In re Dick Cepek Inc.
Mar
21
2006
Ruling
Disgorgement order was vacated, and case was remanded to determine if law firm had a security interest in its retainer such that it would not be subject to disgorgement following conversion of a case to chapter 7 for distribution among unsecured administr
Procedural posture
With court approval, a bankruptcy debtor paid a retainer to appellant law firm for representation in chapter 11 proceedings, and appellee bankruptcy trustee sought disgorgement of the retainer under 11 U.S.C. § 726(b) after the case was converted to chapter 7. The law firm appealed the order of the Bankruptcy Court for the Central District of California which required disgorgement.
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