United pays outside advisers millions By Marilyn Adams, USA TODAY As United Airlines' pilots brace for 29% pay cuts, their company is poised= =20 to spend millions for legal and financial services from 11 firms helping=20 chart its recovery. UAL, United's parent company, has retained five law=20 firms and six other firms whose specialties include investment banking,=20 corporate turnarounds, accounting and public relations. A bankruptcy judge= =20 approved the hiring of most of UAL's advisers last week, but two firms'=20 proposed fees =97 which alone run into millions of dollars =97 are being=20 challenged by unsecured creditors. A hearing is set for Jan. 15. Company=20 officials say the advisers' help is critical. Lenders threaten to withhold= =20 financing needed to keep UAL flying unless it meets specific cash-flow=20 targets starting in February. UAL is seeking $2.4 billion a year in labor=20 savings and billions more from suppliers and creditors. United's pilots=20 union said Tuesday that the pay cut, approved by 92% of those voting, saves= =20 UAL $40 million a month immediately. "We're working with bankruptcy experts outside the company to assure United= =20 emerges successfully as a strong competitor," says Chief Financial Officer= =20 Jake Brace. Court records show that advice doesn't come cheap: =95 Management consultant McKinsey & Co., tapped to help devise a turnaround= =20 plan, is seeking $1 million a month plus expenses. =95 Restructuring expert Rothschild expects a $15 million fee =97 in= addition=20 to a $225,000 monthly fee =97 to help UAL complete a reorganization plan. =95 Huron Consulting Group, another restructuring specialist, received a=20 $500,000 retainer. McKinsey's "flat fee of $1 million a month &ellipsis; may not be=20 justified," the creditors say in a filing. They want to know whether it's=20 duplicating work by United's management or other advisers. McKinsey=20 declined comment. The creditors call Rothschild's $15 million fee "a guaranteed flat fee=20 payment unrelated to any benefits Rothschild actually confers." Rothschild= =20 declined comment. It's not unusual for large companies in Chapter 11 to=20 hire high-priced advisers. Kmart reports professional fees paid or accrued= =20 in its case totaled almost $85 million from January through Nov. 27.=20 Bankruptcy experts say UAL needs the best advice available. "They want the= =20 best and the brightest to drop everything and concentrate on this," says=20 Boston corporate bankruptcy lawyer Jon Schneider. "If it really works, $50= =20 million to $100 million in professional fees is worth it." Some employees=20 being pressed for sacrifices disagree. "It's ludicrous for United to ask=20 for so much from workers when they are willing to pay excessive rates to=20 outside consultants," says George Gulliford, a furloughed United mechanic. *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@escape.ca Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Site of the Week: http://www.hilofoodstores.com TnT Webdirectory: http://search.co.tt *********************************************************