Business & Corporate
Delaware District Court Overturns Bankruptcy Court Decision Disallowing Unsecured Claim for Post-Petition Contractual Attorneys’ Fees
It is a quirk of the Bankruptcy Code that while it expressly allows oversecured creditors’ claims for post-petition contractual attorneys’ fees, it is silent as to the treatment of claims for post-petition contractual attorneys’ fees on unsecured claims. In part because the Supreme Court in Travelers Casualty & Surety Co. of America v. Pacific Gas & Electric Co., 549 U.S. 443 (2007) did not directly address the question whether unsecured creditors can recover post-petition contractual attorneys’ fees as part of their claims, courts continue to reach conflicting decisions. Very recently, in connection with a dispute arising out of the Tribune Company’s 2008 bankruptcy, Delaware District Judge Richard G. Andrews reversed the decision below and interpreted Travelers to mean that unsecured claims for post-petition contractual attorneys’ fees are not barred by Section 506(b) of the Bankruptcy Code. Wilmington Trust Co. v. Tribune Media Co. (In re Tribune Media Co., et al), Case No. 15-01116 9 (RGA), 2018 WL 6167504 (D. Del. Nov. 26, 2018).