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L.B.R. 2016-3. Compensation of Chapter 13 Debtor’s Attorney

(a)  Presumptively Reasonable Fee Application.

(1)  Eligibility.  To be eligible to use the Presumptively Reasonable Fee Application (the “PRFA”) procedure, the applicant must request a fee that is at or below the presumptively reasonable fee (the “PRF”) amount provided in the General Procedure Order titled, “In the Matter of Chapter 13 Fee,” as amended from time to time.  The applicant must provide all reasonably necessary and appropriate services during the pendency of the entire case.

(2)  Presumptively Reasonable Fee.  To the extent provided for in the chapter 13 plan, the PRF, or lesser amount if requested by the plan, is to be paid by the trustee upon confirmation of the plan, to the extent funds are available after payment of the applicable trustee fee.  The chapter 13 trustee may recommend or the Court may determine, in appropriate cases, that a lower fee be allowed.   

(3)  Form of Application.  Applications for allowance of fees and reimbursement of expenses pursuant to the PRFA procedure must be made using the checkbox on the chapter 13 plan, L.B.F. 3015-1.1.  Applicant need not supplement L.B.F. 3015-1.1, except upon formal objection, written request of the debtor, or order by the Court.

(4)  Extraordinary Costs.  If a case has costs in excess of the amount provided for in the General Procedure Order published by the Clerk, In the Matter of Procedures for Fee Applications in Chapter 13 Cases, as amended from time to time, an attorney may file a Supplemental Fee Application using L.B.F. 2016‐3.5 and appropriate supplementary documentation.

(5)  Post‐Confirmation Fees.  Election of the PRF or any lesser fee does not preclude an attorney from filing a Supplemental Fee Application for post‐confirmation work.  Electing the PRF does not preclude an attorney from providing for a greater amount in the plan.

(6)  Order.  The chapter 13 confirmation order will serve as the order approving the payment of the PRF, or lesser amount requested.  

(b)  Long Form Fee Application.

(1)  Eligibility.  If the applicant requests allowance of a fee in excess of the PRF amount, the attorney may not use the PRFA procedure and must use the Long Form Fee Application (the “LFFA”) procedure in addition to compliance with L.B.R. 2016-1(a)(2)(C)(i) and (ii).  The applicant must provide all reasonably necessary and appropriate services during the pendency of the entire case.

(2)  Form of Applications.  Applications for allowance of fees and reimbursement of expenses pursuant to the LFFA procedure must be made using L.B.F. 2016-3.1, and must be supplemented by the attachments outlined in L.B.F. 2016-3.1.

(3)  Service, Notice, and Objections.  Debtor’s attorney must serve a copy of the LFFA, L.B.F. 2016-3.1, along with a notice in substantial conformity with L.B.F. 2016-3.2, on the chapter 13 trustee, the debtor, and any parties requesting notice.  Prior to the deadline to file a proof of claim, the notice, without the LFFA form, must be served on all other creditors, claimants, and parties in interest.  If the claims deadline has passed, the notice, without the LFFA form, must be served on claimants.  Parties will have 21 days from service of the notice within which to file an objection.

(4)  Timing.  Fee applications under the LFFA must be filed no sooner than the date of entry of the order confirming the chapter 13 plan and no later than 28 days after the date of entry of the order confirming the chapter 13 plan.

(5)  Order.  The attorney must submit a form of order in substantial conformity with L.B.F. 2016-3.3, listing the specific amount of fees and expenses requested, the amount received outside of the plan or previously paid, and the amount payable from plan payments.

(c)   Supplemental Form Fee Application.

(1)  Eligibility.  If the applicant provides services post-confirmation and requests allowance of a supplemental fee for post-confirmation services, the applicant must use the Supplemental Form Fee Application (the “SUPFFA”) procedure in addition to compliance with L.B.R. 2016-1(a)(2)(C)(i) and (ii).

(2)  Form of Applications.  Applications for allowance of fees and reimbursement of expenses pursuant to the SUPFFA procedure must be made using L.B.F. 2016-3.4, and must be supplemented by the attachments outlined in L.B.F. 2016-3.4.

(3)  Service, Notice, and Objections.  Debtor’s attorney must serve a copy of the SUPFFA, L.B.F. 2016-3.4, along with a notice in substantial conformity with L.B.F. 2016-3.2, on the chapter 13 trustee, the debtor and those parties requesting notice.  Prior to the deadline to file a proof of claim, the notice, without the SUPFFA form, must be served on all other creditors, claimants, and parties in interest.  If the claims deadline has passed, the notice, without the SUPFFA form, must be served on claimants.  Parties will have 21 days from service of the notice to file an objection.

(4)  Timing.  Fee applications under SUPFFA may not be filed until after entry of an order approving an application under either the PRFA procedure or the LFFA procedure, and no later than the date the chapter 13 trustee files a final report.

(5)  Order.  The attorney must submit a form of order in substantial conformity with L.B.F. 2016-3.5, listing the specific amount of post-confirmation fees and expenses requested, the amount previously approved by the Court, the amount received outside of the plan or previously paid, and the amount payable from plan payments.

(d)  Hearing.  If the applicant elects the PRFA procedure through a chapter 13 plan, any objection will be considered through the confirmation process.  For all other types of fee applications, if no objection is filed, the Court may allow the requested fee in full or in part, upon the filing of a Certificate of Non-contested Matter in substantial conformity with L.B.F. 9013-1.3, or may order further supplementation or set the application for hearing.  If an objection is filed, the applicant is responsible for filing a Certificate of Contested Matter and Request for Hearing in substantial conformity with L.B.F. 9013-1.4.  Upon the filing of the Certificate of Contested Matter, the Court may set the matter for hearing.

 

Commentary

 

The PRFA and LFFA procedures establish the time frame and process within which an applicant must apply initially for approval of chapter 13 fees and reimbursement of expenses.  However, regardless of whether the applicant utilizes the PRFA or LFFA procedures, the prohibitions against and restrictions on limited representation contained in L.B.R. 9010-1 require that the engagement does not terminate at plan confirmation.  Rather, representation must last through the earlier of entry of discharge, or the conversion or dismissal of the case unless the attorney is permitted to withdraw in accordance with L.B.R. 9010-4.

 

The PRFA procedure is for requesting fees and is not intended to limit the scope of chapter 13 engagements.  When requesting fees using the PRFA procedure, attorneys are not required to submit their engagement letter or other fee agreement, detailed time slips, or a narrative unless requested by the trustee or otherwise ordered by the Court.  However, attorneys are advised that if their fees are questioned, it may be quite difficult to prevail without the assistance of some or all of those items.  Although the PRFA process does not limit the ability of debtor’s attorney to seek additional fees post-confirmation, certain routine post-confirmation services are expected to be rendered by applicant as part of the PRF.  For example, in most cases, such routine post-confirmation services will include reviewing claims after the expiration of the claims date; advising on the requirement that the debtor complete a financial management course; communicating with the debtor, creditors and other parties in interest concerning the case; defending a motion for relief from stay or motion to dismiss; and, completing the debtor's certification for discharge.  However, generally, prosecuting or defending against a motion for a plan modification would not be considered a routine post-confirmation service.

 

The LFFA procedure is intended to be a fee-for-service arrangement where it is anticipated that total attorney fees for the case will exceed the PRF amount.  The SUPFFA procedure completes payment for post-confirmation services reasonably necessary and appropriate for the engagement.  The Court will entertain supplemental fee applications that comply with the SUPFFA procedure, supported by time records, for post-confirmation services.  Like the LFFA, applications under the SUPFFA must be supplemented by the same attachments.