Sunday, June 10, 2012

It's actually not that much fun saying, "we told you so."

In 2009, Eric Van Horn and I suggested (here) that bankruptcy lawyers might want to pay some attention to the public perception that their fees might be unreasonable.  (I admit that I'm a little fee-obsessed these days:  see here,* here, here, here, and here.)

This morning, the New York Times weighed in on the issue of bankruptcy lawyers' fees (here).  The go-to quote?
By opposing these guidelines, the lawyers handling big bankruptcy cases show they are out of touch with economic realities. Worse, in resisting improvements in accountability, they undermine public confidence in the integrity of the bankruptcy process. 
Yep.  The right approach--demonstrated with particular skill by Cravath's Rich Levin and the National Bankruptcy Conference--is to work with the Office of the U.S. Trustee to reach a workable compromise.  Ultimately, it's the job of the bankruptcy court to determine whether an estate-paid professional's fees and expenses are reasonable.  The Office of the U.S. Trustee is trying to help bankruptcy courts do their job by giving estate-paid professionals a heads-up as to what the U.S. Trustee Program will consider presumptively unreasonable.  Those professionals who are willing to meet the government halfway by saying, "we are very uncomfortable giving you this information, and we don't think the information will help you, but we are comfortable giving you this other information instead, which will help you" are handling this issue the right way.

*  The way that this first link is set up will count this very post as the first in the list.  You'll want to skip that one, unless your brain likes infinite loops, to move to the others in the list.

1 comment:

Anonymous said...

Your comments need to be looked at in the light of who is the US trustee. If the US trustee is "in bed" with the attorneys and other professionals than your suggestion for improvement continues the "old boys club." My suggestion is that a negotiated process with the creditors committee re: fees and what fees will be allowable and at what rate would assist in holding down the outrageous costs of BK. The US Trustee should be involved in this process to educate the committee that has been vetted by them as to what are the court requirements and what needs to be looked at in terms of charges that are allowable and those that take advantage. There is a reason that BK attorneys are known as "pigs at the trough!"