The Baker Botts V. Asarco Fallout Has Begun

Law360, New York (September 1, 2015, 12:49 PM EDT) -- When Congress passed the 1978 Bankruptcy Code to overhaul the then long-standing act of 1898,[1] it made clear, both in the legislative history and in multiple statutory provisions, that its intent was to attract and compensate fairly the "best and the brightest" professionals (lawyers, financial advisers and accountants) to represent debtors and creditors (and/or equity) committees in an effort to achieve the code's desire to facilitate rehabilitation of financially distressed debtors through equitable distribution principles. Unlike the typical two-party litigation dispute to which the American Rule applies, i.e., each party pays its own lawyers, the code, when considering its full relevant statutory provisions, appears to have abrogated such rule by (1) requiring the bankruptcy estate to pay the costs for official committees' and debtors' professionals, and (2) requiring the bankruptcy estate to pay costs (including legal fees) to oversecured creditors and certain others in accordance with prepetition agreements....

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