Bankruptcy: Chapter 11 Attorneys Not Entitled To Recoup Further Fees For Fee-Defense Litigation

 

SCOTUS Decides American Rule Is In Play, With Congress Not Overriding In 11 U.S.C. § 330(a)(1).

    The United States Supreme Court, in Baker Botts L.L.P. v. Asarco LLC, No. 14-103 (June 15, 2015) (published), rejected Baker Botts’ application to obtain another $5 million in fees for successfully supporting its prior professional fee work as debtor’s company’s Chapter 11 counsel (rebuffing the challenges to fee applications by debtor itself).  The predicate statute relied by in Baker Botts, 11 U.S.C. § 330(a)(1), did not abrogate the American Rule (each party bears its own fees/costs in the absent of a contract or statute to the contrary) given that the language “services rendered” could not be read to cover fee-defense litigation work, as opposed to standard Chapter 11 estate work.  This was a 6-3 decision.

A round, white Botts’ dot.  Bidgee (2009).  Creative Commons Attribution-Share Alike 3.0 Unported license.