New Legislation Has Several Potential Professional Compensation Implications
After eight years, a new bankruptcy bill (full text of S.256) 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 below:
- Section 102
- Dismissal or conversion (provides for sanctions against consumer debtor’s attorney under certain circumstances)
- Section 106
- Credit counseling (need to get credit counseling before filing)
- Section 324
- Exclusive jurisdiction in matters involving bankruptcy professionals (provides for exclusive jurisdiction in the district court where the bankruptcy case was filed of all causes of action related to §327 and disclosure under §327)
- Section 407
- Amendments to §330(a) (clarifies how trustee compensation is to be calculated)
- Section 415
- Factors for compensation of professional person (permits certification in bankruptcy to be considered as factor in awarding fees.)
- Section 1206
- Limitation on compensation of professional persons (makes clear fixed or percentage fees can be approved under 11 U.S.C. §328)
- Section 1224
- Compensating Trustees (modifications to permit payment to chapter 7 Trustee for work on cases converted to chapter 13 after 707(b) actions are brought
- Section 1405
- Appointment of trustee in cases of suspected fraud (UST shall move for appointment of a trustee in certain cases where current members of debtor’s management “participated in actual fraud, dishonesty or criminal conduct”)