June 01, 2016 Articles

Delaware Bankruptcy Court Denies "Fees on Fees" Provision in Retention Application

This decision deals a harsh blow to estate professionals.

By Joseph C. Barsalona II

In a matter of first impression, the U.S. Bankruptcy Court for the District of Delaware in In re Boomerang Tube, LLC, No. 15-11247 (Bankr. D. Del. Jan. 29, 2016), struck a provision in retention applications for co-counsel to the official committee of unsecured creditors, which allowed fees for the successful defense to any objection to their fee applications under 11 U.S.C. § 328(a). By this decision, the court extends the Supreme Court’s holding in Baker Botts L.L.P. v. ASARCO LLC, 135 S. Ct. 2158, 2169 (2015), which governs section 330, to effectively preclude a fee defense provision in a retention application for estate fiduciaries under section 328(a).

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