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Intelsat’s advisors have bills trimmed

January 27, 2022

Intelsat’s Chapter 11 bankruptcy reconstruction has seen the court-appointed Fee Examiner look at every invoice submitted during the three-month period of June 1st-August 31st 2021 by Intelsat’s various professional advisers and advisors to Intelsat’s shareholders and other key parties. The Examiner has trimmed just about every monthly/quarterly billing summary.

The Examiner’s work is routine although such a major bankruptcy generates commensurately high professional fees and reflect the intensity of the work involved. The Fee Examiner is tasked with looking at – and potentially challenging – fees and expenses of the reconstruction process. The Examiner praised the professionals for their “prompt, thorough and detailed responses” to the queries raised.

In fact, many of the professionals when challenged over a particular invoice, voluntarily reduced or cancelled the invoice. These “voluntary” reductions saved $549,704 of fees and a further $1275 in expenses.

However, the Fee Examiner had more than a few grumbles against almost all of the professionals and cited: “Lumping/repetitive and/or Vague time entries, Excessive time spent, Inter-office conferences, non-work travel, unsupported expenses,” and various other negative observations in the Examiner’s reviews.

There are some 29 professional advisors and lawyers involved and for most of them the adjustments are extremely modest.

For example, Alvarez & Marsal North America LLC, which asked for $6.7 million for its work during the period. The Examiner trimmed this by $32,519.

Deloitte Financial Advisory Services LLP voluntarily trimmed its fees by $6,412 because of “non-working travel” but the Examiner further cut Deloitte’s overall fees by $16,899 and left the claimed $1.899 million intact. But a Deloitte sister company (Deloitte Tax LLP) submitted fees totalling $6.830 million. The Examiner cut $113,656 from this total.

Kirkland & Ellis LLP and Kirkland & Ellis Int’l LLP are legal counsel to Intelsat and billed $12.898 million in fees and $639,958 in expenses during the period. The Examiner trimmed these sums by $59,733 for fees and just $2,093 for expenses.

The totals, however, are considerable and show the costs of Intelsat’s bankruptcy for the quarter-year. The Examiner’s overall total for the interim period total $39.001 million and a further $760,809 in assorted expenses.

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