A court order on Tuesday gave Brobeck Phleger & Harrison about $10 million in fees, along with other law firms involved in litigation on behalf of Western MacArthur Co in a decade-long battle over asbestos claims. It’ll help Brobeck’s debts of around $47 million.

The fees will be divvied up between Brobeck and several other law firms involved in the litigation. The payment was contingent upon the U.S. bankruptcy court in Oakland, Calif., approving Western MacArthur’s bankruptcy plan, which it did while approving $2 billion in settlements between Western MacArthur, and Hartford Insurance Co. and United States Fidelity & Guaranty Co.

“It’s a step in the direction of getting those fees confirmed,” said former Brobeck partner Stephen Snyder, who is overseeing the firm’s liquidation. A district court may still have to approve a fee application.

As of November, the firm owed Citibank $28.5 million, and it owed $18.5 million to unsecured creditors with known claims.

The remaining attorney fees are tied to the amount of money the insulation contractor recovers from other insurance carriers. Snyder said the total sum of attorney fees is “south of $50 million” and that Brobeck’s share, if approved by the court, “should exceed $15 million.”

Other firms that will get a cut of the fees include Faricy & Roen; Miller, Starr & Regalia; and Morgan, Lewis & Bockius. It’s unclear how much each of these firms will get. Morgan Lewis got involved in the case last year following Brobeck’s February 2003 collapse. Many of the Brobeck lawyers representing Western MacArthur joined Morgan Lewis.

Snyder said Brobeck’s partnership agreement was amended in February to specify the percentage of fees that Morgan Lewis would get from taking over the case. But he said Citibank, Brobeck’s biggest creditor, might have changed those terms in its negotiations with Morgan Lewis.

David Halbreich, now a partner at Morgan Lewis and one of the lead lawyers in the Western MacArthur litigation, said the amount of attorney fees designated to Morgan Lewis “changed because Citibank got involved,” but said he couldn’t say what the terms were.

Scroll to Top