Local Rule 2016-2: CHAPTER 11-GENERAL

2016-2 CHAPTER 11-GENERAL Absent specific authorization from the court, no compensation or other remuneration shall be paid, from assets of the estate, to any present or former insider, affiliate, officer, director, or equity-security holder as set forth in 11 U.S.C. § 101. All applications for compensation under this rule shall be accompanied by a sworn disclosure, by the applicant, of all previous compensation, from any source, for services related to the debtor's proceeding. Further, all applications under this rule shall conform to the following sub-sections, where and as applicable:

A. The Bankruptcy Court may authorize compensation, commensurate with prepetition salaries, to a director or an officer, other than one who is also an "equity security holder," "affiliate," or "insider," as defined in Section 101 of the Bankruptcy Code, upon ex parte application, provided that written notice of the authorizing order shall be served in conformity with Local Bankruptcy Rule 4001-1(C), and upon such other parties as the court may direct. The notice of the order shall state that objections to the order may be filed, and a hearing conducted, if and only if an application to discontinue such compensation, with a request for hearing, is timely filed.

An ex parte application under this sub-section shall include a sworn declaration that the applicant is neither an "affiliate," nor an "insider," nor an "equity security holder" as those terms are defined in § 101 of the Bankruptcy Code.

B. The court may authorize compensation for equity-security holders, insiders, or affiliates, under circumstances considered reasonable by the court, upon ex parte application provided that a hearing to confirm or revoke such authorization shall be conducted after written notice of the order is served and a hearing scheduled in accordance with Local Bankruptcy Rule 9013-3.

C. If an application filed under sub-section A or B of this rule is denied by the court, the applicant may refile the application with a request for a hearing, in conformity with Local Bankruptcy Rule 9013-3 and upon twenty-one (21) days notice. After the hearing, the court may approve the application for good cause shown.

D. Any application under this rule approved by the court under sub-section A, B or C, may be terminated for good cause on motion of the U.S. Trustee or other party in interest after notice and a hearing.

E. In determining "good cause" under section D of this rule, the court will consider the following non-exclusive list of factors: 1. Whether the monthly reports required under Local Bankruptcy Rule 2015-2 reflect that the debtor is operating continuously at a deficit; 2. Whether or not monthly reports have been timely filed during the bankruptcy case; 3. The likelihood of a successful rehabilitation; 4. The debtor's prepetition history, including evidence of seasonal variations in economic performance; 5. Any other factors the court deems relevant to the inquiry.