Dollar Cap on Committee Professional Fees Under Confirmed Plan [Delaware Business Court Insider]

Mark Felger, co-chair of Cozen O’Connor’s Bankruptcy, Insolvency & Restructuring Practice Group, and Barry Klayman, a member of the firm’s Bankruptcy, Insolvency & Restructuring Practice Group, discuss a case involving the effect of a debtor-in-possession (DIP) financing order cap on professional fees after a Chapter 11 plan is confirmed in the Delaware Business Court Insider. Mark and Barry explain that, “In In re Molycorp, U.S. Bankruptcy Judge Christopher S. Sontchi of the District of Delaware held that absent specific language in a debtor-in-possession financing order, a carve-out for a fixed dollar amount for professional fees does not serve as a cap on the amount of fees to which a professional may be entitled once a Chapter 11 plan is confirmed.” A significant aspect of the case is that the judge “expressly offered no opinion as to whether he would approve a DIP order containing a provision that professional fees in excess of a stated amount would not constitute allowed administrative expense claims in the event of a plan confirmation. That reservation leaves the question wide open in future cases.” 

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Mark E. Felger

Co-Chair, Bankruptcy, Insolvency & Restructuring

mfelger@cozen.com

(302) 295-2087

Barry M. Klayman

Member

bklayman@cozen.com

(302) 295-2035


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