Bankruptcy: New Fee Guidelines

New guidelines effective in November may make it harder for lawyers to get paid for work representing debtors' or creditors' committees in large Chapter 11 bankruptcy cases.

Under 11 U.S.C. §330, attorneys seeking to be paid from a debtor's estate must file fee applications with the bankruptcy court. Additionally, many bankruptcy courts have enacted local rules and guidelines with respect to fee applications. The Office of the U.S. Trustee has issued its own set of guidelines; while these don't have the force of law, attorneys pay close attention to them to avoid a fee dispute with the U.S. Trustee.

The U.S. Trustee initially issued fee-application guidelines in 1996, 11 U.S.C. §330, 28 CFR Part 58, Appendix A. Bankruptcy court local rules and guidelines subsequently incorporated many provisions, and fee applications now generally conform to a variety of requirements, such as logging separate time entries for each discrete task and describing actions by project category.

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