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On January 14, 2022, a three-judge panel of the Fifth Circuit in In the Matter of Sharon Sylvester (Sylvester vs Chaffe McCall LLP) held that a trustee’s attorney is entitled to compensation under Bankruptcy Code § 330(a) “only for services requiring legal expertise that a trustee would not generally be expected to perform without an attorney’s assistance.” [1]
In a recent decision from the U.S. Bankruptcy Court for the District of Nevada, three proofs of claim filed on behalf of LVNV Funding, LLC — a creditor assignee in the chapter 13 bankruptcy case commenced by Antonia Andrade-Garcia — were disallowed because the statute of limitations on the underlying claims had long ago expired.
Several bankruptcy courts have recently reaffirmed the good faith requirement in all chapter 11 bankruptcy cases.[1] Most notably, the chapter 11 petitions of both the National Rifle Association (NRA) and Stream TV Networks, Inc.[2] were recently dismissed pursuant to 11 U.S.C. § 1112(b) after the courts found that the petitions were filed in bad faith.[3]
The U.S. Bankruptcy Court for the Northern District of Georgia recently issued an opinion detailing the reimbursement limitations under the Bankruptcy Code for services provided by a trustee’s law firm in a chapter 7 case. In In re McConnell,[1] the court denied the trustee’s request for attorneys’ fees and expenses because such services were either part of the trustee’s statutory duties under 11 U.S.C. § 704(a) or such services were not necessary or beneficial to the estate.[2]
Hon. Christopher S. Sontchi approved the retention application of debtors’ counsel over the objection of the U.S. Trustee, finding that counsel (1) complied with the requirements for retention of professionals under § 327 of the Bankruptcy Code and (2) did not violate its conflict waiver with the debtors’ pre-petition ABL lender.[1]
How are subchapter V trustees compensated? The answer under the Code depends on whether the trustee is a standing or nonstanding subchapter V trustee. In reality, though, the answer should be the same in all cases, because, while 28 U.S.C. § 586(b) authorizes the appointment of “standing” trustees in subchapter V, so far all subchapter V cases have involved case-by-case, or nonstanding, trustees. No standing trustees have been appointed to date.[1]
