On 15 June 2015, the US Supreme Court ruled that a law firm could not recover fees it incurred in defending its own fee application. The ASARCO Case The case involved the copper company ASARCO LLC that filed for Chapter 11 protection in 2005 to deal with cash flow and environmental issues, among others. ASARCO retained Baker Botts (“law firm”) to represent it in the Chapter 11 case. Among other services, the law firm pursued fraudulent transfer claims against ASARCO’s parent, obtaining a judgment for $7 billion – $10 billion, arising from the parent’s forced sale of another subsidiary. The judgment facilitated a successful Chapter 11 reorganisation, where creditors were paid in full. The law firm filed a fee application for $120 million, and the parent-controlled debtor objected to the fees. The Bankruptcy Court overruled the Debtor’s objections and approved the law firm’s fee application, as well as $5 million in fees incurred defending the law firm’s fee application.
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