Any business seeking to reorganize formally through Chapter 11 will require the assistance of specially trained professionals. Depending upon the size and complexity of the case, it would not be uncommon for a debtor to employ bankruptcy counsel, a financial adviser, an investment banker and a claims agent. In addition, the Bankruptcy Code permits the formation of official creditor committees that can be expected to hire their own army of professionals. All of these court-appointed professionals are entitled to recover their reasonable fees and expenses from the estate pursuant to Sections 327, 328 and 330 of the Bankruptcy Code.
But what about those professionals who are retained by an individual creditor, shareholder or indenture trustee? Should they be compensated by the bankruptcy estate as well? In a recent decision, In re S&Y Enterprises, Case No. 10-50623 (Bankr. E.D.N.Y., filed Sept. 28, 2012, Docket No. 160), the U.S. Bankruptcy Court for the Eastern District of New York addressed that question by narrowly construing Sections 503(b)(3)(D) and 503(b)(4) of the Bankruptcy Code as an avenue to recover such fees and expenses provided a “substantial contribution” is made in the case.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
