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The Bankruptcy StrategistKickerFeaturesTopicsLitigationSectionsNewsLJN Newsletters

Three for Three

By Veronique A. Urban and Ted A. Berkowitz
December 20, 2013

As can be expected, bankruptcy cases often involve numerous claimants holding general unsecured claims against the debtor. As a result, an official committee is usually appointed under Bankruptcy Code section 1102 to represent the interests of all of the debtor's unsecured creditors. Upon approval of the bankruptcy court, Bankruptcy Code section 1103 authorizes the committee to retain attorneys, accountants and other professionals to assist it in performing its services during the course of the bankruptcy case. The committee's professionals are paid by the estate for their services in accordance with Bankruptcy Code sections 503(b)(2) and 330.

Recently, controversy arose when the individual members of the committee sought to have their professional fees paid by the estate. The decision in In re AMR Corporation, et al., Case No. 11-15463 (Bankr. S.D.N.Y. Sept. 13, 2013), highlights a growing trend that allows committee members and other creditors to bypass Bankruptcy Code section 503(b) and have their professional fees paid through a debtor's plan of reorganization.

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