The high cost of going broke

The Public Record

When a Delaware bankruptcy judge denied The Bon-Ton Stores Inc.’s request to pay a $500,000 work fee to a group interested in buying the department store chain as a going concern, it meant roughly 250 department stores under names like Boston Store, Carson’s, Herberger’s and Younkers would soon be going out of business. The company’s assets were ultimately sold to liquidation firms in late April and the final sales were underway within days.

The decision and sale ended a turbulent few months as Bon-Ton management unsuccessfully sought to find a buyer to continue the business and retain its more than 20,000 employees. Those efforts required hours of work and an army of advisors to navigate complex challenges. Two law firms, an investment banker and a financial advisor retained by Bon-Ton had 73 people working on the project in April alone, according to court records.

Those firms, Paul, Weiss, Rifkind, Wharton & Garrison LLP; Young Conaway Stargatt & Taylor LLP; AlixPartners LLP; and PJT Partners LP, racked up more than $6.1 million in fees and expenses in February, March and April, plus another $6.5 million in capital raising and restructuring fees for PJT Partners.

In April alone, the New York-based law firm Paul, Weiss had 11 partners, seven counsel, 14 associates and 16 paralegals working on the Bon-Ton project. New York-based financial advisors AlixPartners is seeking payment for nearly $15,500 in April airfare costs, according to court records.

Here’s a monthly breakdown for each of the four firms:

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Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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