In re Wilson

(7th Cir. Aug. 10, 2015)

The Seventh Circuit affirms the bankruptcy court’s approval of the Chapter 7 trustee’s fee. The principal unsecured creditor objected to the fee because it was based on a distributed amount that included the proceeds of the sale of the debtors’ home that paid off secured claims of mortgagees. The creditor claimed the amount of the proceeds should be deducted because the mortgagees did not have to participate in the bankruptcy to enforce their secured claims. The court finds that it was appropriate to include that amount when calculating the maximum fee under 11 U.S.C. § 326(a), and the trustee’s fee was under that maximum fee. Opinion below.

2015-08-10 – in re wilson

Author: Matt Lindblom

Reisz v. Crocker

(W.D. Ky. Dec. 23, 2014)

The district court affirms the bankruptcy court’s order setting the Chapter 7 trustee’s commission at an amount lower than the § 326 statutory rate. The trustee sold collateral property with a $50,000 carveout for unsecured creditors. However, after the debtor’s homestead exemption and bankruptcy estate taxes were paid, only about $22,000 of the carveout remained. The trustee requested the remainder as a commission, as it was less than the statutory commission. The United States Trustee objected and requested the commission be set at $5,000, and the bankruptcy court entered its order with the lower amount. The trustee appealed, arguing the statutory rate was a reasonable commission. The district court affirmed, noting that the trustee should not have conducted the sale if there would be no benefit to unsecured creditors. The court held that the circumstances warranted a commission lower than the statutory rate. Opinion below.

2014-12-23 – reisz v crocker