First Brands bankruptcy fees outpace asset sales

In the Chapter 11 case of First Brands, professional fees have eclipsed the value of assets sold. Over six months, advisers and lawyers billed $247 million, while the identified asset sales – including Walbro, Horizon North America, Toledo Molding & Die, Jasper Rubber and brands sold to PGI Northstar – total about $227 million.

Weil Gotshal & Manges logged 30,325 billable hours, and Alvarez & Marsal received $67.8 million for dismantling the company it was hired to rescue. Creditors’ committee lawyers, bankers and investigators added $38.6 million in fees. Horizon North America alone fetched $64 million, yet the combined professional fees exceed that amount, leaving creditors waiting for payment.

The analysis suggests the bankruptcy structure primarily benefits the firms handling it, with creditors receiving payment only after the professionals have been compensated.