The New York Times reports that WorldCom's bankruptcy monitor is attempting to persuade officials at Goldman Sachs to return a $10m fee the company paid over to the firm just weeks before it had to file for bankruptcy.
WorldCom retained Goldman in June 'to evaluate strategic alternatives for the company.' It was only a short time later that the business had to file for bankruptcy and the creditors' committee have asked exactly what the firm did to merit the payment of the large retainer.
Richard Breeden, the court-appointed monitor, is now thought to be negotiating with Goldman for the return of all or part of the payment. The $10m retainer is thought to be large, even by Wall Street standards. Typically firms charge an upfront payment of up to $1m for a medium-sized asset sale and up to $3m for a larger deal. The big fees are usually only charged after the completion of a transaction.