Judge authorizes Children’s Hospital bankuptcy experts fees, but not all

As the El Paso Children’s Hospital bankruptcy case gets closer to its end, Judge H. Christopher Mott has authorized the payment of 80 percent of the fees requested by experts and attorneys hired by the troubled hospital to navigate the bankruptcy process.

Both University Medical Center and El Paso County objected to requests for reimbursement filed by Children’s Hospital’s advisers and attorneys.

In orders issued Friday and Monday, Judge Mott said the experts should get 80 percent of what they reported in compensation, which is what the consultants had requested based on pre-approved rates.

AlixPartners Services, a consulting company that specializes in reorganization, requested $795,483 in compensation from May 19, when the bankruptcy case was filed, to September 30. Children’s Chief Reorganization Officer and CEO, Mark Herbers, is employed by AlixPartners (APS). Judge Mott authorized payment of more than $686,000.

In October, AlixPartners argued in court documents its fees were appropriate because it provided services “necessary to the administration of the estate and benefited the estate greately.”

“Indeed, APS has vastly improved the Debtor’s cash management and efficiency by eliminating waste and providing a foundation for a successful organization,” wrote an attorney for Jackson Walker LLP, the firm hired to represent the bankrupt hospital.

For its work in the case, Jackson Walker requested $1,091,878 in compensation for its attorneys. They will receive more than $936,000 as ordered by the judge on Monday.

In addition, Judge Mott authorized full payment of actual expenses. Jackson Walker will get nearly $79,000 and AlixPartners will receive almost $50,000.

The judge will have to weigh in on expenses and fees accrued from November 1 to present.

In an interview with ABC-7 last month, El Paso County Judge Veronica Escobar said the longer the bankruptcy case lingers, the more money El Pasoans lose. She said she was looking forward to local control of El Paso Children’s Hospital funds.

“In the (reorganization) plan will be the request to have the old board turn the keys over to the new Children’s board on January 8th. And at that point they’re out of bankruptcy, they’re post bankruptcy. The Herbers-Partners people go away, the Jackson Walker people go away, and they essentially stop… all the money leaving the estate and going to them will stop,” Escobar said.