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Disclosure of fees in adversary case pursuant to Sect=
BR 2016(b) requires the filing of statements required by BC 329, which pertains to compensation paid or agreed "after one year before the date of the filing of the petition." Not exactly clear whether this means prepetition or postpetition or both. BR 2016(b) also requires supplemental statements, but does not indicate whether these would be for payments or agreements not covered by BC 329. Despite the ambiguities, Collier on BK, citing two decisions not in this Circuit, concludes that all payments must be disclosed. I also believe there is a VZ decision from many years ago that reaches as similar conclusion. There seems to be no distinction for third party payments.
Law Office of Eric Alan Mitnick
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Torrance, California 90503
(310) 792-5864; 792-5866 (fax)
MitnickLaw@aol.com
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To: Cdcbaa Yahoo Listserv
Sent: Thu, Feb 19, 2015 9:58 am
Subject: Re: [cdcbaa] Disclosure of fees in adversary case pursuant to Section 329(a) and FRBP 2016(b)
Do you see disclosure as being required where fees are being paid by a third party? If so, do you see disclosure of the identity of the third party as also being required?
On Wed, Feb 18, 2015 at 10:40 PM, 'Mark J. Markus' bklawr@yahoo.com [cdcbaa] wrote:
You just file the form with the amounts you're being paid in the adversary with an explanation (e.g. "$5,000 retainer to be billed hourly at $X per hour", or whatever)
It's required because the attorney is "representing a debtor in a case under this title, or in connection with such case" pursuant to 329(a).
I don't think the distinction of it being paid with funds not from property of the estate is relevant. See 11 U.S.C. 329(b). Disgorgement can be ordered to "the entity that made such payment". A third party payment is never property of the estate, so that distinction doesn't seem to excuse compliance.
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Mark J. Markus
Law Office of Mark J. Markus
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web: http://www.bklaw.com/
Certified Bankruptcy Law Specialist--The State Bar of California Board of Legal Specialization
This Firm is a Qualified Federal Debt Relief Agency
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On 2/18/2015 9:56 PM, Kirk Brennan kirkinhermosa@gmail.com [cdcbaa] wrote:
Assuming disclosure is desirable, how would that be done for an attorney who represents chapter 7 debtor only in an adversary proceeding (not in the underlying case)?
Since postpetition income in a chapter 7 isnt property of the estate, why would disclosure of fees paid from postpetition funds be necessary?
On Feb 18, 2015 9:21 PM, "cdcbaa cdcbaamailbox@gmail.com [cdcbaa]" wrote:
Be careful. Nondisclosed fees are subject to disgorgement.
d
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:
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?
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 defendants attorney is being paid and by whom. This is particularly the case 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.
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)
Kirk Brennan
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BR 2016(b) requires the filing of statements required by BC 329, which pertains to compensation paid or agreed "after one year before the date of the filing of the petition." Not exactly clear whether this means prepetition or postpetition or both. BR 2016(b) also requires supplemental statements, but does not indicate whether these would be for payments or agreements not covered by BC 329. Despite the ambiguities, Collier on BK, citing two decisions not in this Circuit, concludes that all payments must be disclosed. I also believe there is a VZ decision from many years ago that reaches as similar conclusion. There seems to be no distinction for third party payments.
Law Office of Eric Alan Mitnick
21515 Hawthorne Boulevard, Ste. 1080
Torrance, California 90503
(310) 792-5864; 792-5866 (fax)
MitnickLaw@aol.com
Although this email and any attachments are believed to be free of any virus or other defect that might affect any computer system into which it is received and opened, it is the responsibility of the recipient to ensure that it is virus free and no responsibility is accepted by the sender for any loss or damage arising in any way from its use.
The information contained in this email message and any attached files may be privileged, confidential and protected from disclosure. If you are not the intended recipient, any dissemination, distribution or copying is strictly prohibited. If you think that you have received this email message in error, please notify the sender by reply email, and delete the email message you received and all of the attached files.
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-----Original Message-----
com>
To: Cdcbaa Yahoo Listserv <cdcbaa@yahoogroups.com>
Sent: Thu, Feb 19, 2015 9:58 am
Subject: Re: [cdcbaa] Disclosure of fees in adversary case pursuant to Section 329(a) and FRBP 2016(b)
Do you see disclosure as being required where fees are being paid by a third party? If so, do you see disclosure of the identity of the third party as also being required?
On Wed, Feb 18, 2015 at 10:40 PM, 'Mark J. Markus' bklawr@yahoo.com [cdcbaa] <cdcbaa@yahoogroups.com> wrote:
You just file the form with the amounts you're being paid in the
adversary with an explanation (e.g. "$5,000 retainer to be billed
hourly at $X per hour", or whatever)
It's required because the attorney is "representing a debtor in a
case under this title, or in connection with such case" pursuant
to 329(a).
I don't think the distinction of it being paid with funds not from
property of the estate is relevant. See 11 U.S.C. 329(b).
Disgorgement can be ordered to "the entity that made such
payment". A third party payment is never property of the estate,
so that distinction doesn't seem to excuse compliance.
--
*************************
Mark J. Markus
Law Office of Mark J. Markus
Mailing Address Only:
11684 Ventura Blvd. PMB #403
Studio City, CA 91604-2652
(818)509-1173 (818)332-1180 (fax)
web: http://www.bklaw.com/
Certified Bankruptcy Law Specialist--The State Bar of
California Board of Legal Specialization
This Firm is a Qualified Federal Debt Relief Agency
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