Local Rule 2016-1: Compensation of Trustees and Professionals

Rule 2016-1 Compensation of Trustees and Professionals

(a) General. Except as otherwise specifically provided in this Rule, requests for compensation and reimbursement under § 330 of the Code must comply with the guidelines promulgated by the Office of the United States Trustee, available at www.justice.gov/ust.

(b) Trustee.

(1) Applications for compensation for services as trustee must state the maximum amount payable to the trustee as compensation under § 326(a) of the Code. (2) [A] In each Chapter 13 case that is dismissed prior to confirmation of a plan, the standing trustee may deduct, after payment of court fees and costs and other § 503(b) administrative expenses, the sum of $450.00 and an additional amount of $90.00 for each hearing or meeting of creditors beyond the initial meeting that the trustee attended, from funds available for return to the debtors. [B] The award under this paragraph may not exceed the amount specified in Rule 2002(a)(6), Federal Rules of Bankruptcy Procedure, without a separate application. [C] The debtor may object to an award under this paragraph within fourteen (14) days of the entry of the order dismissing the case.

(c) Attorney or Accountant for Trustee, Debtor in Possession, Debtor, Creditors' Committee, or Professional Under 11 U.S.C. § 503(b)(4). (1) [A] Applications for compensation and reimbursement under § 330(a) of the Code must be preceded by an order authorizing the employment of the professional. [B] Unless otherwise specifically authorized by statute, rule or order of the court, an application for allowance of professional fees must be filed before payment of professional fees, including cases where employment of a professional on a contingency fee or percentage basis has been authorized by the court. [C] Fees are not recoverable: (i) for services rendered by a general counsel for an estate in preparing the trustee's application to authorize employment of such general counsel; or (ii) in the absence of exigent circumstances, for services performed prior to the date the applicant filed an application seeking approval of employment by the Court.

(2) Requests for compensation and reimbursement under §§ 330(a) and 503(b)(4) of the Code must contain a statement that the compensation sought will not be shared with another person except as provided in § 504 of the Code.

(3) Applications for compensation for services as attorney, accountant or other professional for the trustee, debtor in possession, debtor, creditors' committee, or under § 503(a)(4) of the Code must include the following detail: [A] a statement that all services for which compensation is requested were performed for or on behalf of the trustee, debtor in possession, debtor, or creditors' committee, and not on behalf of a creditor or any other entity, except in the case of a professional seeking compensation under § 503(b)(4) of the Code; [B] a separate itemization of each service rendered, including— (i) the date for each item, (ii) the actual time spent on each item, and (iii) the charge for the item; [C] each item of service must be sufficiently descriptive to enable the court to determine whether the service was reasonable— (i) an entry such as "research" or "telephone call" will not be sufficient, and (ii) items should not be aggregated, the time spent and the description of individual tasks should be distinctly identified; [D] use of minimum time increments no larger than 1/10 of an hour; [E] a statement of the hourly billing rate of each professional person, legal assistant or employee for whom compensation is sought; [F] an itemization of costs by category and method of computation; and [G] identify any board certifications in the bankruptcy field held by the applicant. (4) [A] Applications by an attorney or accountant for a debtor must in addition show that all services performed were in connection with the performance by the debtor of the duties prescribed by the Code, were otherwise beneficial to the debtor's estate or were rendered under an order of the court. [B] Services on behalf of the debtor in discharge and dischargeability actions are not compensable from the estate.

(5) Except as provided in paragraph (h)(2) of this Rule, applications for fees and expenses must: [A] be categorized to group identifiable projects separately; [B] include a narrative description of major projects; and [C] include a description of the bill attributable to all categories. For example, representation of a party in an adversary proceeding, a major contested matter, or plan formulation, are categories that are to be separately reported on the fee application. (6) [A] Except as otherwise ordered by the court or provided by rule, applications must be noticed by the applicant in accordance with AK LBR 2002-1(a). [B] Applicants must keep themselves informed as to the progress of administration of the estate so that notice may be included in the notice of the final accounting, or so that notice can be sent within the time allowed after confirmation of a plan in a case under chapter 9 or 11.

(7) The court may, in its discretion, order a hearing even if no objection is filed.

(d) Interim Fees.

(1) No interim fees or expenses for attorneys or accountants will be paid in a chapter 7 proceeding unless the trustee certifies or the applicant can clearly demonstrate that interim payment would not prejudice any party having a higher or equal priority or claim to the funds. (2) [A] The court may, on its own motion or at the request of a party in interest, order that a percentage of the fees requested in an interim application that are found to be reasonable will not be disbursed at the time of approval of the interim application but will instead be held back pending the court's action on a final fee application. [B] The amounts held back — (i) may be applied for as part of the final fee application, but (ii) may not be placed in escrow. [C] Any payment allowed as part of the final fee award will depend, among other factors, upon the assets available for payment at that time.

(e) Pre-Petition Retainers.

(1) In all cases in which court approval of the payment of professional fees is required, a pre-petition retainer is considered property of the estate being administered, and: [A] must be segregated in a separate trust account; and [B] may not be applied to fees or costs incurred after the filing of the petition without an order of the court.

(2) A professional holding a pre-petition retainer must, in conjunction with the fee application, give notice that the professional intends to apply the retainer to post-petition fees and disbursements. [A] A retainer may not be applied without a court order approving an application for interim or final compensation. [B] The court may review the amount and circumstances of any retainer and may order a refund to the estate or other action as appropriate.

(f) Objections.

(1) A written objection to the allowance of fees must be filed with the court within the time set forth in the notice.

(2) A copy of the objection is to be transmitted to the United States trustee; and (3) served on— [A] the applicant, [B] trustee, [C] debtor, and [D] any committee appointed under the Code.

(g) Time of Payment. Unless otherwise ordered by the court, all administrative expenses allowed by the court will be paid by the trustee with the final distribution, or upon confirmation of a plan in a case under chapters 9, 11 or 12.

(h) Applications in Chapter 12 and 13 Cases. (1) [A] The trustee may, without any personal liability to debtor or debtor's attorney, pay creditors and trustee's fees in advance of paying the administrative expense for debtor's attorney's compensation claim, if the debtor's attorney claiming compensation has not filed an application for compensation. [B] When the trustee is served with notice of debtor's attorney's compensation application, the trustee must defer paying a lower priority creditor under § 1226(b)1) or § 1326(b)(1) of the Code until the court has ruled on the fee application. (2) [A] In chapter 12 cases, notwithstanding a provision for allowance of administrative claims in any confirmed chapter 13 plan, debtor's attorney's fees must be applied for before allowance. [B] Attorney's fees for a chapter 12 debtor will not be allowed in excess of the amount designated in the chapter 12 plan absent a showing of extreme or unusual circumstances.

(3) In a case under chapter 13, the fees and expenses set forth in paragraph 3(c) of AK LBF 5 (the chapter 13 plan) are deemed approved on confirmation, and no separate application for allowance is required, provided: [A] in consumer (non-business) cases, the total fees and costs to be paid, including the application of any prepetition retainer paid and the chapter 13 filing fee, do not exceed $5,000.00; or [B] in business (non-consumer) cases, the total fees and costs to be paid, including the application of any prepetition retainer paid and the chapter 13 filing fee, do not exceed $6,500.00; and [C] (i) The provisions of this paragraph notwithstanding, if the proposed chapter 13 plan does not provide for payment of allowed claims in full, any party in interest, including the United States trustee, may, at any time prior to confirmation of the plan, object to allowance of fees under this paragraph by filing a written objection, serving a copy thereof on the debtor, counsel for the debtor and the trustee, with transmittal to the United States trustee.

(ii) In the event an objection is filed and served, an application for allowance of fees must be filed, noticed and approved before any payment thereof is made. [D] Attorneys compensated under the terms of this paragraph are not obligated to represent the debtor in any adversary proceeding arising in the case unless otherwise agreed to by the debtor and the attorney. [E] An attorney seeking payment of fees and costs in excess of those approved by confirmation of the chapter 13 plan must file a supplemental fee application containing an itemized statement of fees and costs.

(i) The supplemental fee application need be served only on the debtor and the chapter 13 trustee when the fees and/or costs sought, when combined with the fees and/or costs approved under the plan, exceed the amounts set forth in (h)(3)[A] and [B] by no more than $1,000.00.

(ii) Supplemental applications for fees and/or costs which, when combined with the fees and/or costs approved under the plan, exceed the amounts set forth in (h)(3)[A] and [B] by more than $1,000.00 must be served on the debtor, the chapter 13 trustee and the Matrix in accordance with Rule 2002(a)(6), Federal Rules of Bankruptcy Procedure.

(i) Applications in Chapter 7 Cases.

(1) Final applications for professional fees in chapter 7 cases must be filed and transmitted to the United States trustee not later than seven (7) days after the Trustee's Final Report Before Distribution is transmitted to the United States trustee.

(2) The provisions of paragraph (c)(3) notwithstanding, the final application may include an estimate for services to be rendered by the professional in connection with closing out the estate; provided, however, that: [A] the applicant must file with the court, serve on the trustee, and transmit to the United States trustee, a statement of the actual fees incurred; and [B] no allowance for fees for professional services rendered after the date the final application is filed in excess of $500.00 will be allowed without substantiation as provided in paragraph (c)(3).

(3) Notwithstanding any other provision in these Rules, in the event of an objection to the Trustee's Final Report Before Distribution, other than an objection to the fee application, the court may allow payment of fees in an amount greater than the amount set forth in the Trustee's Final Report Before Distribution.