Judge rejects request to reimburse expenses



Lawyers have been enjoying the 'high end of expense-account living.'
DOW JONES NEWSWIRES
NEW YORK -- A judge rejected a request for expenses racked up by the army of lawyers and consultants working on the bankruptcy reorganization of Toledo-based Dana Corp., citing such extravagances as 300 taxi rides and 9,000 airfares.
Judge Burton Lifland of the U.S. Bankruptcy Court in Manhattan approved lawyers' and consultants' requests for about 22 million in fees, subject to a 20 percent holdback. But, in an unusual move, he declined to approve their expenses -- which total nearly 1 million, according to court documents.
"I have a distinct impression there is a sense of exuberance here," Lifland said at a court hearing Tuesday. He said, " 9,000 airfares for single flights are something I don't find tolerable" and noted that Dana's restructuring professionals took at least three such flights, and 25 flights that cost more than 1,300.
"Most of these are just between New York and Detroit," Lifland said. He said he's made comparable flights in business class for a third of the prices Dana's professionals have claimed in their expense reports.
Taxi fares
Lifland also said there were charges for 5,000 in taxi fares attributable to one lawyer, "who stays late and then apparently goes home for 200 and 300 cab rides."
"I don't know where he goes but I don't find this appropriate," Lifland said. He did not identify that lawyer. The expense requests he rejected came from 17 professional firms -- including Jones Day, Dana's main bankruptcy law firm, and Miller Buckfire & amp; Co., the company's financial adviser.
"I'm not telling you to over-economize, but this is the high end of expense-account living," Lifland said. He said more than 88,000 in lodging expenses had been requested, including some for 500-a-night hotel rooms in Detroit. Two meals for 700 that were only for four people were also expenses Lifland called unreasonable.
"I find it bizarre that the court even has to go into these things," Lifland said, adding that it should be up to the fee applicants to exercise self-control in their spending habits.
Also objected
Diana G. Adams, the acting U.S. Trustee in New York, had also objected to the same applications for fees and expenses. In court papers, Adams said Dana's professionals have racked up 41.7 million in fees and expenses since the company tumbled into bankruptcy proceedings in March. She asked Lifland to temporarily hold back 20 percent of the requested fees.
Dana, an auto-parts company, has said it intends to close up to 16 factories, cut its workers' wages and benefits, and end health benefits for retired workers in a bid to boost its pretax profit by 540 million a year. The company recently won court approval to pay its chief executive, Michael Burns, up to 6.5 million in bonuses if Dana meets its financial goals.

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