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In Hoover v. Harger (In re Jones),[1] the Bankruptcy Appellate Panel for the Sixth Circuit considered an appeal from an attorney who was sanctioned sua sponte by the Northern District of Ohio’s bankruptcy court and ordered to pay opposing counsel’s attorney fees. The appellant alleged that the bankruptcy court had abused its discretion in imposing sanctions based on erroneous factual findings.
It has become increasingly common for companies to use nonattorneys in attorney roles for the purpose of cutting costs. However, occasionally these “fee-saving” measures actually end up costing a company even more than if they had an attorney do the work in the first place. Nowhere can this be more problematic [or expensive] than in the bankruptcy area, particularly if the company fails to have procedures in place to recognize and react to the automatic stay in routine collection matters.
In Baker Botts L.L.P. v. ASARCO,[1] the Supreme Court held that under § 330(a)(1) of the Bankruptcy Code, estate professionals are not entitled to payment of fees and expenses incurred in connection with the defense of such professional’s fee applications.
