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Fee applications are an inescapable aspect of bankruptcy practice. As “estate professionals,” attorneys and other professionals employed by debtors in possession, among others, must file fee applications and obtain court approval of their fees.
These tome-like submissions pass through the hands of practitioners of varying levels — from law clerk to senior partner — ensuring not only that the fee application satisfies the amorphous “reasonable compensation for actual, necessary services” standard under § 330(a)(1) of the Bankruptcy Code but also the tedious requirements in courts’ local bankruptcy rules. Much to the chagrin of practitioners, there are gatekeepers standing in the way of compensation, such as the U.S. Trustee, the court (which typically includes the watchful eye of the judge’s law clerk(s)) and any interested party. The unique posture of estate professionals having to petition the court for payment begs the following question: What happens when a party challenges a fee application? More specifically, what happens when a party prevails over a fee application challenge?
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