Emporium bankruptcy fees pile up.

Byline: Edward Russo The Register-Guard

Lawyers, accountants and other advisers working on the bankruptcy of Troutman's Emporium - some of them charging eye-opening hourly rates - racked up nearly $2 million in fees and expenses during the first three months of the year.

Emporium parent Troutman Investment Co. already has paid about $1.5 million, or 80 percent, of the total, but it still needs a Bankruptcy Court judge to approve that amount, plus permission to pay the remaining 20 percent, or $400,000.

U.S. Bankruptcy Judge Albert Radcliffe of Eugene also has the authority to lower fees, which could force a firm to give back part of what it has received.

The totals do not reflect charges since April 1 - and there has been a lot of legal work done since that date.

Hourly rates for attorneys varied, with the highest coming from East Coast lawyers and the lowest from attorneys in Eugene.

Paul Traub, who represented Emporium's largest secured lenders, Fleet Retail Finance and Gordon Brothers Retail Funding, both of Boston, Mass., charged the bankruptcy estate of Troutman Investment $595 an hour.

Jay Indyke, the New York-based lead counsel for the committee of largest unsecured creditors, billed the estate $525 an hour.

Such rates did not sit well with some former Emporium employees who are battling Emporium over how much they are entitled to receive in severance pay.

"Most people are appalled at some of the numbers," said Ralph Matteson, a former Levis buyer for Emporium.

But he was unsure if anyone would file an objection with the bankruptcy court by a May 21 deadline. Radcliffe, the judge overseeing the case, is to review the fees during a hearing on June 5.

"I don't know if we would have a legal basis (for an objection)," Matteson said. He doubted if anyone would want to spend more for an attorney to look into the matter.

The $1.9 million total in fees and expenses was billed to Emporium from 12 firms for work done from mid-December through March 31.

Most of the fees and expenses came from out-of-town firms, including Emporium's Seattle-based attorney, Perkins Coie, which charged $425,292 in fees and $33,665 in expenses for a total of $458,957.

Al Smith of Perkins Coie charged Troutman Investment $370 an hour, with other lawyers in the firm making less.

Paralegal assistants did much of the work at law firms, including those at Perkins Coie in Seattle and Portland. They were paid $75 to $200 an hour.

The largest bill came from Indyke's firm, representing Emporium's largest unsecured creditors, such as Levi Strauss & Co., Haggar and other clothing makers. Indyke's firm submitted bills of $474,316 in fees and $44,726 in expenses, for a total of $519,042.

The bills may seem large, but Emporium's local attorney, William Potter, said the bankruptcy is complex, involving the sale of assets of a 34-store operation in five states to pay 1,300 creditors owed more than $30 million.

Potter billed Emporium $230 an hour.

Emporium, the attorneys and advisers have moved quickly to sell assets compared to some bankruptcies that take several months or more, he said.

"It may seem like a lot of money," said Potter - whose firm Arnold Gallagher Saydack Percell & Roberts submitted a total of $155,304 in fees and expenses - "but it's not, especially given that what we were able to accomplish in three months normally takes six months or more."

The only other Eugene firm to bill the estate was Cawood Communications, which charged $16,816 for public relations work early in the bankruptcy.

Fees also were charged by financial advisers, including Inverness Partners, of Portland and Seattle, whose principal John Davidson charged $245 an hour, for a total of $260,416 in fees and expenses, and the accounting firm of Deloitte & Touche, which charged Emporium $140,853.

Emporium closed the last of its stores on Sunday, including its outlet in Gateway Mall.