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Mirant trustee opposes payment of Houlihan Lokey's fees
New York, Jan. 2 - The United States Trustee in Mirant Corp.'s Chapter 11 case says Houlihan Lokey Howard & Zukin should not receive fees for advising creditors for the five months ending on Dec. 15.
The trustee said in a filing with the U.S. Bankruptcy Court for the Northern District of Texas that creditor's delay in asking the court to approve Houlihan Lokey's employment was "unconscionable" - and therefore the fee should not be paid.
On Dec. 12 the official committee of unsecured creditors of Mirant Americas Generation LLC asked the bankruptcy court to approve its hiring of Houlihan Lokey as financial adviser as of July 25.
The firm is to be paid $175,000 a month for the first 24 months and $125,000 a month after that. It will also receive a transaction fee of at least $2 million.
Mirant made its Chapter 11 filings on July 14 and 15.
Before the filing, Houlihan Lokey had been advising an informal committee of noteholders and has already received $525,000 for work from March 2003 to July 24.
But the U.S. Trustee said the application for "nunc pro tunc" (retroactive) employment should be denied.
The trustee noted that employment of a professional nunc pro tunc should be granted only in "rare or exceptional circumstances."
"The MAGI [Mirant Americas Generation] committee provides no explanation for the nearly five month delay in filing Houlihan's employment application," the Trustee said in a court filing. "This delay is unconscionable in light of the fact that Houlihan has acted as a financial advisor in this case since before the formation of the MAGI committee itself."
The trustee added that it does not oppose Houlihan Lokey's employment as of the filing date of Dec. 12 onwards.
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