- ￼In re John Wilson, Case No. 15-1150 (7th Cir., Aug. 10, 2015)
- Affirmed the judgment of the U.S. District Court for the Eastern District of Wisconsin; the 7th
Circuit upheld the fee awarded to the chapter 7 trustee after it was challenged by a creditor.
- Procedural context:
- The chapter 7 trustee collected $498,621.56 to distribute to the debtors' creditors, and the
trustee sought a fee of $28,030.33 pursuant to 11 U.S.C. 326(a). Mohn's, the principal
unsecured creditor, challenged the trustee fee. The Bankruptcy Court and District Court
upheld the trustee's fee.
- The debtors hired Mohn's to build a home for them, but did not pay Mohn's because they were dissatisfied with the work. Mohn's prevailed against the debtors in state court and obtained a judgment of $143,000. The debtors could not pay the judgment, and filed a chapter 7 petition. The chapter 7 trustee sold the debtors' home and collected a total of $498,621.56, then distributed $370,996.54 to the mortgagees. Mohn's asked the court to subtract the $370,996.54 that the mortgagee received from the amount that was used to calculate the trustee's commission under sections 326 and 330 of the Bankruptcy Code, which would have reduced the maximum fee the trustee could collect to $9,631.25. The Court noted that the trustee and his staff had spent at least 200 hours working on the case, "at an average hourly expense of $140.15 ..., which is not excessive." (*4.) The Court concluded: "The two statutes [11 U.S.C. 326 and 330] governing trustee compensation are not overgenerous. Taken together they set clear limits on such compensation that were not exceeded by the fee awarded to the trustee." (*5.)
- Posner, Easterbrook, and Sykes, Circuit Judges
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