In re Cryptek Inc.
Dec
21
2010
Ruling
Debtor's law firm ordered to disgorge prepetition fees paid by debtor in possession postpetition without bankruptcy court authorization.
Procedural posture
After a case was converted from Chapter 11 to Chapter 7, the Chapter 7 trustee and administrative expense claimants filed a motion to require the law firm that represented the debtor-in-possession to disgorge about $35,000 of the nearly $163,000 in approved fees and expenses that were paid to it. The trustee claimed that disgorgement was necessary to achieve equality of distribution among the Chapter 11 administrative claimants.
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Court
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