Local Rule Rule 2016-2: Interim Payment of Fees

Rule 2016-2 Interim Payment of Fees

(a) Motion for Interim Fee Payments. In a chapter 11 case, for cause shown, any professional appointed under § 327 or any official committee may move for an order authorizing interim payments of fees and expenses pending a formal fee application. A motion seeking interim payment of fees or expenses pending a formal fee application must address the following factors and any other relevant factors: (1) whether a large amount of fees will accrue each month; (2) whether a failure to allow interim payments would cause an undue hardship; and (3) whether the professional or committee will be able to disgorge the interim payments if required. In determining whether to permit an interim fee procedure, the court will consider all the facts and circumstances.

(b) Interim Fee Procedure. When the court enters an order granting a motion for interim fee payments to a professional or committee: (1) that professional or committee may file an itemized monthly fee and expense statement in compliance with the provisions of these Local Rules and, when applicable, the United States Trustee Fee Guidelines, setting forth in detail the fees and expenses for which payment is sought for the preceding month, and must serve a copy of the statement on the debtor and such additional parties as the court may designate and file a certificate of service; (2) each statement must include, as an exhibit, records that itemize services and expenses in conformity with the Federal Rules of Bankruptcy Procedure, these Local Rules and the United States Trustee Fee Guidelines; (3) the deadline to file an objection to the interim fee statement is 14 days from the date of service of the interim statement. If no objection is timely filed, the debtor is authorized to pay in the ordinary course of business: (A) 80% of the professional fees; (B) 100% of the expenses incurred by the professional; and (C) 100% of the expenses incurred by committee members. The 20% professional fee hold back will be paid only in accordance with the Federal Rules of Bankruptcy Procedure, Local Rule 2016-1 and the Bankruptcy Code sections governing the award of fees; (4) any objection to any interim statement must be filed and served on the affected professional or committee. The objection must specify in detail the nature and basis of the objection and the amount not disputed. Pending resolution of the objection, the debtor is authorized to pay the professional or committee the amount requested in the particular monthly statement less the greater of: (A) the amount in dispute, or (B) the professional fee hold back provided in subpart (3) above. The parties must endeavor to resolve any objection within 5 days. If a resolution is not achieved, the professional or committee may request a hearing; and (5) the failure of any party to object to an interim fee statement within the objection period does not constitute a waiver of the right to object to any interim or final fee application filed by any professional or committee or preclude any disgorgement of fees or expenses paid.

(c) Interim Fee Applications Required. If the court permits interim fee payments under this rule, the professional must file interim fee applications every 120 days under § 331 and committee members must file requests for allowance of administrative expenses every 120 days under § 503(b)(3)(F).