If lawyers in Detroit's bankruptcy case want to get paid, they need the blessing of Chicago attorney Robert Fishman.
An army of lawyers, auditors and consultants has swarmed Detroit for 16 months, generating paperwork and arguments and billing more than $140 million in negotiating the largest municipal bankruptcy in U.S. history.
Now they want to get paid. The man playing a key role in determining just how much many of them will receive is Robert Fishman, partner at Shaw Fishman Glantz & Towbin in River North.
Fishman is the case's fee examiner, assigned to pore over those professionals' invoices and weigh the reasonableness of the charges. Though U.S. Bankruptcy Judge Steven Rhodes ultimately will decide whether the fees are appropriate, the fee examiner's opinion carries considerable weight. It is possibly the first time the role, a function generally found in Chapter 11 bankruptcies, has been used in a municipal case.
Detroit filed for bankruptcy in July 2013, the culmination of decades of depopulation, financial mismanagement and plummeting tax revenue that left it owing $18.5 billion to creditors. More than 50 professional services firms are involved in some aspect of the city's restructuring. Most of them have their bills examined by the city or the emergency manager's office. Fishman reviews the fees of the 17 firms directly involved in the court case.
The fees are a contentious subject, as evidenced by the angry emails Fishman has received from Detroit citizens. On Nov. 7, Rhodes approved a plan for the city to exit bankruptcy, but a city attorney has requested extra time to review the fees of outside counsel, prompting Rhodes to set a two-day mediation session in December.
“It's the only thing left in the whole bankruptcy,” Fishman says. “Now everybody wants to fight about the fees.”
Fishman, 60, says he didn't seek the high-profile assignment. He had been following the Detroit bankruptcy out of intellectual interest, when one day he picked up the phone and it was Rhodes, offering him the job. He was appointed last summer to review lawyers' and consultants' invoices, question their fees when necessary and then file quarterly reports with the court disclosing those fees.
He examines what services a firm provides, how long it takes to complete them and the rates being billed. For example, in August he questioned one firm's $67,000 bill for monitoring and responding to news coverage.
Fishman says he fell into bankruptcy practice “by accident” after a stint at the Illinois attorney general's office. The mix of dealmaking, litigation and client variety proved a good match for his temperament. After 13 years in private practice, he left 155-lawyer Ross & Hardies, which later merged with McGuireWoods. He joined a small real estate firm and established a bankruptcy practice there. He wanted more control over his work, he says. That independent streak is apparent in his full beard, a rarity among clean-shaven lawyers.
Fishman has built a national profile based on his work with the Alexandria, Va.-based American Bankruptcy Institute, where he was president from 1997 to 1998, and his involvement in theUnited Airlines, Kmart and Peregrine Financial Group bankruptcies.
A native of Danville, Fishman has lived in Deerfield since 1982 and has no ties to Detroit. That likely helped him get the job, says J. Ford Elsaesser, a past president of the bankruptcy institute and managing partner at a firm in Sandpoint, Idaho.
“There would be more independence because he's not wedded to a law firm or group of lawyers in Detroit, so he can probably speak more freely,” Elsaesser says. “And if he was in a big firm people might be of the view, 'All these big firms stick together, they're never going to criticize each other's fees.' “
The job is a delicate one since it basically involves conducting a forensic audit to determine exactly what the client is paying for, says Bruce Meckler, a legal fee expert and partner at Meckler Bulger Tilson Marick & Pearson in Chicago. “You're doing something that is not necessarily going to be popular,” he says.
Yet Fishman has the credibility needed to call a partner and say, “I have a problem with your bill,” says Deborah Williamson, also a former president of the bankruptcy institute and managing director of a firm in San Antonio. Few of his objections became part of the public record because he seeks to address issues before it's necessary to file his report, she says.
Outside of work, Fishman likes skiing, golf, football and basketball. Richard Mason, a partner at McGuireWoods, says they used to play pickup basketball games in the mid-1980s against off—season Bears players. Fishman also has a collection of roughly 20,000 stamps, a hobby fueled by a love of history and geography.
He has been married for 35 years and has two living sons in their 20s. His oldest son died in 2006 from epilepsy complications.
The fee examiner role is the most prominent he has held in a big case, Fishman says, “the kind of opportunity I just felt I couldn't say no to,” although not because of the money. He earns $618 per hour, a discount off his usual rate of $695. He says he's not sure how much more work the case will generate for the firm, but as of July, Shaw Fishman had billed more than $490,000.
Rather, Fishman sees the assignment as an important credential for business development. He speculates that more municipalities may file for bankruptcy. If that happens, he says, “I'll be in a very good position to be considered for that.”
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