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Vol 13, Num 6 l 2015 in Review

Ethics and Professional Compensation

► In This Issue:

2015 in Review: A Note from Your Co-chairs


John W. Weiss
Alston & Bird LLP
New York


Kenneth Pasquale
Stroock & Stroock & Lavan LLP
New York

During 2015, the Ethics & Professional Compensation Committee offered three opportunities for ABI members to learn about timely and interesting ethical and compensation issues facing professionals in the bankruptcy arena.  At the Annual Spring Meeting, we paired with the Bankruptcy Litigation Committee to explore the inner-workings of “Trustee Selection in Commercial Bankruptcy Cases:  Who Wins the Battle to Control the Estate.”  The panel was moderated by Eve H. Karasik  (Levene, Neale, Bender, Yoo & Brill; Los Angeles, CA) and consisted of Ramona D. Elliott (Executive Office for U.S. Trustees; Washington D.C.); Edward T. Gavin  (Gavin/Solmonese LLC; Wilmington DE) and James A. Lodoen  (Lindquist & Vennum LLP; Minneapolis, MN).

On July 8 of this year, our committee sponsored a webinar entitled “Recommendations on Professional Fees and Expenses,” which focused upon proposed reforms recommended by the ABI Commission To Study The Reform of Chapter 11.  The webinar was presented by William A. Brandt, Jr. (Development Specialists, Inc.; New York), James T. Markus (Markus Williams Young & Zimmerman, LLC; Denver CO), Walter W. Theus, Jr. (Executive Office for U.S. Trustees; Columbia, S.C.) and Deborah D. Williamson (Dykema Cox Smith; San Antonio, TX). 

For the recent Winter Leadership Conference, we joined with the Mediation Committee in presenting a panel entitled “Ethical Issues in Professional Fee Disputes: Mediation vs. Litigation.”  The panel will be comprised of the Hon. Pamela Pepper (U.S. District Court, E.D. Wis. (Milwaukee WI)); Ramona D. Elliott (Executive Office for U.S. Trustees; Washington D.C.); Robert M. Fishman (Shaw Fishman Glantz & Towbin LLC; Chicago IL) and Catherine L. Steege (Jenner & Block; Chicago IL). » Read More

Ninth Circuit Strikes Down Sanction Award, Limiting Awards under Local Rules


Candace Carlyon
Morris, Polich & Purdy, LLC
Las Vegas

In Pham v. Golden, the Ninth Circuit Bankruptcy Appellate Panel (BAP) reversed an award of sanctions against the debtors and their counsel for discovery abuses in an adversary in which the debtors were not parties. In doing so, the court limited or invalidated several local rules that provided the basis for the bankruptcy court’s award of sanctions.

The case involved the trustee’s efforts to recover four properties conveyed to defendants Phat The Bui and Thuan Tran. The debtors were not parties to the fraudulent transfer adversary, but both were subpoenaed as witnesses pursuant to Fed. R. Civ. P. 45 (Fed. R. Bankr. P. 9016), commanding them to appear for depositions and to produce documents.
 » Read More

Debtor’s Bad Conduct Is Grounds for Denial of a Fee Waiver


Sean Markham
Markham Law Firm, LLC
Charleston, S.C.

A recent decision from the U.S. Bankruptcy Court for the Eastern District of California confirms what many bankruptcy attorneys have long suspected: A debtor’s bad conduct in bankruptcy may serve to defeat a fee waiver for a debtor who otherwise qualifies under the income guidelines. In In re Gjerde, the debtor, Sean Patrick Gjerde, was a disbarred bankruptcy attorney who filed several pro se chapter 7 cases. In his first four pro se filings, Gjerde failed to pay all of the required installment fees and failed to appear at any of the first meetings of creditors. 
» Read More

GAO Studies Practices on Large Chapter 11 Case Professional Fee Billings and Venue Selection


Marta Alfonso
Morrison, Brown, Argiz &
Farra, LLC

Under 11 U.S.C. § 330(a)(3)(F), professionals seeking payment from a bankruptcy estate must be compensated using reasonable rates and fees charged by comparably skilled professionals in nonbankruptcy cases. Prompted by the size of the professional fees in large chapter 11 filings, the General Accounting Office (GAO) was asked by the U.S. Senate Judiciary Committee to evaluate whether bankruptcy professionals billed higher fees for large chapter 11 cases, and if the venue-selection process was used by professionals to file in bankruptcy courts where higher fees could be awarded.
» Read More

Sabatini Frozen LLC v. Weinberg, Gross, & Pergament LLP: A Cautionary Tale


Roger J. Higgins
The Law Offices of Roger
Higgins, LLC

The recent decision in Sabatini Frozen LLC v. Weinberg, Gross, & Pergament LLP is a tale of a failure of corporate governance of a closely-held corporation, coupled with the failure of debtor’s counsel to adequately address that matter. The decision also illustrates the real limitations on a “wronged” creditor’s recourse against debtor’s counsel for counsel’s conduct during a bankruptcy case.

Acme Cake Co. was a small wholesale manufacturer of baked goods whose stock was held in equal shares by two married couples, Thomas and Patricia Semon and William and Debra Wenzel (William and Patricia were siblings). William was Acme’s president, and his brother-in-law, Thomas, was its secretary. 
» Read More

Have You Watched a Complimentary Eye on Bankruptcy Session?

Launched in spring 2015, “Eye on Bankruptcy” is an online series produced by Bloomberg Law and ABI. Each program is aired on the last Thursday of each month and provides analysis of the latest case developments. Recorded at either Bloomberg’s New York studio or ABI's Virginia headquarters, each episode features commentary by top practitioners, academics and judges, hosted by Professor Michelle Harner (University of Maryland Francis King Carey School of Law).

Each episode explores:

  • Recent filings, motions, and decisions
  • Revisions to bankruptcy rules and forms
  • Changes in bankruptcy and restructuring

Visit online to learn more and view past recordings.

You Spoke, We Listened: ABI Offers an Upgraded Communications Schedule

This fall you should have noticed a change in the look, feel and frequency of communications that you are receiving from ABI. In an effort to cut down on the number of emails in your inbox, ABI launched a new weekly schedule that still includes the popular Daily Headlines and Bankruptcy Brief (reduced to Thursday afternoon, only).

New weekly highlights include:

Tuesday's delivery is the InSights newsletter, which highlights important information and benefits that you receive as an ABI member. Membership InSights will offer helpful tips about new ABI technology and benefits that will save time and money for your practice. Need to know what summaries were posted to Volo last week? Turn to next Tuesday's issue of Membership InSights for your answer.

Wednesday's InTouch newsletter provides you with upcoming programs specific to your circuit, as well as national programs that may be of interest to you. InTouch will also highlight online CLE and ABI publications designed to bring you quality information on the topics you care about most.

ABI would love to hear what you think about our new communication plan. Please contact us at

Registration for the
2016 Annual Spring Meeting
is now live! Mark this one off your list
before you even need to make
a new year's resolution list,
and we'll see you in D.C.!


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