Disclosure of fees in adversary case pursuant to Section 329(a) and FRBP 2016(b)
Posted: Wed Feb 18, 2015 9:21 pm
Be careful. Nondisclosed fees are subject to disgorgement.
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Dennis McGoldrick, 350 S. Crenshaw Bl., #A207B, Torrance, Ca 90503 310-328-1001-voice
> On Jan 30, 2015, at 8:30 PM, jesseelaw@aol.com [cdcbaa] wrote:
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> If an attorney represents a Chapter 7 debtor in an adversary proceeding do Section 329(a) and FRBP 2016(b) apply requiring disclosure of fees paid to the attorney for representation in the adversary? Section 329(a) requires an attorney for debtor under, or in connection with, a case under Title 11 to file statements (i.e. under FRBP 2016(B)) disclosing any compensation received 1 year or less prior to the bankruptcy case being filed. A supplemental statement is required within 15 days after any additional payment or agreement not previously disclosed. My research did not find anything at all on the topic outside the code and FRBP. I do not see any exceptions for adversary cases as they are under title 11. The disclosure of compensation for attorney of Debtor form has a section relating to services for adversary proceedings and other contested matters. It seems to me that the plain language of Section 329(a) and FRBP 2016(b) require full disclosure of attorney fees paid and agreed to be paid in the adversary case when representing a party that is the debtor in the underlying case. Yet, I researched some of our esteemed colleagues cases on pacer and see no supplemental disclosures of attorney fees filed in Chapter 7 cases where they were representing debtors in the Chapter 7 adversary case. How are the rest of you representing debtors in adversary cases handling disclosure of compensation?
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> I understand the rationale of requiring disclosure of attorney compensation relating to debtor representation in the underlying bankruptcy case to ensure there is no abuse, but I am struggling with this concept in the Chapter 7 adversary context for fees paid from postpetition acquired monies that are not part of the estate. Especially in defending against a dischargeability action it seems to place the debtor at a distinct disadvantage to the plaintiff when the plaintiff is able to tell exactly what the defendant when the creditors counsel receives instantaneous notification through pacer of filed supplemental 2016(b) statements. The creditor then can see the fees the debtor managed to pay or some relative paid for them and hold out for more money in settlement, putting the debtor at a distinct disadvantage in negotiations.
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> Mark T. Jessee
> Law Offices of Mark T. Jessee
> "A Debt Relief Agency"
> 50 W. Hillcrest Drive, Suite 200
> Thousand Oaks, CA 91360
> (805) 497-5868 (805) 497-5864 (Facsimile)
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