Page 34 - Bankruptcy Volume 1

Need for a Hearing

In some districts, a separate hearing to approve the employment of an accounting firm or a financial ad-
viser is only conducted if a party objects to the firm’s appointment. In other districts, a hearing is rou-
tinely held.

Statement of No Objection by the U.S. Trustee

In many districts, local bankruptcy rules require the U.S. Trustee to state, in writing, that he or she has
no objection to the employment application. Even if the district does not require such a specific declara-
tion, the accountant or financial adviser should consider seeking the U.S. Trustee’s review and com-
ments before the hearing on employment.

Ordinary Course Professionals

In larger bankruptcy cases, certain professionals may be retained as ordinary course professionals.
These professionals have previously provided services to the debtor and will continue to provide ser-
vices to the debtor that are unrelated to the bankruptcy proceeding. Such ordinary course professionals
generally must file a declaration of disinterestedness with the court, but usually do not have to file a fee
application with the court, unless such professional exceeds the fee limit established by the court; occa-
sionally, each ordinary course professional will be required to file a final fee application. Accountants or
financial advisers should not assume they qualify to be ordinary course professionals and should consult
with an attorney before rendering any services.

Fee Applications

Authority for Payment

Sections 330 and 331 of the Bankruptcy Code provide for payment of reasonable compensation for ac-
tual and necessary services rendered by professionals and the reimbursement of actual and necessary ex-
penses. Fees are awarded by the court after consideration of an application for compensation for fees
and reimbursement of expenses (a fee application), after notice to creditors and other parties in interest
(including the U.S. Trustee). A hearing is generally held before approval of fee applications. Fees
awarded may be different from those sought in the fee application.

Preparation of a Fee Application

All fee applications must be prepared in accordance with 11 USC 330 and 331, the Federal Rules of
Bankruptcy Procedure, any local rules of the bankruptcy court for the district in which the case is pend-
ing, and the U.S. Trustee Guidelines for Reviewing Applications for Compensation and Reimbursement
of Expenses (guidelines) Filed Under 11 USC 330 (Title 28, Judicial Administration, of U.S. Code of
Federal Regulations (CFR), Part 58, Appendix A). A copy of the guidelines is included as appendix B of
this practice aid.

General Requirements

Section 330 of the Bankruptcy Code requires the court to consider the nature, the extent, and the value
of such services, taking into account all relevant factors, including the following:

 The time spent on such services

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