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jurisdiction over the fee application, as appeal was not even tangentially related to provisions of plan and confirmation order regarding compensation and administrative claims. Further terms of Chapter 11 plan and confirmation order barred unsecured creditors committee's post- confirmation application for counsel fees. Although both plan and confirmation order provided for the continued existence of the committee past plan's effective date for the purpose of pursuing professional fee claims, substantial contribution claims, and appeals of the confirmation order, the confirmation order set express claims bar dates for "administrative claims," which included the fee application, and such bar dates had passed long before committee filed its fee application.
vii. In re Grasso, 506 B.R. 626 (Bankr. E.D. Pa. 2014).
Issue: In case converted from Chapter 11 to Chapter 7, counsel for debtor filed second interim and final fee application, seeking compensation of $69,468.75 and reimbursement of expenses of $566.56 for services rendered prior to court's appointment of Chapter 11 trustee.
Holding: In case of individual debtor converted from Chapter 11 to Chapter 7, counsel, as the primary attorney from the firm representing debtor, ceased to remain "disinterested" when, in connection with debtor's purchase of creditor's claim at discount, counsel represented debtor's personal interests to the exclusion of the collective interests of debtor's estate. Bankruptcy counsel's failure to disclose and overt participation in his client's misconduct, in using estate funds to purchase creditor's claim at discount, constituted an egregious failure to abide by his fiduciary obligations to the estate and warranted the complete denial of his fee applications, including disgorgement of any payments previously received; debtor, in purchasing the claim, acted with the direct and affirmative assistance of counsel, who failed to take action to prevent his client's misconduct and then, aggravating matters further, took purposeful action to obscure their involvement in the transaction.
viii. In re GSC Group, Inc., 502 B.R. 673 (Bankr. S.D.N.Y. 2013)
Issue: United States Trustee filed motion for vacatur of retention orders and disgorgement of professional fees based, inter alia, on violations of fee-splitting proscription and of disclosure rules by financial advisor that represented debtors in jointly administered Chapter 11 cases and related misconduct by debtors' attorneys.
Holdings: The Bankruptcy Court, Shelley C. Chapman, J., held that: (1) individual who had worked for more than five years for financial advisory firm, albeit as independent contractor rather than as employee, qualified as "regular associate" of firm, with whom firm was authorized to share fees; (2) Prohibition against splitting of fees in bankruptcy applies to trustees, ombudsmen, examiners, attorneys, accountants, and other professional persons compensated pursuant to bankruptcy statute, as well as attorneys and accountants of entities seeking reimbursement under administrative expense provision. Size of financial advisory firm retained to represent Chapter
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