$55 Cash Payment Under Claims Procedure Was Consideration, With Class Counsel Obtaining $6.5 Million In Fees And Expenses.
In Tait v. BSH Home Appliances Corp., Case No. 8:10-cv-00711 (C.D. Cal. July 27, 2015), U.S. District Judge David O. Carter approved a $6.5 million payment of fees/expenses to class counsel in a case involving allegations that washing machines were susceptible to mold. Under the settlement which was approved, class members get a $55 cash payment under a 120-day claims process and counsel obtains a separate payment from defendant of the $6.5 million in fees/expenses under a clear sailing provision in the settlement agreement. District Judge Carter ruled that the fees/expenses were proper under the circumstances.
Virginia Ethics Committee Issues Helpful Guidance To Chapter 7 Bankruptcy Attorneys.
On July 23, 2015, the Virginia Standing Committee on Legal Ethics issued an opinion (LEO 1883) indicating that it was proper for Chapter 7 bankruptcy attorneys to take in the entirety of fixed fees for work in a Chapter 7 case before filing it as long as the disclosure is made in the bankruptcy papers. Given that most of the work for a Chapter 7 debtor is done upfront (except for the 341A meeting of creditors), most of the services have already been earned. However, as long it is structured as a fixed fee and taken in pre-petition, the Standing Committee opined this arrangement was acceptable even for future post-petition work. Keep in mind that this opinion involved Virginia law, but it did have some nice reasoning applicable to Chapter 7 bankruptcy work in general based on interviews with bankruptcy lawyers in this area of practice.