In re Sweports, Ltd.

(7th Cir. Jan. 9, 2015)

The Seventh Circuit reverses the bankruptcy court’s decision declining to award fees to the attorney for the unsecured creditors committee. The bankruptcy court dismissed the chapter 11 prior to reorganization. The attorney then sought an order from the bankruptcy court holding the debtor liable for the attorney fees. The bankruptcy court declined to enter the order, reasoning that it could no longer grant the relief because the case had been dismissed and there were no assets in the bankruptcy estate. The Seventh Circuit holds that the bankruptcy court does have jurisdiction to resolve this issue and that it should have entered the order holding the debtor liable for the fees. The attorney could then enforce the order through other legal proceedings. Opinion below.

2015-01-09 – in re sweports

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