In June of 2013, the city of Detroit, MI filed for Chapter 9 bankruptcy. This was the largest bankruptcy claim by a city in the history of the U.S., with a debt between $18 and $20 billion. The case has raged in the courts for over a year and has captured media attention again and again. Most recently, the story turning heads is that of several law firms hired by the city that have billed exorbitant amounts of money to do odd tasks like “review press” and “read news reports.” Some of these billings were for as much as $400-$700 per hour. One law firm, Denton, has billed a total of $228,000 for reading and issuing press releases.
The bankruptcy fee examiner, a Chicago attorney named Robert Fishman, has gone on record as saying these fees were for tasks he considered “non-compensable.” Other seemingly absurd charges have also been found by 7 Action News, the organization covering the story most closely. One attorney appears to have billed $450 to walk a block to the courthouse, while others billed several hundred dollars for chauffeured rides into the city from various suburbs.
Both the Mayor and the Governor have commented on the situation, now being termed the Detroit Bankruptcy Bonanza. The Mayor concedes that 7 Action News has found what appears to be “the tip of the iceberg.” While bankruptcy cases often draw attention, one of this magnitude has many spectators, and with every new revelation comes more press for Detroit. Unfortunately, it may not be press that the city wants.