Supreme Court of the United States

Summary

Supreme Court of the United States Baker Botts L.L.P. v. ASARCO LLC (2015)

In that vein, work performed in defending a fee application may, in some cases, be a relevant factor in calculating “reasonable compensation.” Consider a bankruptcy attorney who earns $50,000—a fee that reflects her hours, rates, and expertise—but is forced to spend $20,000 defending her fee application against meritless objections. It is within a bankruptcy court’s discretion to decide that, taking into account the extensive fee litigation, $50,000 is an insufficient award.
Source: Wikisource

Supreme Court of the United States Baker Botts L.L.P. v. ASARCO LLC (2015)

But the phrase “reasonable compensation for actual, necessary services rendered” neither specifically nor explicitly authorizes courts to shift the costs of adversarial litigation from one side to the other—in this case, from the attorneys seeking fees to the administrator of the estate—as most statutes that displace the American Rule do.
Instead, §330 (a) (1) provides compensation for all §327 (a) professionals—whether accountant, attorney, or auctioneer—for all manner of work done in service of the estate administrator.
Source: Wikisource

Supreme Court of the United States Baker Botts L.L.P. v. ASARCO LLC (2015)

By contrast, an attorney representing a private party, or a professional working outside of the bankruptcy context, generally faces fee objections made only by his or her client—and those objections typically are made outside of court, at least initially. This process is comparatively simple, involves fewer parties in interest, and does not necessarily impose litigation costs. Consequently, in order to maintain comparable compensation, a court may find it necessary to account for the relatively burdensome fee-defense process required by the Bankruptcy Code.
Source: Wikisource

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