Compensation For Professionals
The Bankruptcy Code provides the statutory authority for compensating the services and reimbursing the expenses of officers of the estate. These claims are afforded first priority in the distribution of an estate. The Bankruptcy Code prescribes the standards according to which the amount of compensation is to be determined.
The only procedural requirement is that an award of compensation be preceded by notice to any parties in interest and to the United States Trustee and by a hearing. Reimbursement of officers of the estate for their actual and necessary expenses is allowed. ”Officers of the estate” include trustees, examiners, attorneys and other professional persons employed by a trustee or examiner; attorneys and other professional persons employed by official creditors’ committees and equity security holders’ committees; and any paraprofessional employed by them.
An application for compensation must contain a detailed statement of services rendered, time expended and expenses incurred. In determining reasonable compensation for a professional person employed by the debtor’s estate, the trustee or a creditor’s committee, the court must consider whether the person is board certified or otherwise has demonstrated skill and experience in the bankruptcy field. In addition to the provisions of the Bankruptcy Code, local rules and fee guidelines may regulate the submission of fee applications and the content of applications.
Professionals are required to make a reasonable effort to submit meaningful billing records from which the court and other interested parties can make an informed decision regarding the nature, reasonableness and value of the services rendered by the professional. The level of detail required in a fee application may vary according to the professional. Not all professionals are employed throughout the debtor’s case, and many serve only for a limited purpose. Their applications do not require the degree of detail that must be submitted by an attorney working for the debtor on a daily basis in many different matters.