Lansing— The state of Michigan’s legal bills in Detroit’s bankruptcy continue to mount as a team of private attorneys has already exceeded its initial contract budget.
Attorneys at the law firm Dickinson Wright representing the state as special assistant attorneys general in the bankruptcy case billed the state Treasury Department $375,773 through end of October, records show.
The state paid the private attorneys $105,939.56 in August; $137,761.42 in September; and $132,072.94 in October, according to the Attorney General’s Office.
Dickinson Wright had an initial contract “budget ceiling” of $225,000, though the contract allows for increases.
But the state’s costs for providing additional attorneys to represent Gov. Rick Snyder and members of his administration still pale in comparison to the city’s rising legal tab.
Detroit had paid its lead bankruptcy law firm, Jones Day, $10.9 million through Oct. 1, according to the most recent figures available.
An analysis of the city’s legal bills from July through September by a court-appointed fee examiner is due to be filed with U.S. Bankruptcy Court on Feb. 4.
Fee examiner Robert Fishman’s first quarterly report was originally due Wednesday, but he asked U.S. Bankruptcy Judge Steven Rhodes for an extension last week, citing administrative hurdles and “the holiday season.”
Fishman, who is charging Detroit $600 an hour for his services, said in a court filing Jan. 6 that he is reviewing the fees and expenses of 16 attorneys working for Detroit and a committee representing retirees in the case, “and the number of professionals is expected to increase.”
Rhodes granted Fishman a three-week extension on Jan. 8.
The state’s legal costs are not subject to the fee examiner’s review, but are expected to increase when the Attorney General’s Office receives bills for November and December, when the state’s attorneys were routinely in court during the bankruptcy eligibility trial and follow-up hearings.
The state’s attorneys also have been summoned for court-ordered mediation sessions throughout the 6-month-old case.
Dickinson Wright has not yet billed the state for work over the last two months, said Joy Yearout, spokeswoman for Attorney General Bill Schuette.
Steven G. Howell, a bankruptcy attorney in Dickinson Wright’s Detroit office, has regularly represented the state in bankruptcy court alongside Matthew Schneider, Schuette’s chief legal counsel.
Peter Ellsworth, an attorney in Dickinson Wright’s Lansing office, also has appeared in court and represented state officials at sworn depositions. Howell, Ellsworth and two other associates are charging the state $400 an hour for their services.
The Treasury Department has a $3 million budget for legal services.