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Third Circuit Clarifies Issue of Quarterly Trustee Fees Owed By Affiliated Debtors
The Third Circuit has ruled that where affiliated debtors file separate Chapter 11 cases that are administered jointly, each debtor is obligated to pay quarterly fees based on the payment of its respective operating expenses regardless whether it actually wrote the checks to pay for these expenses. Genesis Health Ventures Inc. v. Stapleton (In re Genesis Health Ventures Inc.), No. 03-1225 (March 31).
The court stated that here, “substance trumps form. Payments made on behalf of a debtor, whether made directly or indirectly through centralized disbursing accounts, constitute that particular debtor's disbursements for the purpose of quarterly fees calculations under ' 1930(a)(6). Holding otherwise would allow hundreds of affiliated debtors in Chapter 11 cases to avoid paying fees by having one debtor (or a few debtors) control disbursing accounts.”
Third Circuit Clarifies Issue of Quarterly Trustee Fees Owed By Affiliated Debtors
The Third Circuit has ruled that where affiliated debtors file separate Chapter 11 cases that are administered jointly, each debtor is obligated to pay quarterly fees based on the payment of its respective operating expenses regardless whether it actually wrote the checks to pay for these expenses. Genesis Health Ventures Inc. v. Stapleton (In re Genesis Health Ventures Inc.), No. 03-1225 (March 31).
The court stated that here, “substance trumps form. Payments made on behalf of a debtor, whether made directly or indirectly through centralized disbursing accounts, constitute that particular debtor's disbursements for the purpose of quarterly fees calculations under ' 1930(a)(6). Holding otherwise would allow hundreds of affiliated debtors in Chapter 11 cases to avoid paying fees by having one debtor (or a few debtors) control disbursing accounts.”
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