Can This Possibly Be Ethical or Permissible?
On May 18, 2016, the U.S. Bankruptcy Court for the Northern District of Texas issued a 51-page opinion resolving its Order Setting Show Cause Hearing (the “show cause order”) in the chapter 13 case of Netoche Brigham Fair (the debtor, or “Ms. Fair”). In this remarkable opinion, the bankruptcy court rendered a decision about the propriety (or lack thereof) of debtor’s counsel’s practice of (1) using clients’ debit card accounts for the purpose of making chapter 13 plan payments and (2) payment of counsel’s fees by a local car dealer, New Start Auto, with whom counsel had established a referral arrangement. The opinion is directed toward both Ms. Fair’s counsel, as well as the law firm that her counsel shared with another practitioner. Ms. Fair’s counsel and the law firm are referenced in this article as “debtor’s counsel” or “counsel.”
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No Surprise: A Court Can and WILL Significantly Reduce “Exaggerated” and “Overstated” Attorneys’ Fees
On March 25, 2015, the U.S. Bankruptcy Court for the Southern District of Florida entered an order to reduce a chapter 13 debtor’s attorney’s fee application by more than 70 percent. The order provides a detailed analysis of the Court’s review of the limited case law on fee awards in Chapter 13 cases, as well as an in depth explanation by the Court of the basis for the fee reduction and ultimate award in the case before it. The Order also contains strong words for the fee applicant regarding his application and billing practices.
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