Now Updating
Litton Loan Servicing, L.P. v. Dennis Schubert

Summarizing by Amir Shachmurove

In re Douglas Harmon

Case Type:
Case Status:
Reversed and Remanded
Ninth Circuit Bankruptcy Appellate Panel Case No. ID-20-1168-LSG (9th Circuit, Jul 20,2021) Not Published
The BAP held that a standing trustee is entitled to collect the statutory fee under § 586(e) upon receipt of each payment under the Chapter 13 Plan and is not required to disgorge the fee if the case is dismissed prior to confirmation. The majority concluded that § 586(e) establishes a percentage fee which must be collected from all Chapter 13 plan payments to compensate standing trustees for administrative tasks which they must perform regardless of whether a plan is confirmed. The ruling includes both a concurrence and dissent further discussing the interplay of § 586(e) and § 1326(a) .
Procedural context:
The Chapter 13 Trustee filed a motion to reconsider the bankruptcy court disallowing her fees. The bankruptcy court denied the Chapter 13 Trustee's motion without hearing and issuing a written memorandum decision. The bankruptcy court, relying primarily on In re Evans, 615 B.R. 290 (Bankr. D. Idaho 2020), determined that a standing Chapter 13 Trustee was not entitled to collect her fee from plan payments received if the Chapter 13 case was dismissed prior to confirmation. The Chapter 13 Trustee timely appealed the bankruptcy court's decision.
The background leading to this appeal is fairly straightforward. A joint Chapter 13 case was filed in December 2019. Approximately four months later, the bankruptcy court granted the Debtors request to voluntarily dismiss their case. At the time of dismissal no confirmation order had been entered. The Debtors had remitted $2,178.03 in Plan payments. The Debtors' counsel sought approval of their fees in the amount of $1,839. Chapter 13 Trustee filed a response affirming she had no objection to the fee request. A proposed order was lodged approving Debtors' counsel's fees and authorizing payment of the fees from the funds held by the Chapter 13 Trustee. The proposed order included language that "the balance of the funds on hand to be refunded to Debtor(s). Said disbursement shall be subject to Trustees fees." The bankruptcy court struck this language from the proposed order noting it is inconsistent with In re Evans, 615 B.R. 290 (Bankr. D. Idaho 2020) and In re Leal, 20-00068-TLM.
Honorable Lafferty, Spraker, and Gan, Bankruptcy Judges

ABI Membership is required to access the full summary. Please Sign In using your ABI Member credentials. Not a Member yet? Join ABI now - it is absolutely worth it!

About us in numbers

3512 in the system

3392 Summarized

6 Being Processed