Document Type

Article

Publication Date

2020

Abstract

Large chapter 11 cases can have fees that run into the hundreds of millions of dollars. That's one of the reasons that, in 2013, the Executive Office of the United States Trustee promulgated additional guidelines that affect legal fees in large chapter 11 cases. Bankruptcy courts have been appointing fee examiners and fee committees in large cases to aid the courts in their duty to ensure that the fees and expenses of estate-paid professionals are reasonable. I've been one of those people charged with helping bankruptcy courts review fees. As such, I've seen first-hand what happens when the professionals involved in high-stakes, bet-the-company litigation serve as the actual decisionmakers, rather than involving their clients deeply in their decisions. This article will discuss the dynamics that create a disincentive for most parties to monitor fees in large chapter 11 cases and will then provide suggestions to inside counsel whose organizations find themselves involved in those cases-as the debtor, as a member of the creditors' committee, or as a secured creditor whose collateral is being tapped for the carve-out to pay the professionals' fees.

Publication Citation

28 Am. Bankr. Inst. L. Rev. 39 (2020).

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