Service to the Estate and Ethics:
Professionals
| ID | Name | Group | Other | Code
Sec |
Cross
Ref | Problem
Referenced | Proposed
Solutions |
NBRC-
0013 | James Gadsden | Practitioner; Carter,
Ledyard & Milburn writing on behalf of United States Trust Company
of New York |
| 503(b) |
|
| Amend § 503(b)(3) & (5)
in order to permit an indenture trustee to be compensated for their
activity in a bankruptcy case under a standard of "reasonable
compensation for necessary services" rather than the present
standard of "substantial contribution." *Statutory Language
Provided. |
NBRC-
0168 | Clarine Nardi Riddle | Senior VP Gov't
Affairs National Multi-Housing Council; Nat'l Apt.
Ass'n |
| 327 |
| Bankruptcy Mills encourage filings by persons who only wish to
retain possession of rental property post-petition without paying rent.
"Bankruptcy Mills" solicit residents who are facing eviction
proceedings. Bankruptcy Mills are now advertising over the
internet. | Legislation required addressing
problem of unlawful detainer debtors and the bankruptcy mills that file
bare bones plans. |
NBRC-
0203 | Amy M. Tonti, on behalf of the Allegheny Co. Bar Assoc.'s
Bankruptcy & Commericial Law Section | Chair, Allegheny County Bar Assoc. (ACBA), Bankruptcy and
Commerical Law Section | Summary of the ACBA's
recommendations | 328(c) |
| Counsel employed on an interim
basis should be compensated under § 328(c), as long as they can
establish that employment requirements were met. | Section 328(c) should be amended to authorize compensation of
interim counsel "upon a good faith effort to make full disclosure
and a good faith belief that employment requirements are met, despite
later disqualifications." |
NBRC-
0204 | A. Thomas DeWoskin | Attorney |
| 327 |
| Out-of-town professionals should not be paid more than the rate
paid to competent local professionals. Oftentimes, competent
professionals are available in the city where the debtor files, but
out-of-town professionals will be retained at twice the local rate
merely because they are acquainted with the hiring
entity. | Bankruptcy Code should be amended to
provide that out-of town professionals should be paid only a rate
comparable to their customary rates or local rates, whichever is less,
and should not be reimbursed for travel and long distance expenses.
Thus, the hiring entity could employ whichever professional it desires,
but creditors would be not be forced to "[foot] a large bill merely
because the Committee chair wanted to hire his buddy from another
city." |
NBRC-
0275 | Robert S. Apfelberg | Managing
Director, Commerce Partners (Financial Restructuring and Business
Reorganization) |
|
|
| Author suggests a number of areas of inquiry that effect
bankruptcy "service providers": use of trustees, court
officers and special masters to administer certain parts of bankruptcy
proceedings; increased use of stipulations; advance review of law clerk
and trustee "notes"; mandatory settlement conferences,
mediation and arbitration; fast-tracking certain issues; minimum
standards for professionals; increased level of legal protection for
Board members and senior operating management; voluntary review board;
and improved formats for Plan and Disclosure
Statements. | Author recommends that the NBRC
consider these issues. |
NBRC-
0323 | Cynthia A. Baker | Assistant Professor,
Emory University School of Law |
|
|
| The current system for
compensating professionals, which relies largely on after-the-fact
review by the court or the U.S. Trustee, is ineffective and costly.
Under this system, clients have little or no incentive to rein in their
professionals. The author attaches a copy of her article entitled
"Other People's Money: The Problem of Professional Fees in
Bankruptcy," which analyzes the flaws in the current system and
proposes solutions for reforming the fee system. The central flaw is
that chapter 11 permits committees and DIP's who are purchasing
professional services to spend other peoples'
money. | The bankruptcy system should be
reformed to realign costs and benefits, provide more information about
costs, and leave the primary decisions about the reasonableness of
professional costs to those parties who have an economic interest in the
case outcome. |
NBRC-
0400 | Andy Tela, Jr. | Chapter 7
debtor |
|
|
| Bankruptcy petition preparers provide an important and useful
service in the preparation of bankruptcy petitions. Their services are
cost-effective, accurate and efficient. | Bankruptcy petition preparers should be allowed to contiue
providing their services to debtors. |
NBRC-
0401 | Julie Sawyer | Chapter 7
debtor |
|
|
| Bankruptcy petition preparers provide an important and useful
service in the preparation of bankruptcy petitions. Their services are
cost-effective, accurate and efficient. | Bankruptcy petition preparers should be allowed to contiue
providing their services to debtors. |
NBRC-
0402 | Jeff Foust | Chapter 7
debtor |
|
|
| Bankruptcy petition preparers provide an important and useful
service in the preparation of bankruptcy petitions. Their services are
cost-effective, accurate and efficient. | Bankruptcy petition preparers should be allowed to contiue
providing their services to debtors. |
NBRC-
0511 | Richard G. Lugar | U.S.
Senator |
|
|
| Constituent of Senator Lugar (Larry Watson) wrote to complain of
actions by the U.S. Bankruptcy Trustee to enforce provisions of the
Bankruptcy Code relating to the assitance given to debtors by
non-attorneys. | Mr. Watson wants legislation
passed which will allow non-attorneys to continue to assist debtors in
filing bankruptcy. |
NBRC-
0555 | Frank Eichler | Private
citizen |
|
|
| "This is to let you know that I disagree with the new
regulations implemented under the Federal Bankruptcy Reform Act of 1994.
It is obviously just away [sic] to scare people away from preparing
petitions for people who cannot afford attorneys. The flat rate of fees
for petition preparers while not doing it for attorneys is completely
unfair." |
|
NBRC-
0681 | Susan A. Kaiser | President, National
Federation of Paralegal Associations, Inc. (NFPA) | Preliminary Comments by the National Federation of Paralegal
Associations to the National Bankruptcy Review
Commission | 110 |
| Author is forwarding the
Preliminary Comments of the NFPA in conjunction with Section 110 of the
Bankruptcy Code regarding Bankruptcy Petition Preparers. "NFPA
would like to begin a dialogue with the Commission to exchange
information and begin discussions concerning the activities of
Preparers." | "NFPA proposes that
you consider adding a paralegal to the appropriate Working Group to
specifically assist with the review and analysis of Section
110." |
NBRC-
0706 | Jerry Patchan | Director, Executive
Office for United States Trustees |
|
|
| One of the statutory duties of
the U.S. Trustee is to monitor employment applications filed under
Section 327 of the Bankruptcy Code and to comment on those applications
when appropriate. The U.S. Trustees are concerned about the proposal to
change the bright-line rule for disinterest by professionals. Author
outlines reasons why the current rule is good and should not be
changed. | The U.S. Trustees feel that the
existing law of disinterestedness sets a reasonable threshold standard
for all bankruptcy professionals and uphold the integrity of the system
in the public's eye and should not be changed. If, however, the
Commission remains convinced of the need for change in this area, the
U.S. Trustees would urge minimal clarifying changes over a total
redrafting of the statute. |
NBRC-
0712 | Daniel H. Brunner | Chapter 13 Trustee,
Eastern District of Washington |
| 327(a) |
| Although §327(a) speaks of
the trustee hiring professionals to pursue claims of the estate (e.g.
lawyers to pursue tort claims, etc.), the trustee under §1306 and
§1303 has neither custody nor control of the
assets. | It may be more appropriate to allow
the debtor to hire his or her own professionals. |
NBRC-
0892 | Robert W. Alberts | U.S. Bankruptcy
Judge, Central District of California |
|
|
| No
discussion. | "I also believe the
recently-enacted provisions of the Code respecting "bankruptcy
petition preparers" should be revised to require or provide for
licensure." |
NBRC-
0899 | Donald A. Manzullo | Member of
Congress, 16th District, Illinois | Copy of
letter from Frederic E. Rachford, Woodstock, Illinois to Rep. Donald A.
Manzullo dated 4/30/97; Copy of article entitled "Bar Abuses
Bankruptcy Reform Act". |
|
| Author is forwarding copy of letter from constituent asking that
laws allow for low cost paralegals to provide assistance to
banktupts. | "Please include these with
the rest of the public comments in preparation for the Nation Bankruptcy
Review Commission's report to Congress due in October as required by the
Bankruptcy Reform Act of 1994." |
NBRC-
1064 | Martha L. Davis | General Counsel,
Executive Office for United States Trustees |
| 110 |
| Author is forwarding a copy of a
survey of all U.S. Trustees to ascertain their activitiy in regard to
Section 110 and its application to bankruptcy petition
preparers. | n/a |
NBRC-
1130 | John Snavely | Absolutely
Paralegal |
|
|
| Author writes to complain about the treatment of bankruptcy
petition preparers. | Author believes that the
fees currently allowed for bankruptcy petition preparers is
unrealistically low in light of the work they do. "In practice, I
believe that a fee of at least two hundred dollars is reasonable."
"Preparation of bankruptcy papers is not equivalent to performing
brain surgery, as many attorneys would have you believe, but there
should be regulations and licensing of non-attorney practitioners in
order to make our legal system accessible and affordable to all and
ensure that the work is performed in a proper and timely manner. Such
regulation of non-attorney perparers, however, should be reasonable and
appropriate, not merely an effort to ensure the high incomes of the
legal profession." |
NBRC-
1137 | R.E. Campbell | Paralegal, Legal Clerk
I, Consumer Form Service |
|
|
| Author is a Bankruptcy Petition
Preparer. He is angered that he was fined for failing to provide his
name, address, social security number and signature, although the fine
was stayed, and was also informed that his fee of $150 was too high, the
maximum allowable being $120. | None |
NBRC-
1138 | Amy M. Tonti | Chair, Bankruptcy and
Commercial Law Section, The Allegheny County Bar
Association | Recommendations of the Allegheny
County Bar Association's Bankruptcy and Commercial Law Section to the
National Bankruptcy Review Commission. |
|
| Author submits the Recommendations of the Allegheny County Bar
Association's Bankruptcy and Commercial Law Section to the National
Bankruptcy Review Commission. | "a. The
Section recommends that Bankruptcy Code Sections 327(a) and 1107(b) be
amended to delete any suggestion that professionals employed by a
debtor-in-possession must be disinterested, and to require instead that
they not hold or represent an interest materially adverse to the
estate....b. The Section recommends an amendment to Bankruptcy Code
Section 328(c), authorizing compensation of counsel employed on an
interim basis, upon a good faith effort to make full disclosure and a
good faith belief that employment requirements are met, despite later
disqualifications. c. The Section recommends that Bankruptcy Code
Ssection 328(c) be amended to clarify that committee counsel need not be
disinterested and may not have compensation denied on that basis. d.
The Section recommends that Bankruptcy Code Section 1103(b) be amended
[as per the text given in the letter]." |
NBRC-
1130 | Diane Horton | Owner/Operator, Bay Area
Paralegal |
|
|
| Author operates a paralegal bankruptcy document preparation
service in California. She was "invited" into court to
explain charges of $375.00 for preparing a bankruptcy, which she had to
resubmit three times due to changes by the customer. The judge did not
fine her, or order her to refund any money, but told her that her
company was to "immediately cease from perparing
bankruptcies." Author feels that several wrongs were done here.
First, the public is forced to have an attorney prepare their bankruptcy
at high fees. "Second, this is supposed to be a 'free enterprise'
country, but my right to stay in business has been denied without any
wrong doing, fraud, or any other law being
broken." | None |
NBRC-
1165 | Fred Dombo | Legislative Counsel, HALT:
An Organization of Americans for Legal Reform |
|
|
| Independant paralegals should
have more freedom to provide bankruptcy assistance to
debtors. | First, the word "unfair"
in §110(i)(1) and (2) is overbroad and vague and should be dropped.
"Second, the prohibition on the use of the word "legal"
should be removed from [§110(f) of] The Act because it is an
unconstitutional restraint on commercial free speech." Further,
the caps on fees should be removed. Finally, "the state
unauthorized practice of law rules that are being used to punish
independent paralegals are invaarioably vague....Independant paralegals
should not be prohibited from directing people to information, forms or
software that are intended by the federal government for public use or
in the public domain." |
NBRC-
1179 | Vicki J. Cohen | Paralegal/Manager,
Hammurabi's Assistance Workshop | Undated
letter from author to The Honorable Ed Pastor. |
|
| Author writes to voice her concerns about the restrictions placed
on paralegal bankruptcy document preparers. Author feels that the
specific restrictions and prohibitions set forth in §110 (f)
discriminate against independent (self-employed) Paralegal and other
non-lawyer document preparers. | Section
110(f) should be repealed. |