HOUSTON-#2385290-v2-First Amended Objection to Baker …allowable. For the reasons set forth herein,...

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS CORPUS CHRISTI DIVISION In re: § Case No. 05-21207 § ASARCO LLC, et al., § Chapter 11 § Debtors. § Jointly Administered § REORGANIZED ASARCO LLC'S FIRST AMENDED RESPONSE AND OBJECTION TO BAKER BOTTS L.L.P.'S FINAL FEE APPLICATION [Related to Docket Nos. 955, 2747, 1998, 3386, 4450, 5541, 6334, 7420, 8792, 10037, 10830, 12720, 13208 and 13915] TO THE HONORABLE RICHARD S. SCHMIDT, UNITED STATES BANKRUPTCY JUDGE: Reorganized ASARCO LLC ("ASARCO ") respectfully files its First Amended Response and Objection to the Final Fee Application And Request For Fee Enhancement of Baker Botts L.L.P. and, in support thereof, states as follows. I. PRELIMINARY STATEMENT 1. Baker Botts L.L.P. ("Baker Botts "), as former Debtors' counsel, seeks through its Final Fee Application and Request for Fee Enhancement ("Fee Application ") 1 an award of $136,006,226.98 in fees and $6,065,598.58 in expenses. Included within the total fees sought by Baker Botts is a "fee enhancement" request of $22,667,704.50. Baker Botts claims it is entitled to such an award because "the results obtained in these cases were so unexpected and extraordinary" that a total fee of $113,338,522.48 would not "properly compensate" Baker Botts for its legal services. 2 Although ASARCO acknowledges that Baker Botts provided some 1 Bk. Docket No. 13915. 2 Id. at p. 2. Case 05-21207 Document 14713 Filed in TXSB on 05/19/10 Page 1 of 27

Transcript of HOUSTON-#2385290-v2-First Amended Objection to Baker …allowable. For the reasons set forth herein,...

Page 1: HOUSTON-#2385290-v2-First Amended Objection to Baker …allowable. For the reasons set forth herein, ASARCO objects to the Fee Application and requests that the Court reduce the amount

IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS

CORPUS CHRISTI DIVISION In re: § Case No. 05-21207 § ASARCO LLC, et al., § Chapter 11 §

Debtors. § Jointly Administered §

REORGANIZED ASARCO LLC'S FIRST AMENDED RESPONSE AND OBJECTION TO BAKER BOTTS L.L.P.'S FINAL FEE APPLICATION

[Related to Docket Nos. 955, 2747, 1998, 3386, 4450, 5541, 6334, 7420, 8792, 10037, 10830, 12720, 13208 and 13915]

TO THE HONORABLE RICHARD S. SCHMIDT, UNITED STATES BANKRUPTCY JUDGE: Reorganized ASARCO LLC ("ASARCO") respectfully files its First Amended Response

and Objection to the Final Fee Application And Request For Fee Enhancement of Baker Botts

L.L.P. and, in support thereof, states as follows.

I. PRELIMINARY STATEMENT

1. Baker Botts L.L.P. ("Baker Botts"), as former Debtors' counsel, seeks through its

Final Fee Application and Request for Fee Enhancement ("Fee Application")1 an award of

$136,006,226.98 in fees and $6,065,598.58 in expenses. Included within the total fees sought by

Baker Botts is a "fee enhancement" request of $22,667,704.50. Baker Botts claims it is entitled

to such an award because "the results obtained in these cases were so unexpected and

extraordinary" that a total fee of $113,338,522.48 would not "properly compensate" Baker Botts

for its legal services.2 Although ASARCO acknowledges that Baker Botts provided some

1 Bk. Docket No. 13915. 2 Id. at p. 2.

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valuable services to the estate, the fact remains that Baker Botts has already been paid

handsomely for these services.

2. In this submission, ASARCO responds to that portion of the Fee Application

dealing with Baker Botts' request for final approval of the fees and expenses incurred as former

Debtors' counsel.3 As such, the primary issue before the Court is whether the amount sought by

Baker Botts in its Fee Application is reasonable and necessary in accordance with 11 U.S.C. §

330, Fifth Circuit case law, and the guidelines of this district pertaining to the compensation of

professionals in bankruptcy proceedings. The legislative history of § 330 includes a reminder

that should be reflected upon at the outset of the Court's consideration of the Fee Application:

"Attorneys' fees in bankruptcy cases can be quite large and should be closely examined by the

court." H.R. Rep. No. 595, 95th Cong., 2d Sess., 329-30, reprinted in 1978 U.S.S.C.A.N. 5963,

6442. As Baker Botts seeks in excess of $142,000,000 in fees and expenses, close examination

and careful consideration of the Fee Application is indeed warranted. It is against this backdrop

that the Court is asked to review the Fee Application.

3. Certain components of the Fee Application deserve particularly close scrutiny.

More specifically, certain requests in the Fee Application seek: (1) compensation for

unnecessary services; (2) compensation for services that did not provide a material benefit to the

estate; and (3) reimbursement of expenses without demonstrating that such expenses were

allowable. For the reasons set forth herein, ASARCO objects to the Fee Application and

requests that the Court reduce the amount of final fees and expenses awarded to Baker Botts

accordingly.

3 ASARCO previously submitted for the Court's consideration ASARCO's Response and Objection to Baker

Botts' Request for Fee Enhancement.

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4. ASARCO requests that the Court in its discretion disallow $15,034,619 in fees

requested in the Fee Application as follows:

a. Inadequate Descriptions: $9,373,251

b. Clerical/Administrative Efforts of Paralegals: $3,469,155

c. Summer Associate Fees: $502,915

d. Inefficient Document Review Efforts: $1,689,298

5. ASARCO further requests that the Court in its discretion disallow $9,022,885 in

fees requested in the Fee Application for the following tasks that failed to provide a material

benefit to the estate:

a. Seeking Cash Bond for AMC Judgment: $186,9354

b. Researching and Drafting D&O Bonus Motion: $10,207

c. Researching and Drafting Contingency Fee Memo: $5,780

d. Researching and Drafting Conflict of Interest Memo: $79,9635

e. Supporting a Revised Sterlite-Backed Plan after Confirmation Ruling: $340,000

f. Plan Confirmation Efforts from May 2008 Agreement with Sterlite until 9019 Hearing for New Sterlite Agreement: $8,400,000

There are other issues raised in expert reports, discovery, this response and objection, and the

response and objection to the fee enhancement that challenge the reasonableness, necessity,

and/or material benefit to the estate of certain aspects of Baker Botts' work. ASARCO maintains

4 Of this amount, $10,620 is also included in the $9,373,251 of inadequately-described time. Should the

Court reduce Baker Botts' fees for both inadequately-described time and for seeking a cash bond for the AMC judgment, this amount should only be deducted once.

5 Of this amount, $8,300 is also included in the $9,373,251 of inadequately-described time. Should the Court reduce Baker Botts' fees for both inadequately-described time and for researching and drafting a conflict of interest memorandum, this amount should only be deducted once.

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that the Court can and should exercise its discretion to reduce the fees awarded to Baker Botts as

to this other work as deemed appropriate.

6. ASARCO further requests that the Court in its discretion disallow $1,024,724.65

in expenses requested in the Fee Application as follows:

a. Socials/Overhead: $63,650.96

b. Insufficient Travel Detail: $810,192.67

c. Non-Compliant Federal Express: $114,997.85

d. Non-Compliant Faxes: $25,618.20

e. Redacted Expenses: $10,265.00

7. In addition to these specific downward adjustments to Baker Botts' fees and

expenses, ASARCO requests that the Court, in its discretion, apply a general percentage

reduction to Baker Botts' remaining fees. Such percentage reductions are appropriate where an

applicant's time records are impermissibly vague so as to hinder meaningful judicial review

and/or when there appears to be excessive hours billed to the file. See, e.g., Perdue v. Kenny A.,

559 U.S. ___, 3-4 (2010) (slip op.) (noting without negative comment that (1) the district court

applied a 15% discount to the applicant's fees because the time entries were too vague and

appeared to contain excessive hours and (2) that the 11th Circuit stated that it "'would have cut

the billable hours more if [it] was deciding the matter in the first instance'"); In re Adventist

Living Centers, Inc., 137 B.R. 692 (N.D. Ill 1991) (fees reduced by 50% due to lumping of

services in fee application); In re Leonard Jed Co., 103 B.R. 706 (Bankr. D. Md. 1989) (denying

compensation for nearly all clumped-billed billing entries); In re Seneca Oil Co., 65 B.R. 902,

909 (Bankr. W.D. Okla. 1986) (denying compensation for all clumped-billing time entries that

contain both compensable and non-compensable activities); In re Chicago Lutheran Hospital

Ass'n, 89 B.R. 719, 735 (Bankr. N.D. Ill. 1988) (denying compensation for all clump-billed

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entries). Three primary reasons that a percentage cut of the remainder of Baker Botts' fees are

appropriate are (1) $12,974,883 worth of Baker Botts' time were based on improperly clumped

time entries; (2) Baker Botts' failure to create appropriate matter codes for discrete tasks, and

Baker Botts' timekeepers' failure to consistently apply their time to the correct matter codes that

were created, which hinders an effective analysis of the reasonableness and propriety of Baker

Botts' time; and (3) a multitude of apparent inefficiencies in Baker Botts' handling of the various

matters related to the ASARCO bankruptcy.

II. BACKGROUND

A. The Reorganization Cases And The Plan

8. On April 11, 2005, five of ASARCO's wholly owned direct or indirect

subsidiaries (the "Subsidiary Debtors")6 filed their voluntary petitions in this Court (the

"Subsidiary Cases"). On August 9, 2005, ASARCO filed its voluntary petition for relief under

Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code") in this Court.

Additional ASARCO subsidiaries subsequently filed voluntary petitions in this Court.7

6 The Subsidiary Debtors consist of the following five entities: Lac d'Amiante du Québec Ltée (f/k/a Lake

Asbestos of Quebec, Ltd.); Lake Asbestos of Quebec, Ltd.; LAQ Canada, Ltd.; CAPCO Pipe Company, Inc. (f/k/a/ Cement Asbestos Products Company); and Cement Asbestos Products Company.

7 Encycle, Inc. and Encycle/Texas, Inc. filed on August 26, 2005. ASARCO Consulting, Inc. filed on September 1, 2005. The following entities filed on October 13, 2005: ALC, Inc.; American Smelting and Refining Company; AR Mexican Explorations Inc.; Asarco Master, Inc.; Asarco Oil and Gas Company, Inc.; Bridgeview Management Company, Inc.; Covington Land Company; Government Gulch Mining Company, Limited. The filings of December 12, 2006 included the following entities: Southern Peru Holdings, LLC; AR Sacaton, LLC, a Delaware limited liability company; and ASARCO Exploration Company, Inc. Finally, the most recent filings included Alta Mining and Development Company, Blackhawk Mining and Development Company, Limited, Green Hill Cleveland Mining Company, Tulipan Company, Inc., Peru Mining Exploration and Development Company and Wyoming Mining and Milling Company. All of these subsidiary debtors (except for Encycle/Texas, Inc., which has been converted to a chapter 7 bankruptcy), collectively with ASARCO and the Subsidiary Debtors, will be referred to as the "Debtors." The cases of all Debtors are collectively referred to as the "Reorganization Cases."

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9. Pursuant to an Order of the United States District Court for the Southern District

of Texas, Corpus Christi Division (the "District Court") dated August 6, 2009,8 on August 31,

2009, this Court issued its Report and Recommendation for Entry of Findings of Fact and

Conclusions of Law on Plan Confirmation (as amended and supplemented on September 10,

2009, the "Amended Recommendation") [Bk. Docket Nos. 12748 and 12844]. The Amended

Recommendation recommended confirmation of ASARCO Incorporated and Americas Mining

Corporation's Seventh Amended Plan of Reorganization for the Debtors Under Chapter 11 of the

United States Bankruptcy Code, As Modified on August 20, 23, and 27, 2009 (the "Parent's

Plan") [Bk. Docket No. 12728]. The District Court entered its Memorandum Opinion, Order of

Confirmation and Injunction on November 13, 2009 (the "Confirmation Order"), ratifying the

Amended Recommendation and confirming the Parent's Plan [Dt. Ct. Docket No. 79]. The

Parent's Plan became effective on December 9, 2009, and has been substantially consummated

[Bk. Docket No. 13465].

B. The Scheduling Order And The Fee Applications

10. On December 23, 2009, this Court entered its Order Setting Deadlines and

Procedures Governing Applications Pursuant to Bankruptcy Code §§ 330, 503(b)(3)(D) and

503(b)(4) and Other Related Matters (the "Scheduling Order") [Bk. Docket No. 13566]. In

connection with the Scheduling Order, over 35 law firms, financial advisors and other

professionals have filed fee applications that collectively seek the allowance and payment of

over $200 million in fees and expenses. Among these applications, on February 8, 2010, Baker

Botts filed its Fee Application. In the Fee Application, Baker Botts asks the Court to enter an

order allowing over $119,000,000.00 in fees and expenses ($113,338,522.48 in fees and

8 Agreed Order Withdrawing the Reference Regarding Confirmation and Injunction-Related Issues and Referring These Issues to the Bankruptcy Court for Hearing and Issuance of Proposed Findings and Conclusions [Bk. Docket No. 12317].

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$6,065,598.58 in expenses). As noted above, Baker Botts also made an extraordinary request for

a fee enhancement of $22,667,704.50.

11. On January 15, 2010, ASARCO filed its Motion for Appointment of Fee

Examiner Pursuant to § 105 of Bankruptcy Code [Bk. Docket No. 13686]. On February 23,

2010, the Court heard argument on ASARCO's motion, but declined to rule on the appointment

of a fee examiner until ASARCO filed objections to the fee applications submitted by the various

firms, financial advisors and other professionals involved in the Reorganization Cases. In light

of the expedited nature of the Scheduling Order, ASARCO has decided to withdraw its request

for the appointment of a fee examiner and has, instead, retained its own expert to conduct an

analysis of the Fee Application.

12. Some discovery is ongoing regarding the Fee Application. Moreover, Baker

Botts has not yet provided the details of fees and expenses it intends to claim as fees in defending

the Fee Application. Subject to a reservation of ASARCO's right to supplement, whether by a

further amendment or by presentation of evidence and argument as part of the trial of this matter,

ASARCO submits the following objections to the Fee Application submitted by Baker Botts.

III. APPLICABLE LEGAL STANDARDS

13. Baker Botts bears the burden of proof in support of its Fee Application, and it is

subject to close scrutiny by the Court. Statutory authority governing Baker Botts' requests in its

Fee Application are found in 11 U.S.C. §§ 330 and 331, as well as Federal Rule of Bankruptcy

Procedure 2016(a). The Fifth Circuit has provided further guidance to the Court in the form of

factors the Court should consider when determining whether the requested compensation is

reasonable. Finally, the Southern District of Texas has adopted certain guidelines to be

considered by the Court.

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A. Baker Botts Bears The Burden Of Demonstrating The Propriety Of The Requested Award In The Four Corners Of The Fee Application.

14. The fee applicant bears the burden of proof on its claim for compensation. In re

WNS, Inc., 150 B.R. 663, 664 (Bankr. S.D. Tex. 1993). "Generally, fee applications, standing

alone, must contain sufficient detail to demonstrate compliance with § 330. Any uncertainties

due to poor record keeping are resolved against the applicant." In re 530 W. 28th St., L.P., No.

08-13266, 2009 Bankr. LEXIS 4101, at *25 (Bankr. S.D.N.Y. Dec. 11, 2009) (citations omitted)

(citing In re Poseidon Pools of Am., 216 B.R. 98, 100-01 (E.D.N.Y. 1997)); see also In re New

England Caterers, Inc., 115 B.R. 724, 729 (Bankr. D. Mass. 1989) ("An application for fees

should be self-contained, including enough material on its face for [the court] to review the

charges.").

B. Title 11 U.S.C. § 330(a)

15. Section 330(a) articulates the basic standards for compensation of professionals'

fees and expenses in a bankruptcy case. More specifically, § 330(a)(1) permits the Court to

award "reasonable compensation for actual, necessary services rendered" and to reimburse the

applicant for "actual and necessary expenses" incurred. See 11 U.S.C § 330(a)(1)(A). The Court

retains discretion, however, to award "less than the amount of compensation that is requested."

Id. at § 330(a)(2). Moreover, § 330(a)(4)(A) makes it clear that "the court shall not allow

compensation for":

(i) unnecessary duplication of services; or (ii) services that were not –

(I) reasonably likely to benefit the debtor's estate; or (II) necessary to the administration of the case.

Id. at § 330(a)(4)(A).

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16. To the extent that a fee applicant's requested compensation is not per se

prohibited under subsection (a)(4), § 330(a)(3)(A) provides five non-exclusive factors for the

Court's consideration in evaluating requests for compensation:

In determining the amount of reasonable compensation to be awarded to … [a] professional person, the court shall consider the nature, the extent, and the value of such services, taking into account all relevant factors, including –

(A) the time spent on such services;

(B) the rates charged for such services;

(C) whether the services were necessary to the administration of, or beneficial at the time at which the service was rendered toward the completion of, a case under this title;

(D) whether the services were performed within a reasonable amount of time commensurate with the complexity, importance, and nature of the problem, issue, or task addressed;

(E) with respect to a professional person, whether the person is board certified or otherwise has demonstrated skill and experience in the bankruptcy field; and

(F) whether the compensation is reasonable based on the customary compensation charged by comparably skilled practitioners in cases other than cases under this title.

Id. at § 330(a)(3)(A).

C. Guidance From The Fifth Circuit

17. Similar to the factors addressed in § 330(a)(3)(a), the Fifth Circuit has directed

courts to consider the following factors (the "Johnson Factors") when ruling on attorneys' fee

requests:

a. the time and labor required;

b. the novelty and difficulty of the questions presented;

c. the skill requisite to perform the legal services properly;

d. the preclusion of other employment due to the acceptance of the case;

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e. the customary fee;

f. whether the fee is fixed or contingent;

g. time limitations imposed by the client with the circumstances of the case;

h. the amount involved and the results obtained;

i. the experience, reputation and ability of the attorney;

j. the undesirability of the case;

k. the nature and length of the professional relationship with the client; and

l. awards in similar cases.

In re First Colonial Corp. of Am., 544 F.2d 1291, 1298-99 (5th Cir. 1977) (adopting factors set

forth in Johnson v. Ga. Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974)).

18. Moreover, to the extent that the requested fees are otherwise compensable under §

330 after applying the Johnson Factors, the Fifth Circuit has further required the applicant to

demonstrate that the underlying services "resulted in an identifiable, tangible, and material

benefit to the bankruptcy estate." Andrews & Kurth, LLP v. Family Snacks, Inc. (In re Pro-Snax

Distributors, Inc.), 157 F.3d 414, 426 (5th Cir. 1998) ("Pro-Snax"); see also In re Weaver, 336

B.R. 115, 118-119 (Bankr. W.D. Tex. 2005) ("The Fifth Circuit Court of Appeals [] set the

standard by which bankruptcy courts must judge all attorneys['] fees for persons representing the

bankruptcy estate."). The Pro-Snax "material benefit test" "does not look to the reasonableness

of services or expenses at the time such services or expenses are incurred." In re Quisenberry,

295 B.R. 855, 865 (Bankr. N.D. Tex. 2003). "Rather, the test is an objective after-the-fact test:

'whether [] services resulted in an identifiable, tangible, and material benefit to the bankruptcy

estate,' regardless of the reasonableness of such services at the time that they were rendered." Id.

(quoting Pro-Snax, 157 F.3d at 426). Thus, "Pro-Snax adds a judicially-created hurdle for fee

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applicants to clear before being entitled to payment out of the estate – the applicant must show

that its services materially benefited the estate." Kaye v. Hughes and Luce, LLP, No. 3:06-CV-

01863-B 2007, U.S. Dist. LEXIS 50929 at *29 (N.D. Tex. July 13, 2007).

D. Guidelines From The Southern District of Texas

19. Finally, to assist applicants in preparing applications for compensation and to

provide greater certainty to counsel in the fee process, the bankruptcy judges for the Southern

District of Texas have adopted: (1) the Guidelines for Attorneys' Fee Applications –

Reimbursement of Expenses (the "Southern District Guidelines")9 and (2) the Guidelines for

Compensation and Expense Reimbursement of Professionals in the Procedures for Complex

Chapter 11 Cases (the "Complex Guidelines," and, together with the Southern District

Guidelines, the "Guidelines").10 The Southern District Guidelines provide presumptions for

allowable rates of various types of common expenses (i.e., costs for faxes, copying, delivery,

travel, research and postage), and the Complex Guidelines provide guidelines for practitioners in

recording time and preparing fee applications.

IV. ARGUMENT AND AUTHORITIES IN SUPPORT OF OBJECTION

20. Baker Botts' Fee Application should be reduced on at least three grounds. First,

the Fee Application includes requested compensation for unnecessary services. Second, the Fee

Application includes requested compensation for services that did not provide a material benefit

to the estate. Third, the Fee Application seeks reimbursement of expenses without

demonstrating that such expenses are allowable.

9 See General Order 2001-02 (In the Matter of Guidelines for Fee Applications for Professionals - Uniform

Presumptions Concerning Reimbursement Expenses). 10 See General Order 2009-02 (In Re Adoption of Amendments to Bankruptcy Local Rule 1020, Complex

Cases) formerly governed by General Order 2000-2 (In the Matter of Procedures for Complex Chapter 11 Cases; B.L.R. 1075-1).

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21. Baker Botts has not complied with certain portions of the Guidelines or has not

provided sufficient information to determine whether the Fee Application is in compliance with

the Guidelines. ASARCO further requests that any award be reduced for matters that are not in

compliance with the Guidelines.

A. The Requested Award Should Be Reduced For Services That Were Unnecessary.

22. Baker Botts' Fee Application affirmatively requests an award for services that

were unnecessary and are therefore not compensable. Specifically, Baker Botts' inappropriate

requests for compensation fall into four general categories: (1) duplication of work by Baker

Botts and co-counsel; (2) overstaffing; (3) unclear time entries; and (4) inappropriate tasks or

rates. Moreover, Baker Botts has simply not shown that the overstaffed, unclear and/or

inappropriate requests were necessary to the administration of the case. 11 U.S.C.

§ 330(a)(4)(A)(II) ("[T]he court shall not allow compensation for … services that were not …

necessary to the administration of the case."). The specific items mentioned below are merely

examples of the foregoing.11 Baker Botts' request for compensation with respect to these

categories should be reduced because – as described below – they were unnecessary and/or

provided no benefit to the estate.

1. Duplication Of Work By Baker Botts And Co-Counsel

23. Baker Botts unnecessarily duplicated work performed by both multiple Baker

Botts' attorneys and Baker Botts' co-counsel. Baker Botts may not recover for this duplicative

work. 11 U.S.C. § 330(a)(4)(A)(i). Consequently, the Fee Application should be reduced to

11 ASARCO anticipates that full discovery and expert analysis will reveal many more instances of

overstaffing inefficiencies.

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provide for reasonable compensation for only those non-duplicative and necessary services that

actually provided a tangible and material benefit to the estate.12

2. Overstaffing

24. ASARCO should not have to bear the cost of overstaffing. See In re Green Valley

Beer, 281 B.R. 253, 258 (Bankr. W.D. Pa. 2002); see also Jan Ostrovsky, Doin' Time . . . And

Getting Paid for It: A Report on the Enron Fee Examination Process, 25-1 American

Bankruptcy Institute Journal 32 (2006) (wherein the fee committee concluded that the proper

staffing of a case was a key in determining whether fees were reasonable). As described more

fully below, Baker Botts' overstaffing falls into two categories. First, Baker Botts employed an

unnecessary number of lawyers on tasks with no explanation for the necessity of the multitude of

attorneys. Second, Baker Botts used higher-rate, senior attorneys to perform tasks that should

have been performed by more junior attorneys, or, in some instances, a paralegal or secretary.

a. Multiple attorneys

25. Under the Guidelines, Baker Botts is required to provide an explanation for the

necessity of having multiple professionals and paraprofessionals at the same meetings, hearings

and other matters. Complex Guidelines, § II.E and F. The "[f]ailure to justify this time may

result in compensation for only the person with the lowest billing rate." Id. at § II.E. Baker

Botts' time entries fall short of this requirement. Moreover, the entries of multiple timekeepers

resulted in discrepancies concerning the amount of time spent on each task.

26. By way of example, the Fee Application includes numerous time entries that do

not contain any explanation for why it was necessary to have more than one attorney and/or

12 Some examples of duplicative work are set forth below at ¶¶ 25-26. Discovery and expert analysis is

necessary to determine whether and to what extent there may have been a duplication of effort between Baker Botts and its co-counsel. ASARCO reserves the right to supplement its objection upon the conclusion of discovery concerning this category.

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paralegal present (or why different timekeepers billed different amounts of time for performing

the task). While still falling short of the requirements under the Guidelines, other time entries

only contain a conclusory explanation of the need for multiple professionals.

27. A particularly egregious example of overstaffing occurred during the

confirmation hearing. As many as 27, and no fewer than 19, Baker Botts attorneys billed time

for attendance on each of the 8 days of the hearing.13 See Appendix 3 to Thirteenth Interim Fee

Application [Bk. Docket No. 13208-5], at 39-43, 46-49;14 Id. [Bk. Docket No. 13208-7], at 45-

47, 49; Id. [Bk. Docket No. 13208-8], at 64-65, 67-69; Id. [Bk. Docket No. 13208-9], at 43-44,

46-47; Id. [Bk. Docket No. 13208-13], at 63-77, 86-100; Id. [Bk. Docket No. 13208-14], at 1.

On average, 22 Baker Botts attorneys billed time for attending each day of the confirmation

hearing. Id. With rare exceptions, the time entries merely announce that the attorney attended,

live or by telephone, the hearing. Id. One notable exception to this was J S Janoe, whose entries

on August 11 and 18 explicitly state the purpose of his attendance. Appendix 3 to Thirteenth

Interim Fee Application [Bk. Docket No. 13208-9], at 44, 47. Interestingly, one Baker Botts

paralegal billed for attendance at the confirmation hearing on a Sunday (when Court was not in

session), and an attorney billed for attendance at the confirmation hearing on August 21, when

the hearing ended on August 20. Appendix 3 to Thirteenth Interim Fee Application [Bk. Docket

No. 13208-13], at 83; Id. [Bk. Docket No. 13208-7], at 52.

28. Other examples of overstaffing abound. Of 54 hearing days analyzed by

ASARCO, more than 3 Baker Botts attorneys billed time for attendance on 50 days. See, e.g.,

Appendix 3 to Ninth Interim Fee Application [Bk. Docket No. 8792-12], at 22 (3 attorneys billed

13 These figures do not include non-attorneys, but do include attorneys who attended parts of the confirmation

hearing. 14 All pinpoint citations to docket entries refer to the page of the filing, not the page of the particular invoice

being referenced.

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15

for preparing for and participating in a May 21, 2008 board meeting; 1 attorney billed 7.0 hours

for "participating in Board Meeting," while the other 2 billed 6.7 and 4.7 hours for time that

included preparing for the meeting), 28 (5 attorneys attending a board meeting); Id. [Bk. Docket

No. 8792-6], at 38-39 (5 attorneys attended a tax hearing on March 12, 2008 – each billing a

different amount of time for the task); Id. [Bk. Docket No. 8792-14], at 99 (6 attorneys and a

summer associate appearing in person or on the telephone in a hearing – each with a different

amount of time billed); Appendix 3 to First Interim Fee Application [Bk. Docket No. 955-9], at

37 (J L Kinzie, C L McDowell and J R Prince for preparation and attendance of meeting with

creditors, again with no explanation of the need for three different attorneys, and these entries

suffer from the further problem that they are block-billed). Moreover, there appear to be

significant inefficiencies associated with the depositions taken in, and the trial of, the AMC

litigation.

29. A debtor's estate must be administered as efficiently and economically as

possible. In re Hudson Shipbuilders, Inc., 794 F.2d 1051, 1058 (5th Cir. 1986). In the absence

of a clear explanation from Baker Botts of the extraordinary circumstances justifying the need

for multiple attorneys on these projects, the standard of "one attorney for one item" should also

apply to projects undertaken by Baker Botts where multiple timekeepers were employed. In

such instances, the Court should allow only the fees of the attorney with the lowest billing rate.

b. Inefficient use of attorneys

30. An analysis of Baker Botts' billing records indicate that 98 timekeepers (out of the

695 total timekeepers who billed time to the ASARCO bankruptcy) accounted for approximately

86% of the fees Baker Botts invoiced. This leaves 597 timekeepers to account for only 14% of

the total fees. This suggests an inefficient use of timekeepers, as it is certainly more efficient to

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use attorneys and paraprofessionals regularly as opposed to one-off, discrete tasks, which require

significant time for the timekeeper to familiarize himself with the case.

31. A cursory review of Baker Botts' fee invoices revealed a practice of staffing

projects that could have been accomplished by lower-rate attorneys (or staff) with much more

experienced (and expensive) attorneys. This practice led to the estate being charged more than

was reasonable and necessary for the task. See, e.g., Appendix 3 to Fifth Interim Fee

Application [Bk. Docket No. 4450-10], at 23, 29 (B D Pingree, who bills at $600/hour,15 billed

1.0 to file a document); Appendix 3 to First Interim Fee Application [Bk. Docket No. 955-9], at

2, 33 (B D Pingree performing legal research); Appendix 3 to Seventh Interim Fee Application

[Bk. Docket No. 6334-6], at 37-40, 47 (senior attorney performing legal research). Further, all

attorneys who performed document review tasks should have been billed at the lowest billing

rate of any document review attorney, which would result in a reduction of $1,689,298.

3. Unclear billing

32. A fee applicant's bills must be clear in order for a court to comply with its duties

under § 330 to closely examine an application submitted for approval. In the instant case, many

of Baker Botts' time entries are improperly clumped or grouped and/or vague, which prevents a

meaningful analysis by the Court. Further, Baker Botts failed to open new matters for discrete

projects, and Baker Botts timekeepers failed to properly assign their efforts to the proper matters,

which prevents both a full evaluation of all efforts associated with a particular matter and a full

contextual analysis of the efforts of all timekeepers actually working on a matter. As described

more fully below, the unclear time entries come in two varieties: (1) block or clumped billing, in

which an attorney or staff member would bill multiple tasks in one day without setting forth the

15 ASARCO does not complain herein about the billing rates of any particular Baker Botts attorney. ASARCO does, however, object to Baker Botts' use of more expensive attorneys for certain tasks when lower-rate attorneys (or staff) could have accomplished the task more efficiently.

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amount of time spent on each task; and (2) vague entries where the task performed, or the subject

of the task, is unclear, redacted, or simply non-existent. In addition, compensation for these

services must be reduced because Baker Botts cannot demonstrate that these services provided a

material benefit to the estate. See Pro-Snax, 157 F.3d at 426.

a. Improperly clumped or grouped time entries

33. The Complex Guidelines require counsel to segregate matters: "[i]f a number of

separate tasks are performed on a single day, the fee application should disclose the time spent

for each such task, i.e., no 'grouping' or 'clumping.'" Complex Guidelines, § IID. Here, a mere

sampling of Baker Botts' underlying invoices demonstrate that time entries were routinely

clumped in violation of the Complex Guidelines. See, e.g., Appendix 3 to First Interim Fee

Application [Bk. Docket No. 955-6], at 48 (entry for C M Campbell); Appendix 3 to First

Interim Fee Application [Bk. Docket No. 955-7], at 1-5 (all entries for S D Marcus), 14-51 (the

vast majority of entries for A C Boren); Appendix 3 to Fifth Interim Fee Application [Bk.

Docket No. 4450-9], at 49 (28.8 block-billed hours for B D Pingree and J S Pope); Appendix 3 to

Ninth Interim Fee Application [Bk. Docket No. 8792-4], at 55 (18.1 block-billed hours for K A

Jones on one day). In the foregoing examples, there is no way to distinguish how much time was

spent on a particular task. In sum, more than $12,900,000 worth of Baker Botts' time entries

were clump billed.

b. Vague time entries

34. The Complex Guidelines require a base level of detail for time entries. "At a

minimum, the time entries should identify the person performing the service, the date(s)

performed, what was done, and the subject involved. Mere notations of telephone call,

conferences, research, drafting, etc., without identifying the matter involved, may result in

disallowance of the time covered by the entries." Complex Guidelines § II.C; see also In re

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18

Burival, No. BK07-42271-TLS, Ch. 11, No. BK07-42273-TLS, Ch. 11, 2009 Bankr. LEXIS

2203, at *6 (Bankr. D. Neb. July 21, 2009) ("Vague fee applications that 'camouflage' the

amount of time spent on each task and hinder the court's scrutiny of the reasonableness of the

time expended can lead to reduced fee awards.") (citing In re Baker, 374 B.R. 489, 495 (Bankr.

E.D.N.Y. 2007)). More than $9,300,000 worth of Baker Botts' time records contained

inadequate descriptions under the Guidelines.

35. A sampling of Baker Botts' invoices demonstrate numerous vague time entries

that are not in compliance with the Complex Guidelines. See, e.g., Exhibit D to Fee Application

[Bk. Docket No. 13915-4], at 29 (entry for M A Birdlebough), 63 (entries for J J Wellington for

"Colorado and Texas issues" and "State sales tax issues, focusing on Colorado and Texas" that

have no verb to describe what work was actually performed), 77-94 (time entries for P M Giblin,

the majority of which merely mention "work on legal issues" or "work on legal strategy"). Some

of Baker Botts' time entries do not even have a narrative description of the work performed. See,

e.g., Appendix 3 to Seventh Interim Fee Application [Bk. Docket No. 6334-5], at 32 (time entry

for R M Fontenla for .6 with no description). ASARCO objects to the allowance of fees

associated with these and similar entries as it is impossible to determine whether, and to what the

extent, the matters were necessary or provided a benefit to the estate.

4. Inappropriate tasks or rates

36. Baker Botts' Fee Application contains numerous inappropriate requests, including

(1) overhead costs, such as billing for filing and other clerical or administrative tasks; (2)

attorneys' fees and expenses associated with summer associates; (3) time spent on billing tasks

that would be common to all clients; and (4) non-work travel time at full rates.

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a. Overhead costs

37. The Complex Guidelines prohibit the recovery of fees for administrative

functions: "Time spent in addressing, stamping and stuffing envelopes, filing, photocopying or

'supervising' any of the foregoing is generally not compensable, whether performed by a

professional, paraprofessional, or secretary." Complex Guidelines, II.H (emphasis added); see

also In re Bennett Funding Group, Inc., 213 B.R. 234, 248 (Bankr. N.D.N.Y. 1997) (reducing

fee requests for purely clerical matters by 15%); In re Fibermark, Inc., 349 B.R. 385, 400

(Bankr. D. Vt. 2006) (holding overhead expense will be "denied reimbursement categorically").

Similarly, the Southern District Guidelines provide that professionals may not be compensated

for services that are essentially clerical in nature absent "very exceptional circumstances, such

as emergency preparation for major trials or other exigent circumstances." Southern District

Guidelines, § E (emphasis in original). Moreover, even as to what purports to be an exigent

circumstance, the Southern District Guidelines provide that "[m]ultiple claims in the same case

may be considered as indicative of inadequate workflow planning and inadequate staffing, and

thus not allowed." Id. (emphasis added).

38. Contrary to these Guidelines, the Fee Application includes numerous requests for

compensation relating to filing, service and other purely administrative tasks. For example, in its

First Interim Fee Application, Baker Botts received reimbursement for countless administrative

tasks, including, but not limited to, filing documents with the Court, preparing mailing labels,

and converting documents to .pdf format. See generally, Appendix 3 to First Interim Fee

Application [Bk. Docket No. 955-3 and 955-4], at time entries for R M Fontenla. Baker Botts

also submitted time for the processing of third party invoices. Exhibit D to Fee Application [Bk.

Docket No. 13915-4], at 78 (time entry for S A McKitchen) and 155 (time entry for M D Holt).

Baker Botts billed ASARCO 0.3 hours to "Coordinate return of book to SMU." Appendix 3 to

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Sixth Interim Fee Application [Bk. Docket No. 5541-4], at 3. The foregoing are merely

examples of the types of inappropriate administrative tasks for which Baker Botts billed time.

Ignoring clerical or administrative tasks performed by attorneys, Baker Botts billed $3,469,155

for clerical or administrative tasks performed by paraprofessionals.

b. Summer associates time entries

39. Baker Botts seeks approximately $493,000.0016 in compensation for work done

by summer associates.17 See Exhibit C to Fee Application [Bk. Docket No. 13915-3], at 2, 7, 14-

16, 23, 25, 27-28, 36-38. The summer associates' time consists of billing for attending hearings

in person or "via teleconference" and observing or listening in on depositions. Id.; see also

Appendix 3 to Ninth Interim Fee Application [Bk. Docket No. 8792-4], at 120 (R A Goins),

[Bk. Docket No. 8792-12], at 60 (M J Sparks). This time is excessive, unnecessary and

unhelpful to the estate and is not compensable. In re New Boston Coke Corp., 299 B.R. 432, 442

(Bankr. E.D. Mich. 2003).

c. Time for billing

40. Although Baker Botts may seek compensation for the preparation of its Fee

Application, "those portions of the billing process common to billing both bankruptcy and non-

bankruptcy clients are not compensable under § 330 because they are part of the professional's

overhead." In re Computer Learning Ctrs., Inc., 285 B.R. 191, 219-20 (Bankr. E.D. Va. 2002).

A cursory review of Baker Botts' fee invoices reveals numerous entries for basic billing tasks

that are common to all clients, and are not unique to bankruptcy-related fee applications. See,

e.g., Exhibit D to Fee Application [Bk. Docket No. 13915-4], at 34 (entry for R M Fontenla to

16 After a voluntary reduction of approximately $8,000. 17 This amount includes $2,360.00 billed for work performed by a "Visiting Intern." See Exhibit C to Fee

Application [Bk. Docket No. 13915-3], at 23. This amount does not include the summer associates expenses, such as a $736.90 charge for a "rental car for clerks and gas." Appendix 3 to Ninth Interim Fee Application [Bk. Docket No. 8792-3], at 86.

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"review invoices"); Appendix 3 to Sixth Interim Fee Application [Bk. Docket No. 5541-4], at 7

(entry for Y S Johnson for 4.5 hours to "update time entries using proforma edit"); Appendix 3 to

Seventh Interim Fee Application [Bk. Docket No. 6334-4], at 5 (5.3 hours for P T Cox to "edit

pro forma statements" and "finalize, scan and duplicate pro forma statements"); Appendix 3 to

Seventh Interim Fee Application [Bk. Docket No. 6334-5], at 72 (5.8 hours for K E Wilkerson to

edit pro forma statements and deliver them to accounting). ASARCO objects to Baker Botts'

request for reimbursement for common billing tasks such as these, and any other similar entries

revealed through discovery and expert analysis. In sum, Baker Botts billed nearly $350,000 for

billing-related tasks.18

B. The Requested Compensation Should Be Reduced For Services That Failed To Provide A Material Benefit To The Estate.

41. In addition to the objections referenced above and below concerning

inefficiencies and improper billing in violation of the Guidelines, the Fee Application should also

be reduced because Baker Botts has failed to establish that certain specific services rendered

were necessary and/or provided a material benefit to the estate. In sum, these efforts totaled

$9,022,885 in fees. ASARCO addresses several of these specific instances in its Response and

Objection to Baker Botts' Request for Fee Enhancement ("Response to Fee Enhancement

Application"), which is incorporated by reference in this response as if fully set forth herein,

including negotiating a Sterlite agreement worth over $2.6 billion with only $50 million in

security, resulting in millions of dollars being wasted on plan confirmation efforts and ending in

Baker Botts arguing that it could not effectively enforce the agreement ($8,400,000) and

improperly attempting to advance a revised Sterlite-backed plan after the Court confirmed the

18 This $350,000 is subsumed in the $3,469,155 Baker Botts billed for non-attorney clerical and administrative

tasks.

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Parent's plan ($340,000). In addition to these, Baker Botts billed ASARCO for seeking a cash

bond for the AMC judgment, which was unnecessary, harmful to the estate and denied by the

District Court on these grounds ($186,935); researching and drafting the improper director and

officer bonus motion ($10,207); researching and drafting a memorandum regarding Baker Botts'

ability to work on the AMC litigation on a contingent fee basis ($5,780); and researching and

drafting a memorandum regarding Baker Botts' conflict of interest in suing the Parent in the

AMC litigation ($79,963).

C. Baker Botts Violated The Guidelines For Expenses.

42. Baker Botts' Fee Application requests reimbursement of a variety of expenses

totaling over $6,000,000, of which more than $1,000,000 fails to comply with the Guidelines.

Professionals must "furnish enough specificity for the Court to establish whether a given expense

was both actual and necessary." In re Korea Chosun Daily Times, Inc., 337 B.R. 758, 769

(Bankr. E.D.N.Y. 2005) (quoting In re S.T.N. Enters., Inc., 70 B.R. 823, 834 (Bankr. D. Vt.

1987)). Expenses are "actual" if they are incurred and not based on a formula or pro rata

calculation. See In re Bennett Funding Group, 213 B.R. at 244. Expenses are "necessary" if

they were "required to accomplish the proper representation of the client." In re Am. Preferred

Prescription, Inc., 218 B.R. 680, 686-87 (Bankr. E.D.N.Y. 1998) (citing In re Spanier Bros.,

Inc., 203 B.R. 85, 91 (Bankr. N.D. Ill. 1996)). While the Fee Application subdivides its

underlying expenses into categories, it provides no detail to determine whether the expenses are

otherwise compensable under § 330 or the Guidelines (and Baker Botts' invoices shed little, if

any, light on the nature or necessity of the expenses). For example, the Guidelines provide, inter

alia:

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III. Expenses

* * *

H. Professional Services. A professional employed under § 327 may not employ, and charge as an expense, another professional (e.g., special litigation counsel employing an expert witness) unless the employment of the second professional is approved by the Court prior to the rendering of service.

* * *

Q. Air Transportation. Air travel is expected to be at regular coach fare for all flights.

R. Hotels. Due to wide variation in hotel costs in various cities, it is not possible to establish a single guideline for this type of expense. All persons will be required to exercise reasonable discretion and prudence in connection with hotel expenditures.

* * *

T. Meals (Working). Working meals at restaurants or private clubs are not reimbursable. Reasonable reimbursement may be sought for working meals only where food is catered to the professional's office in the course of a meeting with clients, such as a Creditors' Committee, for the purpose of allowing the meeting to continue through a normal meal period.

U. Amenities. Charges for entertainment, alcoholic beverages, newspapers, dry cleaning, shoe shines, etc. are not reimbursable.

43. Baker Botts' expense submissions are replete with examples of inappropriate and

questionable expenses.19 Baker Botts billed ASARCO $2,022,521.36 for

"Travel/Parking/Mileage." See Exhibit E to Fee Application [Bk. Docket No. 13915-6], at 4. In

Baker Botts' invoices, the vast majority of travel is merely billed as "travel to (location) for

(purpose)," with no explanation whatsoever regarding the mode of transportation (much less the

19 A careful examination of Baker Botts' expense submissions is warranted in part because of Baker Botts'

practice to bill all expenses to its Case Administration matter regardless of which actual matter the expenses were incurred on. See generally, First through Thirteenth Interim Fee Applications [Bk. Docket Nos. 955, 2747, 1998, 3386, 4450, 5541, 6334, 7420, 8792, 10037, 10830, 12720, 13208], at Appendix 3; Fee Application [Bk. Docket No. 13915], at Exhibit D.

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type of fare booked if travel was by plane).20 See, e.g., Exhibit D to Fee Application [Bk. Docket

No. 13915-5], at 6-7. Baker Botts charged another $120,676.98 for "Business Meals" (with no

indication whether clients or opposing counsel were present), and Baker Botts' invoices suggest

that many of these expensed meals occurred without clients. See Exhibit E to Fee Application

[Bk. Docket No. 13915-6], at 1; Exhibit D to Fee Application [Bk. Docket No. 13915-5], at 6-8.

44. Baker Botts billed ASARCO $32,769.69 for faxes sent at a rate of $1.00 per page

for local faxes and $1.25 per page for long-distance faxes. See Exhibit E to Fee Application

[Bk. Docket No. 13915-6], at 4; First through Thirteenth Interim Fee Applications [Bk. Docket

Nos. 955, 2747, 1998, 3386, 4450, 5541, 6334, 7420, 8792, 10037, 10830, 12720, 13208].

These rates are 4-5 times the allowable rate of $0.25 per page. Southern District Guidelines, § B.

Baker Botts also billed ASARCO for the cost of attending seminars, a subscription to

Bankruptcy News, "Security for Brownsville Trial," cigars, gym memberships for attorneys and

staff during trial, and dry cleaning while in trial.21 See Exhibit E to Fee Application [Bk. Docket

No. 13915-6], at 1, 3; Appendix 3 to First Interim Fee Application [Bk. Docket No. 955-3], at 58

(reimbursement for "Issue Numbers 3, 4 and 5 of ASARCO bunkruptcy [sic] news"); Appendix

3 to Fifth Interim Fee Application [Bk. Docket No. 4450-5], at 15 (seminar cost); Appendix 3 to

Ninth Interim Fee Application [Bk. Docket No. 8792-3], at 48-49, 53, 73, 78-80, 89, 110, 114-

15, 123-24 (security fees with no explanation). Baker Botts also sought reimbursement for a

20 As noted in III.Q of the Guidelines, "Air travel is expected to be at regular coach fares for all flights."

ASARCO objects to any air travel expenses to the extent discovery reveals that any fares exceeded regular coach fares.

21 While Baker Botts eventually agreed to withdraw its request for reimbursement for the cigars, gym memberships and dry cleaning, it would not have included these items in its invoices had it not intended to be reimbursed for such expenses. These clearly inappropriate expenses raise red flags as to the veracity of Baker Botts' other expenses, which should be justified by Baker Botts before the Court awards them. In the Fee Application, Baker Botts states that it reduced expenses by a total of $18,574.56. See Fee Application [Bk. Docket No. 13915], at Cover Sheet. Neither the Fee Applications nor the Interim Fee Applications specify the nature or reason for the expense reductions. See generally First through Thirteenth Interim Fee Applications and Fee Application [Bk. Docket Nos. 955, 2747, 1998, 3386, 4450, 5541, 6334, 7420, 8792, 10037, 10830, 12720, 13208, 13915].

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25

"social with lawyers and experts during trial." Appendix 3 to Ninth Interim Fee Application [Bk.

Docket No. 8792-3], at 114.

45. Many of Baker Botts' expense reimbursement requests are utterly devoid of

descriptions of the nature of the expenses. See e.g., Appendix 3 to First Interim Fee Application

[Bk. Docket No. 955-4], at 18-19 (multiple entries for "expenses incurred (date) in (city)" with

no explanation what the expenses were). Baker Botts also sought more than $1,200 in

reimbursement for an "AMEX correction charge for Sona Ramirez no longer w/firm." Appendix

3 to Seventh Interim Fee Application [Bk. Docket No. 6334-4], at 82.

V. OBJECTION TO BAKER BOTTS' FEES AND EXPENSES DEFENDING

ITS FINAL FEE APPLICATION AND REQUEST FOR FEE ENHANCEMENT

46. ASARCO objects to Baker Botts' request for fees and expenses incurred

defending its Final Fee Application and Request for Fee Enhancement. Among other reasons,

these fees and expenses should be denied because Baker Botts has provided no discovery to

ASARCO regarding these requests, despite the fact that ASARCO specifically requested such

information in a request for production to Baker Botts. Baker Botts is in possession, custody or

control of documents and information responsive to ASARCO's request for production, yet

Baker Botts has produced no information regarding fees and expenses it has incurred beyond the

period covered by its Final Fee Application. ASARCO is entitled to discovery on these fees and

expenses in order to test their reasonableness and necessity, and Baker Botts should not be

allowed to profit from its blatant disregard for its discovery obligations.

VI. RESERVATION OF RIGHTS

47. ASARCO expressly reserves the right to amend, modify, or supplement its

Response and Objection to the Fee Application, and to assert additional grounds for objecting to

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26

the Fee Application, to the extent discovery and expert analysis reveal additional issues

concerning the propriety of compensation sought in the Fee Application.

WHEREFORE, ASARCO respectfully requests that the Court: (1) sustain ASARCO's

objections to the Fee Application; (2) award Baker Botts only those fees and expenses as

permitted by law after deducting all non-compensable amounts sought; and (3) grant such other

and further relief as is equitable and just.

Date: May 19, 2010 Respectfully submitted,

BRACEWELL & GIULIANI LLP

By: /s/ Bryan S. Dumesnil J. Clifford Gunter III State Bar No. 08627000 William A. (Trey) Wood, III Texas Bar No. 21916050 Ralph D. McBride State Bar No. 13332400 Bryan S. Dumesnil State Bar No. 00793650 Bradley J. Benoit State Bar No. 24012275 711 Louisiana Street, Suite 2300 Houston, Texas 77002 (713) 223-2300 (713) 221-1212 (facsimile) MILBANK, TWEED, HADLEY & McCLOY LLP Robert Moore (77495) 601 South Figueroa Street Los Angeles, CA 90017 (213) 892-4000 (213) 629-5063 (facsimile)

Counsel to Reorganized ASARCO, LLC

Of Counsel:

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HAYNES AND BOONE, LLP

Charles A. Beckham, Jr. State Bar No. 02016600 Trey A. Monsour State Bar No. 14277200 1 Houston Center 1221 McKinney, Suite 2100 Houston, Texas 77010 (713) 547-2000 (713) 547-2600 (facsimile) Of Counsel to Reorganized ASARCO, LLC

CERTIFICATE OF SERVICE

I certify that a true and correct copy of the foregoing pleading was served by electronic means through transmission facilities from the Court upon those parties authorized to participate and access the Electronic Filing System for the Southern District of Texas on May 19, 2010.

/s/ Bryan S. Dumesnil Bryan S. Dumesnil

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