COMPENSATION OF PROFESSIONALS

Rule No: 
2016-1

 

(a)    General.  Unless otherwise ordered by the court, all applications for compensation, except chapter 13 attorney applications, shall be served on the debtor, trustee, and, when required by Fed. R. Bankr. P. 2002(a)(6), on all parties in interest, and shall be accompanied by an affidavit or declaration containing the following:

                         (1)          the date of entry of the order approving the applicant's employment;

                         (2)          a statement, by date, of the amounts of compensation and reimbursement of expenses previously allowed and amounts paid;

                         (3)          the source of payment for requested compensation and reimbursement of expenses;

                         (4)          the amount of unencumbered funds in the estate;

                         (5)          a narrative summary of the services provided, results obtained and benefit to the estate;

                         (6)          an itemized time record of services for which an award of compensation is sought, including:

                                        (A)  the date the service was rendered;

                                        (B)  the identity of the person who performed the service and the hourly rate of such individual;

                                        (C)  a detailed description of the service rendered and the time spent performing the service;

                                        (D)  the total number of hours spent and the total amount of compensation requested; and

                         (7)          a statement of expenses, by category, for which reimbursement is sought.  For extraordinary expenses, state:

                                        (A)  the date the expense was incurred;

                                        (B)  a description of the expense;

                                        (C)  the amount of the expense requested; and

                                        (D)  the necessity of the expense.

(b)          Counsel for Trustees and Debtors in Possession.  Where compensation is sought by general counsel for a trustee or debtor in possession, the application shall include the following additional information:

                         (1)          a list of names and functions of all other professionals whose employment has been authorized in the case;

                         (2)          the financial condition of the estate with respect to payment of post-petition expenses, including taxes and the United States trustee’s quarterly fees, and any other anticipated expenses that could impact the estate’s ability to meet post-petition expenses;

                         (3)          the status of the case, and the progress of the case toward closing or proposal of a plan of reorganization, identifying any significant impediments to closing or confirmation that are expected.  If a plan has been filed, the statement shall include a projected date for confirmation.  If a plan has been confirmed, the statement shall describe what progress has been made toward consummation of the plan and what remains to be done to close the case.

(c)          Requests for Interim Compensation. In any case in which interim compensation is sought, except a chapter 13 case, the application shall also include a description of the tasks remaining to be done and a projection of the applicant’s future expenses and fees and the anticipated source of their payment.

(d)          Applications of $15,000 or More.  Where the cumulative applications for an applicant are projected to equal or exceed $15,000, the narrative summary required by subsection (a)(5) and itemized time entries required by subsection (a)(6) shall be divided into categories according to the nature of the tasks performed, with the total hours, fees, and expenses broken down for each category.  Categories include but are not limited to: time spent prior to the filing for which the applicant was not paid; general administration; claims analysis and objections to claims; financing and cash collateral; sales of assets; disclosure statement and plan, including drafting and confirmation; and adversary proceedings.

(e)          Chapter 13 Attorney Applications.

                         (1)          Presumptive Fee.  Attorneys representing debtors in chapter 13 cases may be awarded fees of up to $3,500 (or such other amount as may be set by general order) (the “presumptive fee”) without having first filed a written application. The fee shall be compensation for all services rendered to the debtor(s) through entry of the order confirming plan and shall include, without limitation: the filing of a chapter 13 plan in the form required by Local Bankruptcy Rule 3015-1; filing with the chapter 13 trustee the Chapter 13 Information Sheet together with the documents required by Fed. R. Bankr. P. 1007; appearing at the 11 U.S.C. § 341 meeting of creditors; responding to objections to confirmation and motions for relief from stay that are resolvable without argument before the court; negotiating and presenting unopposed or agreed orders assuming or rejecting leases; resolving disputes regarding the valuation of collateral or providing for pre-confirmation adequate protection payments to creditors; amending the initial plan as necessary to obtain an order confirming the plan; adding creditors to the schedules and plan; negotiations with the Department of Licensing; and review of claims.  Attorneys subsequently requesting compensation above the presumptive fee shall comply with Local Bankruptcy Rule 2016-1(e)(3) and file an itemized time record for all services provided for representation of the debtor in any capacity whatsoever in connection with the case.

                         (2)          Fees in Excess of Presumptive Fee.  Pre-confirmation attorneys’ fees in excess of the presumptive fee may be requested by application filed with the court not more than 21days after the entry of the order of confirmation.  The application shall comply with Local Bankruptcy Rule 2016-1(e)(3).

                         (3)          Applications.  All applications shall conform to Local Bankruptcy Form 13-9.  All applications for compensation for services and for reimbursement of necessary costs and expenses shall be served on the debtor and the chapter 13 trustee.  A notice of hearing on the application shall be served on the debtor, the chapter 13 trustee, all creditors holding allowed claims and all parties requesting notice pursuant to Fed. R. Bankr. P. 2002(i).  The application shall include an itemized time record that identifies the date the service was rendered, the identity of the person who performed the service and the hourly rate of the person, a detailed description of the service rendered and the time spent performing the service, and the total number of hours spent and the total compensation requested.  A copy of a proposed order approving the application shall be attached to the application as a separate document and the order shall conform to Local Bankruptcy Form 13-10.  If compensation is requested as part of a motion that seeks other relief, an application and proposed order that conform to Local Bankruptcy Forms 13-9 and 13-10, respectively, shall be attached to the motion.                            

(f)           Provision of Rights & Responsibilities Disclosure. Attorneys representing debtors in chapter 13 cases shall provide debtors with a copy of Local Bankruptcy Form 13-5 entitled “Rights and Responsibilities of Chapter 13 Debtors and Their Attorney” (“Rights and Responsibilities Disclosure”). The Rights and Responsibilities Disclosure shall be signed by each debtor, certifying receipt, and by the debtor’s attorney.  Failure to provide a copy of the Rights & Responsibilities Disclosure may result in denial or disgorgement of attorney fees.

 

Committee Comment

               The categories listed in Local Bankruptcy Rule 2016-1(b) and used in the fee application should be tailored to the services performed in a given case.  For a list of additional suggested project categories, see the United States trustee’s “Guidelines for Reviewing Applications for Compensation & Reimbursement of Expenses filed under 11 U.S.C. § 330, Exhibit A – Project Categories,” published in 28 C.F.R. Part 58, Appendix, found at: https://www.justice.gov/ust/fee-guidelines