Page 31 - Bankruptcy Volume 1

viduals to be assigned to the engagement. The resumes and the declaration or verified statement should
provide detail sufficient to satisfy the court of the firm’s qualifications.

Description of services. A precise description of the professional services to be rendered listing all of the
services should be provided. A general statement indicating that services may be rendered as required by
the trustee or the official committee, as appropriate and requested, may also be included. However,
compensation for any services provided that are not included in the employment application may not be
approved by the court. If the scope of services to be provided expands beyond that contained in the em-
ployment application, an amended employment application seeking court authorization for the additional
services is needed.

Arrangements for compensation. Arrangements for compensation must be disclosed, including

 the rates that will be charged;

 a statement that those rates conform to those charged for similar services;

 a detailed description of all provisions of any contingent fee arrangement, if any; fn 2

 a statement that all out-of-pocket costs such as photocopying, postage, messenger costs, and oth-
er necessary expenses will be billed; fn 3

 recognition that fees and costs will be paid only upon application to the court and upon express
court approval; and

 the amount and source of a retainer if received before employment, as well as the professional’s
intentions with respect to drawing on that retainer (that is, the retainer will be applied in the first
fee application or in the final fee application).

Relationships. The accountant or financial adviser’s relationship to the debtor, creditors, any other party
in interest and their respective attorneys and accountants, the U.S. Trustee, or any person employed in
the Office of the U.S. Trustee must be disclosed.

Adequate notice to parties in interest. In each bankruptcy, a list of creditors and other parties in interest,
commonly called a matrix, provides the names and addresses of those entitled to be notified of any hear-
ings or actions within the bankruptcy. The application to employ accountants or a financial adviser
should specifically state that all interested parties have been notified; a certificate of service including a
listing of the parties notified is included.

fn 2 The AICPA has issued guidelines allowing firms to accept contingent fee engagements under certain conditions. Because not all
states have adopted the AICPA guidelines, an accountant should contact the governing individual state board of accountancy to de-
termine whether contingent fees are appropriate before considering such an agreement.

fn 3 The U.S. Trustee has issued guidelines in many districts detailing acceptable reimbursement amounts and costs, as well as for
billings for professional services. Billed costs must reflect actual costs with no markups or overhead allocations.

© 2020 Association of International Certified Professional Accountants 29