independent News Service