How Debtors Are Fighting The Ch. 11 Fee Increase

Law360 (August 7, 2019, 11:36 AM EDT) -- In 2018, an amendment enacted by Congress dramatically increased the quarterly fees imposed by the U.S. Trustee Program and the Bankruptcy Administrator Program on Chapter 11 debtors and trustees. The sharp fee increases blindsided many debtors and ignited a pitched debate over their constitutionality and legitimacy.

Two bankruptcy courts have now ruled that the amended statute authorizing such increased fees is unconstitutional as applied to debtors whose cases were filed prior to the effective date of the amendment. Those decisions are In re Buffets LLC[1] and In re Circuit City Stores.[2] Unfortunately, the rulings provide no solace for Chapter 11 debtors...

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