New federal guidelines governing the review of bankruptcy attorneys' fees and expenses go into effect on November 1, 2013. These guidelines, which were approved by the Department of Justice's United States Trustee Program ("USTP") after a lengthy public review and comment period, apply to Chapter 11 bankruptcy cases filed on or after November 1 by debtors with at least $50 million in assets and at least $50 million in liabilities.
The USTP, which is the arm of the DOJ assigned to oversee bankruptcy cases, first issued guidelines governing the review of attorney fee applications in 1996. While these guidelines do not carry binding authority (as the final authority to award compensation and reimbursement under the Bankruptcy Code is vested in the court), they do provide a framework that allows interested parties to evaluate whether fees sought by debtor's counsel and other professionals are appropriate. The new guidelines for large chapter 11 cases are focused not simply on increasing the amount of information disclosed in connection this evaluation process, but ensuring that the information disclosed can be more readily interpreted and analyzed.
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