Administrative Expense Claims

Split Fourth Circuit Panel Bars Use of Equity to Correct an Oversight in Retention

The majority in the Fourth Circuit based a bright-line rule on the presence of the word ‘the’ in Section 327(a).

Consensual Releases for Sec. 327 Professionals, Committee Members,Trustees and Other Case Administrators

In the aftermath of Purdue Pharmaceuticals it is clear that non-debtors releases in reorganization plans under chapter 11 and, most likely Chapter 12, require the releases to be "consensual." This invokes general principals of contract law which require, inter alia, consideration for the releases. Insiders, like the Sacklers in Purdue, can contribute cash or equity. Insurers, guarantors, and similar parties can similarly fund the releases. However, it is not clear how administrative persons can contribute "consideration" for releases especially where Secs. 326-31 largely govern types of claims that might be asserted against these persons. The Barton doctrine also provides a framework for asserting claims against many of these persons and an obligation for the court to raise claims against such persons even if her parties in interest do not.

Given the pre-Purdue inclusion of boilerplate provisions in many plans for releases of the various counsel and other case administrators, the issue arises under Purdue whether or not such releases are possible post-Purdue and how that might be obtained if they are possible. In a post-Purdue world, counsel, other professionals and committees in reorganization cases may well face significant increased exposure to claims and liability where they may not be able to obtain releases for such claims and liability. Strategies to deal with this change are of obvious import to those attendees and those professionals they deal with in the course of reorganization cases, particularly those in which there is dissatisfaction with these individuals' actions. E.g, The Asarco case in which the reorganized debtor sued its predecessor's former counsel. Business Suggested Speakers Leo Weiss leoweiss@ecentral.com Retired, formerly with he U.S. Trustee Program

What’s a Landlord to Do? How Conflicting Interpretations of § 365(d)(3) Might Render Vastly Different Results in Subchapter V and Beyond

Oct 2024

At the Intersection of ERISA and the Bankruptcy Code: Withdrawal-Liability in Ch. 11 Cases

Sept 2024

Established Law Pointed Judge Lane Toward Dismissing Giuliani’s Chapter 11 Case

New York’s Judge Sean Lane saw no reason for forcing holders of a $148 million defamation judgment ‘to wait years’ for a ‘modest distribution.’

These Records Are Never “Double Platinum”: Medical Records Present Challenges in Health Care Provider Bankruptcy Transactions and Business Closures

Sept 2024

An ‘Admin’ Claim Isn’t Mandated for Nonpayment of Rent Before Automatic Rejection

To align with congressional intent underpinning Section 365(d)(3), Judge Gravelle gave the landlord an administrative claim for base rent due after filing and before automatic rejection.

No Refunds for Overpayment of Unconstitutional U.S. Trustee Fees, Supreme Court Rules

Saying that the constitutional infirmity was “small” and “short-lived,” the majority decided that prospective relief was enough because Congress subsequently enacted a law mandating uniformity in the future with regard to fees for U.S. Trustees and Bankruptcy Administrators

Supreme Says: No Refunds for Overpayment of Unconstitutional U.S. Trustee Fees

Although there was no split of circuits, the Supreme Court decided that Congress provided a sufficient remedy by requiring uniform fees going forward.

Administrative-Expense Payments: A Sure Thing, or a Vague Hope?

May 2024