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An admitted campaign by the Office of the United States Trustee to bar indemnity and exculpation provisions in retention agreements for financial advisors hired by trustees, debtors and committees is yielding some results in recent reported decisions. The attempt to generate a per se rule against a bankruptcy professional’s obtaining, as a term of his or her employment, indemnity or exculpation from the estate for his or her acts of negligence has been unsuccessful. In re Metricom Inc., 275 B.R. 364 (Bankr. N.D. Cal.

Section 1146(c) of the Code provides that delivery of an instrument of transfer (such as a bill of sale or deed) “under a plan confirmed under §1129 of this title, may not be taxed under any law imposing a stamp tax or similar tax.” In some jurisdictions, courts include in §363 sale orders entered in chapter 11 cases, preconfirmation, a provision that the sale is not subject to transfer taxes under §1146(c) because the sale is in contemplation of a plan.

A problem that continues to divide the courts is what, if any, assets are in the chapter 7 estate when a chapter 11 case is converted to a chapter 7 case after confirmation of a plan of reorganization in the chapter 11 case. The problem arises because §1141(b) and typical plan language provide for vesting of assets in the reorganized debtor and the “disappearance” of the chapter 11 estate upon confirmation.