Bankruptcy/Cases Under Review: SCOTUS Grants Certiorari To Decide If Bankruptcy Attorneys Can Get Compensation For Defending Fee Application Requests Relating To “Core Fees”

Bankruptcy/Cases Under Review: SCOTUS Grants Certiorari To Decide If Bankruptcy Attorneys Can Get Compensation For Defending Fee Application Requests Relating To “Core Fees”

Fifth and Ninth Circuits Are Split On The Issue.

     Today, the U.S. Supreme Court granted certiorari to resolve whether bankruptcy judges have discretion under Bankruptcy Code section 330(a) to award bankruptcy attorneys fees and costs for defending fees/expenses which are the subject of fee applications for “core” fees. (It has long been recognized that fees and costs can be awarded for preparing bankruptcy fee applications.) The Ninth Circuit, in In re Smith, 317 F.3d 918, 929 (9^th Cir. 2002) said “yes,” while the Fifth Circuit, in Baker Botts L.L.P. v. ASARCO LLC, 751 F.3d 291 (5^th Cir. 2014) said categorically “no.” The Fifth Circuit, in effect, denied about $5.5 million in fees and costs to Baker Botts in the ASARCO bankruptcy if we read the Fifth Circuit opinion correctly, leading to a grant of certiorari (No. 14-103) to resolve the split among federal circuit courts.