WILMINGTON, Del.—New federal Chapter 11 bankruptcy fee guidelines aimed at controlling fees could end up creating burdens for attorneys and clients alike.
A recent Law 360
article addresses these changes and the concerns they have created among bankruptcy attorneys. The U.S. Department of Justice’s U.S. Trustee Program issued the guidelines with the goal of increasing transparency and reining in fee costs in large bankruptcy proceedings. But many bankruptcy professionals feel that the guidelines are unnecessary, onerous and will prove ineffective. They say clients and law firms already are working to achieve these goals, and adding another layer of regulation will make completing such already complex transactions even more challenging.
Womble Carlyle bankruptcy attorney Steve Kortanek
is among those skeptical of the new regulations. He shared his thoughts with Law 360:
“I've always thought that in the biggest bankruptcies, where the fee awards are really enormous, they're that large because they involve multibillion-dollar companies and it really does take hundreds of professionals to make it happen, and those cases really do require a high level of sophistication, experience, a lot of lawyers,” Kortanek said. “I don't believe that the rates or the overall costs of these public M&A deals in a bankruptcy context are probably all that different from the costs of other M&A deals outside of court where the public just doesn't see the numbers.”
Steve Kortanek concentrates his practice in the areas of business restructuring and bankruptcy, as well as bankruptcy litigation. His clients include chapter 11 debtors, senior management, official committees, secured lenders, trade creditors, landlords, asset purchasers, estate representatives, and major creditor and equity holder constituencies. He practices in Womble Carlyle’s Wilmington, Del., office.
This document is intended as an informational reminder and does not constitute legal advice. If you have any questions or would like to discuss a particular situation, please contact Womble Carlyle Sandridge & Rice, LLP. The purpose of this article is to provide general information about significant legal developments and should not be construed as legal advice on any specific facts and circumstances.