(U.S. Sup. Ct. June 15, 2015)
The Supreme Court holds that professionals employed by trustees may not be compensated for time spent defending their fee applications in court. Because 11 U.S.C. § 330(a)(1) provides that professionals may be compensated for “actual, necessary services rendered,” the Court concludes that compensation for work defending a fee application is not authorized. The Court reasons that such work is not an actual and necessary service for the estate, and thus the “American Rule”—that each litigant pays his or her own attorney’s fees unless a statute or contract provides otherwise—should not be altered. Opinion below.
Author: Matt Lindblom