U.S. Trustee Program Holds Hearing to Examine Professional Fees
Business bankruptcy attorneys will look to justify their professional fees at a public hearing today that is part of an examination by the U.S. Trustee Program of fees charged in chapter 11 cases, the Wall Street Journal reported today. Companies under bankruptcy protection and certain creditor groups have always had to secure court permission to hire attorneys and other professionals, and they regularly submit the fees and expenses for a trustee's scrutiny and court approval. The U.S. Trustee Program wants law firms to make additional disclosures, including submitting rate comparisons between what their firms charge in a specific bankruptcy case and what they charge in other matters, disclosing the highest, lowest and average hourly rates for each. The watchdog would also like attorneys to draw up budget and staffing plans at the outset of a case, outlining the resources expected for everything from litigation to asset sales. Hundreds of law firms and attorneys, as well as professional groups and law professors, have weighed in via comments in the proceeding, arguing that the proposed changes would actually increase the already-high price tag for chapter 11 cases and create unnecessary work for professionals at a time when their clients are in crisis.