New Legislation Has Several Potential Professional Compensation Implications
After eight years, a new bankruptcy bill seems to be on the verge of passage. While the bulk of the new bill deals with consumer debtor issues, there are several sections of the bill that are related to professional compensation matters. The most important sections related to professional compensation are listed within.
Don’t Miss the Professional Compensation Committee Meeting: April 30, 2005, 8–9:30 a.m.
The Professional Compensation Committee will have two presentations at its committee meeting. The first, by Steve Schwaber and Ed Malpass, will address professional compensation issues faced by smaller law firms including retainer issues, insider control issues, scope of service issues, dealing with the UST Office, etc. This program will provide an important discussion of practical issues in what are critical parts of chapter 11 Practice.
The second presentation will be an overview of Law of the ABI Chapter 11 Professional Fee Study by Prof. Stephen Lubben of Seton Hall University School. Prof. Lubben is the study’s reporter; for those who have not regularly reviewed the ABI’s main web page here is the Joint ABI/Seton Hall press release on the Fee Study.
Selected Court of Appeal Decisions Under 11 U.S.C. §§328, 330 and 331 Addressing Professional Compensation Issues
- In re Farmland Industries Inc., 397 F.3d 647 (8th Cir. 2005)
- Discusses payment of source of success fee owed to unsecured creditors’ committee’s financial advisor. Court found no abuse of discretion in requiring amount of success fee to be paid by unsecured creditors represented by committee rather than general estate funds. Case was unusual in that there were two separate committees representing unsecured creditors.
- In re Weinschneider, 395 F.3d 401 (7th Cir. 2005)
- Holding under Lamie that a chapter 7 debtor’s attorney is not entitled to fees from estate.
- Matter of COHO Energy Inc., 395 F.3d 198 (8th Cir. 2004)
- Discusses dispute between two special counsel over contingent fees. First counsel was fired and second attorney was hired on same contingent fee basis. Court approved reduction of first attorney contingent fee due to “unanticipated” developments under 11 U.S.C. §323.
- Specker Motor Sales Co. v. V. Eisen, 393 F.3d 659 (6th Cir. 2004)
- Discusses disgorgement of previously awarded professional fees by chapter 11 debtor’s counsel holding a retainer. Court held that retainer amount could be subject to disgorgement. Court of Appeals quoted district court statement: “Counsel is a gambler in [bankruptcy] proceedings like every other administrative creditor.”
- In re Airspect Air Inc., 385 F.3d 915 (6th Cir. 2004)
- Discusses how to determine whether and under what circumstances employment should be approved under 11 U.S.C. §328.
Call for Authors and e-Newsletter Editors
Are you a member of the Professional Compensation Committee? Do you like to write or edit? Do you want to become more involved with the committee? Well you are in luck: currently, the Professional Compensation Committee is looking for writers and/or editors for its electronic newsletter. If interested, please contact either Chip Bowles at 502-587-3746 or Jim Sweet at 608-257-7189.