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Tallying Costs of the Great Lehman Unwind


Why did bankruptcy expenses soar in August?

Editor's note: This article was written by Michelle Leder, who combs through SEC filings for nuggets of interesting details for her blog,

You may have already had your fill of Lehman one-year anniversary stories -- even Nouriel Roubini weighed in this week on Tuesday's anniversary. But one day later, we caught the monthly schedule that Lehman is required to file with the bankruptcy court on its expenses.

In August, the bill came to $58.8 million -- a 30% increase over the $44.4 million for July. The schedule also gave a year-to-date figure for expenses since Lehman filed for bankruptcy on October 3 (we can look for more anniversary coverage then) and so far, that bill has come to $366.9 million. Alvarez & Marsal, the company hired to reorganize Lehman, has reaped the most -- just over $150 million -- through the end of August. Lead bankruptcy lawyers Weil Gotshal are a distant second at $88.4 million year-to-date.

The filing doesn't explain why August was so expensive -- especially since most of New York tends to take a chunk of the month off for vacation -- but it's hard to ignore the fact that there was a 30% increase in spending between July and August. Indeed, at $58 million, August was roughly four times as expensive as January, when fees were just over $14 million. Compare that figure to the $19.2 million that just Alvarez & Marsal billed in August.

So the anniversary may have come and gone, but the hefty clean-up bills continue.
No positions in stocks mentioned.
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