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Alvarez & Marsal batting clean up at Lehman…

Back in February, this article in Fortune noted how Alvarez & Marsal, a well-known restructuring firm that’s worked at Arthur Andersen post-Enron and HealthSouth post-Richard Scrushy was poised to benefit from the growing credit mess. While Lehman (LEH) wasn’t mentioned in the story, the article did note that “in thornier cases the firm does the dirty work itself, usually with Tony Alvarez, Bryan Marsal, or another partner stepping in as CRO – chief restructuring officer – and doing triage like ordering layoffs, selling off assets, and making overhead cuts.”

Well, judging by this 8K filed late yesterday, Bryan Marsal will now be batting clean-up at Lehman, assuming the bankruptcy court approves. The engagement letter was buried in a filing that was ostensibly about the sale of certain assets to Barclays.

Under the A&M agreement, which has yet to be announced by Alvarez & Marsal, Marsal will bill at $850 an hour for his services. Other A&M employees will bill out from $175 an hour (for an analyst) up to $850 an hour for a managing director. After a quick skim, I haven’t been able to find hourly rates for other clean-ups, so it’s hard to say how these rates compare. The exhibit provides for a $2.5 million retainer to A&M and also notes that an agreement for incentive compensation will need to be hammered out over the next 90 days.

Back in February, Marsal told Fortune: “I can’t tell you how many bank credit analysts last year told me my business would be good in 2008.” How right they turned out to be.