A Wisconsin bankruptcy judge is trying to speed up an appealed dispute over how much money bankrupt companies should pay as a fee to the Justice Department for using the U.S. court system, WSJ Pro Bankruptcy reported. On Wednesday, Judge Catherine J. Furay of the U.S. Bankruptcy Court in Eau Claire, Wis., asked a panel of appeals court judges to weigh in on the payment confusion, which she said heightened after federal lawmakers voted to increase the fee last year. Under a new law, companies using chapter 11 protection that spend more than $1 million a quarter on operating expenses pay a fee to the Justice Department equal to 1% of those expenses up to $250,000. The previous cap was $30,000. Government officials estimated the change would affect 10% of companies that file for chapter 11 protection. “Such a drastic increase will have ripple effects across chapter 11 cases in the coming years,” Judge Furay wrote in her request, adding that higher fees will cut into the amount of money that creditors split at the end of a bankruptcy case. Lawmakers who ordered the increased fee payments didn’t define which expenses count toward the fee, leading companies and Justice Department officials to fight over which expenses count, especially for companies with complex financial arrangements.
