Unwanted Disclosure: New Chapter 11 Rules Require Law Firms To Reveal All Their Fees
By: Correy E. Stephenson
Virginia Lawyers Weekly
...The new guidelines "will require bankruptcy lawyers to do things that we have not necessarily done before," said Chirstopher A. Jones in Falls Church. "This is a new level of administrative burden and, depending on the size and complexity of the case, could be very significant."
...Jones estimated that over the last five years in Virginia, no more than 10 cases would qualify, leaving the existing fee guidelines in place for the remaining majority of Chapter 11 cases.
...Jones noted that some firms prepare a plan for internal use but having to disclose it publicly "is a big change." The sheer amount of administrative work "will be very cumbersome."
...Predicting how a case will proceed is a tricky proposition, "as so many unexpected things can happen that can change a plan between when a case is filed and where it goes," Jones said. "A Chapter 11 case - especially a case of this size - is like a living organism continually growing and developing."
...Jones said many lawyers and firms change their hourly rates on an annual basis at the beginning of a new fiscal year. If that bump is more than 10 percent, an attorney may be required to provide an explanation to the trustee to justify his raise, he said.