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Chapter 11 Trustee Recovers Enhanced Lodestar for Superior Result

08/11/22

 Bankruptcy trustees often perform a thankless job, scrubbing through thousands of no-asset files looking for that one case that will earn them a sizeable commission. While Chapter 7 trustees are paid a commission on funds distributed to creditors, compensation for Chapter 11 trustees more closely resembles an hourly fee engagement. A recent case from Judge Tony Davis of the Western District of Texas illustrates how the two forms of compensation may dramatically differ. In re WC Met Center, LLC, Case No. 21-10698 (Bankr. W.D. Tex. 7/15/22).

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What Is the Difference Between Clerical and Compensable?

06/08/22

 A short order crossed my desk the other day in In re Preferred Ready-Mix, Case No. 21-33369 (Bankr. S.D. Tex. 6/6/22), Dkt. #207. A creditor filed an application for administrative expense. No one objected. However, the Court reduced the fees requested by $73.50 to reflect time spent electronically filing documents. While this little case involves much smaller dollars than the Supreme Court opinion in Siegel v. Fitzgerald, No. 21-411 (U.S. 6/6/22), which came out the same day, it will affect many more cases.

A Little Background

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Objections to Applications Which Include Indemnification for Defense of Fees Sustained

02/01/16

In the recent opinion of In re Boomerang Inc., et al., Case No. 15-11247 (Bankr. D. Del. Jan. 29, 2016), the Delaware Bankruptcy Court considered the United States Trustee’s (“UST”) objections to retention applications of several law firms seeking to represent the Official Committee of Unsecured Creditors (the “Committee”) of Boomerang Tube, LLC (the “Debtor”).

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After Woerner, Courts Look for "Good Gambles"

09/15/15

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Supreme Court Says Lawyers Don't Get Paid for Defending Their Fees

07/08/15

A Texas law firm did a great job and beat back a punitive attack on their fees.   However, the Supreme Court has ruled that they may not receive compensation for defending their work.   Baker Botts, LLP v. ASARCO, LLC, No. 14-103 (6/15/15).

Introduction

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Fifth Circuit Reverses Pro-Snax

04/10/15
In a unanimous decision, the en banc Fifth Circuit Court of Appeals walked back a prior precedent which mandated an identifiable, tangible and material benefit before professionals employed in bankruptcy cases could be compensated.   No. 13-50075, Barron & Newburger, P.C. v. Texas Skyline, et al (5th Cir. 4/9/15).    You can read the opinion here.
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Supreme Court to Hear Dispute Over Fees for Defending Fee Application

10/28/14
The Supreme Court doesn't take many cases on bankruptcy issues.  It has only ruled on attorney's fees in bankruptcy once since the Code was adopted and that ruling was on the narrow issue of whether a chapter 7 debtor's attorney could recover fees from the estate.    As a result, it was big news when the Court granted cert in  No. 14-103, Baker Botts, LLP v.
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Fifth Circuit Panel Urges Re-Examination of Pro-Snax

07/15/14
The Fifth Circuit ruled today that a bankruptcy court following Matter of Pro-Snax Distributors, Inc., 157 F.3d 414 (5th Cir.
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Lessons on Fees from the Fifth Circuit's ASARCO Decision

06/21/14
While the Fifth Circuit has yet to definitively address the quirky Pro-Snax opinion, a new decision provides some helpful guidance on recovering attorneys' fees in bankruptcy.    ASARCO, LLC v. Jordan Hyden Womble Culbreth & Holzer, P.C. (Matter of ASARCO, LLC), No. 12-40997 (5th Cir. 4/30/14).    You can read the opinion here

What Happened

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New Opinion Makes Sense of "Identifiable, Tangible and Material Benefit" Language From Pro-Snax

05/06/12
In Matter of Pro-Snax Distributors, Inc., 157 F.3d 414 (5th Cir.
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