Patrick M. Ryan, left, and Francis J. Lawall, right, of Troutman Pepper Hamilton Sanders. Courtesy photos
In addition to judicial oversight, bankruptcy cases are also supervised either through the office of the U.S. Trustee or a bankruptcy administrator. Funding for those programs is generated through quarterly fees taxed against a debtor, which fees over the last few years have risen substantially. Until recently, the amount of the quarterly fees assessed differed depending upon whether a U.S. trustee or bankruptcy administrator was employed in the district where the case was pending. That disparity in the quarterly fees charged has generated consternation among debtors and has given rise to an interesting constitutional challenge as a result.
On May 25, the U.S. Court of Appeals for the Second Circuit reaffirmed the U.S. Constitution’s requirement of uniformity in bankruptcy legislation and rulemaking. In doing so, it provided a reminder that while not always at issue, the Constitution’s bankruptcy provisions will be dispositive wherever applicable.
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