HOUSTON (June 15, 2015) – Today, the Supreme Court of the United States decided in favor of Bracewell & Giuliani LLP’s client, ASARCO LLC, in Baker Botts LLP, et al. v. ASARCO LLC, No. 14-103. In a 6-3 ruling, the Supreme Court held that Section 330(a) of the U.S. Bankruptcy Code does not authorize bankruptcy professionals to recover fees they incur in litigating over their underlying fee requests. The decision denies the attempt to obtain more than $7 million in such fees.
“We are delighted with the Supreme Court’s decision,” said Bracewell Partner Jeffrey L. Oldham, who presented oral argument in February on behalf of ASARCO. “ASARCO has argued from the beginning that the Bankruptcy Code’s plain text does not authorize Baker Botts’ attempt to get paid from estate funds for its purely self-interested work litigating over its underlying fee requests. ASARCO is gratified that the Fifth Circuit and now the Supreme Court have agreed with its position.”
The case stems from ASARCO’s filing for Chapter 11 bankruptcy in 2005. Baker Botts represented ASARCO during the bankruptcy and, after ASARCO emerged from bankruptcy in 2009, Baker Botts and its co-counsel requested more than $144 million in fees for their bankruptcy work. Bracewell represented ASARCO in objecting to Baker Botts’ fee requests, and after six months of litigation between ASARCO and Baker Botts over the propriety of the requests, Baker Botts asked for millions more in attorneys’ fees for the fee litigation. The bankruptcy court and district court ultimately awarded approximately $124 million in bankruptcy fees and $5 million for fees spent litigating over the fee requests. The Fifth Circuit reversed the $5 million award of such fees, agreeing with ASARCO and holding that the Bankruptcy Code does not authorize the award of such fees from estate funds. The case was then brought to the Supreme Court, which today affirmed the Fifth Circuit’s decision.
“This is a tremendous win for our appellate and litigation teams, and we are proud of everyone who worked on this case. This shows the strength of our litigators at their best,” said Bracewell Managing Partner Mark C. Evans.
ASARCO’s Executive Vice-President Legal, Jorge Lazalde, stated: “Our lawyers did an outstanding job, and we are very pleased that the Supreme Court agreed with the Fifth Circuit that these attorneys’ fees are not recoverable.”
Bracewell attorneys working on the case include:
Partners: Jeffrey L. Oldham, Ralph “Skip” D. McBride, Bryan S. Dumesnil, Bradley J. Benoit, Heath A. Novosad and Sam M. Stricklin
Associates: Jonathon K. Hance, Lindsay E. Hagans, Austin J.F. Muck and Mark R. Wulfe