Committee to Hold Joint Meeting with Professional Compensation Committee at 2004 Winter Leadership Conference
The Consumer Bankruptcy and Professional Compensation Committees will present a joint educational program at the ABI’s Winter Leadership Conference in Scottsdale, Ariz., Dec. 3, 2004 from 9:30–11:00 am. Topics for discussion will include bankruptcy court control over the professional fees charged by creditors in various contexts including proofs of claim, reaffirmation agreements and student loan collections. Speakers will also discuss the question of whether unliquidated legal fees arising from domestic-relations litigation are nondischargeable pursuant to 11 U.S.C. §523(a)(5) and/or (a)(15). The presentation will also include a discussion of disclosure requirements for debtor’s counsel, waivers of conflicts of interest and the implications of recent decisions in the Jore and Fleming cases. The panel of presenters includes Judge Randall J. Newsome of the U.S. Bankruptcy Court for the Northern District of California, Prof. Katherine Porter of the University Nevada Las Vegas and Russ Garrett of Bullivant Houser Bailey PC in Vancouver, Wash.
Redemption Financing and Debtors’ Attorneys’ Fees
by Dennis R. Dow, U.S. Bankruptcy Judge, Western District of Missouri
A chapter 7 debtor seeking to retain personal property secured by a lien has several options available, one of which is redeeming the property from the lien pursuant to §722 of the Bankruptcy Code. Although there remains a split of authority on the question, the prevailing view is that the appropriate measure of value for a contested redemption is the liquidation value of the property. This favorable valuation standard has made redemption motions increasingly popular. Another development making the option more accessible to chapter 7 debtors is the emergence of companies willing to finance the redemption payment. The financing package often includes a provision for payment of fees to debtors’ counsel in connection with the redemption. This fee for preparation of the redemption motion is included in the amount that the debtor finances, which is therefore paid over time with interest. This arrangement raises several ethical questions for debtor’s counsel, including whether acceptance of the fee poses a conflict of interest. Several recent cases address these issues.