Las Vegas Sun

February 25, 2024

Judge warns against overbilling in Station Casinos bankruptcy case

RENO -- Lawyers and accountants are pulling in the big bucks in the Station Casinos bankruptcy case.

Some lawyers are charging close to $1,000 an hour, plus there are expenses billed for non-working travel time.

U.S. Bankruptcy Judge Greg Zive told lawyers Tuesday he would look for overbilling and questioned expense accounts. He approved $12 million in interim fees and expenses for law and accounting firms.

The judge noted that progress has been made in an agreement with key lenders and the company in clearing the way for Station to emerge from bankruptcy. Attorney Paul Aronzon told the judge there has been "good progress" and a creditors meeting is set for March 5.

The majority of the secured lenders, such as Deutsche Bank and J.P. Morgan, have holdings of Red Rock, Palace Station, Boulder Station and Sunset Station. They have secured debt of $2.4 billion. Other major lenders also have security in other casinos.

Most of the hearing was taken up with the judge approving the request for interim payment of fees and expenses, but Zive had several questions.

For example, one accounting firm charged $19,500 in hotel bills. Zive pointed out that Station Casinos has hotels where the representatives of FTI Consulting Inc. can stay.

"I don't know if the hotels still comp, but we need to be careful," Zive said. "This is not a large amount of money but it doesn't have to be."

The judge approved $3.9 million in fees and expenses for one law firm where some 50 attorneys and legal assistants are working on the case representing Station.

The judge noted two lawyers in the firm of Milbank, Tweed, Hadley & McCloy are charging $995 an hour and a small group of others are billing at $900 to $950 an hour.

"When you bill at that rate, I expect a great deal of efficiency," he said.

The money to pay these fees comes from Station Casinos.

These are the first interim payments and the judge will approve the final bills when the bankruptcy case is completed.

"I don't want to go to the expense of hiring a fee examiner but if I become uncomfortable, I will do that," Zive told the lawyers in the courtroom and on the telephone.

Station filed for bankruptcy at the end of July and must produce a reorganization plan by March 27.

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