This article originally appeared in the TMA Midwest Blog
June 23, 2011
Fees can pile up in a bankruptcy, and even bankruptcy professionals will sometimes lose patience with that facet of our industry. Judge Martin Glenn, referring to a $1 million fee paid to Borders Group’s lenders, seems to have momentarily lost his temper when we exclaimed that the company was being “raped” by its lenders.
While such an outburst may seem beyond the pale, it is worthwhile to note that the expense of bankruptcy has led many turnaround and restructuring professionals to avoid it wherever possible. Sadly, the ability to reject leases (and the continuing open question of whether or not there is a core business to salvage) made a chapter 11 filing for Borders Group necessary. And so the fees pile on, in no individual case unjustified, but cumulatively trying the patience even of a bankruptcy court judge.