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§ 726(b)

Montilla, In re

Ruling
Fees of Chapter 13 counsel allowed as an administrative expense claim after conversion toChapter 7. (Bankr. N.D. Ill.)
Issue(s)
Distribution of Property of the Estate; Pro Rata Payment within a Particular Class.

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Consumer opinion summary, case decided on October 12, 2022 , LexisNexis #0123-017

NETtel Corp., In re

Ruling
Trustee and his law firm were could not lower required disgorgement where they had failed tomake clear that all professionals would be subject to disgorgement to the extent necessary toachieve a pro rata distribution. (Bankr. D.D.C.)
Issue(s)
Distribution of Property of the Estate; Pro Rata Payment within a Particular Class.

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Judge or Jurisdiction information not available
Commercial opinion summary, case decided on April 28, 2020 , LexisNexis #0620-068

Omega Natchiq Inc. v. ATP Infrastructure Partners LP (In re ATP Oil & Gas Corp.)

Ruling
Deferral of creditor's privileged claim granted in favor of resolution in district court under the first to file rule.
Issue(s)
Was creditor entitled to a recognition and enforcement of its alleged privilege on debtor's floating hydrocarbon production facility?

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Commercial opinion summary, case decided on March 15, 2016 , LexisNexis #0416-061

In re Millwork Specialties Inc.

Ruling
General manager and president allowed administrative expense claim for postpetition wages to the extent work was necessary for operation of debtor's business.
Procedural posture

Creditor applied for the allowance and payment of an administrative expense, in the form of wages for his postpetition work on behalf of the debtor. The chapter 7 trustee argued the application should be denied because creditor's foregoing wages was akin to a capital contribution because creditor held a membership interest in the debtor, and so was not entitled to administrative priority.

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Commercial opinion summary, case decided on May 04, 2012 , LexisNexis #0612-027

In re Mobile Team LLC

Ruling
Debtor's counsel could withdraw balance of prepetition retainer in accordance with court- approved retention application despite insolvency of estate.
Procedural posture

In a converted case, a chapter 7 trustee filed motion to require the debtor's counsel to disgorge the retainer paid by debtor to his counsel prior to the filing of debtor's chapter 11 petition. Counsel opposed the motion and requested that the court to allow it to draw on the balance of its pre-petition retainer.

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Commercial opinion summary, case decided on January 10, 2011 , LexisNexis #0211-093

In re Cryptek Inc.

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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Commercial opinion summary, case decided on December 21, 2010 , LexisNexis #0111-131

In re Shihai

Ruling
Fee application of debtor's pre-conversion counsel treated as interim application pending full administration.
Procedural posture

Counsel for the debtors filed a first and final application for fees and expenses. The United States Trustee and chapter 7 trustee opposed the application.

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Consumer opinion summary, case decided on August 18, 2008 , LexisNexis #0908-009

In re Patterson

Ruling
Debtor's attorney's prepetition retainer was subject to disgorgement.
Procedural posture

After an attorney for a chapter 11 debtor withdrew and the case was converted to a chapter 7 case, the attorney filed an application for compensation, seeking permission to apply a prepetition retainer paid to her in partial satisfaction of her fees, with the balance due to be paid by the debtor if not paid pursuant to 11 U.S.C.S. § 726(b) at the close of the case. Both the chapter 7 trustee and the U.S. Trustee objected.

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Consumer opinion summary, case decided on January 15, 2008 , LexisNexis #0508-017

Fokkena v. Fredrickson & Byron PA (In re Hyman Freightways Inc.)

Ruling
Bankruptcy court properly refused to order disgorgement of interim professional fees in converted case.
Procedural posture

The United States Trustee appealed a decision of the bankruptcy court, which denied the trustee's motion for a refund of professional fees.

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opinion summary, case decided on December 20, 2006 , LexisNexis #0207-030

In re St. Joseph Cleaners

Ruling
Chapter 7 trustee's motion for disgorgement of portion of chapter 11 counsel's retainer paid prior to conversion was denied since confirmed plan payments were final.
Procedural posture

A bankruptcy debtor's chapter 11 case was converted to chapter 7 and the chapter 11 counsel for the debtor received an award of fees which included the balance of the prepetition retainer paid by the debtor. The chapter 7 trustee subsequently discovered that the debtor's estate had insufficient funds to pay the chapter 11 administrative claims, and the trustee moved for disgorgement of a portion of counsel's retainer.

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opinion summary, case decided on July 12, 2006 , LexisNexis #0806-064