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Supreme Court: Prospective Parity Is Answer to Past Trustee Fee Disparity
The appropriate remedy for the past disparity in bankruptcy fees between federal Bankruptcy Trustee and Administrator districts is simply to ensure all the courts are charging the same going forward, the Supreme Court ruled on June 14.
In its 6-3 decision, the high court rejected the other potential remedies of compensating those in Trustee districts — who paid more than those in Administrator districts — or sending those in Administrator districts a bill for the difference between what they paid and the higher price charged in Trustee districts.
The court's decision followed its 2022 ruling in Siegel v. Fitzgerald that the fee disparity between the districts violated the uniformity requirement of the Constitution's Bankruptcy Clause. The disparity arose in 2017 when Congress imposed fee increases in Trustee districts — which are in all states except Alabama and North Carolina — before amending the Bankruptcy Code in 2020 to restore uniformity.
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