U.S. Trustee Program

The United States Trustee Program (USTP) has published enforcement guidelines for use by USTP personnel in evaluating chapter 7 bifurcated fee agreements and determining whether enforcement actions are appropriate. It is the USTP’s position that, absent contrary local authority, bifurcated fee agreements are permissible, provided they do not harm debtors or the integrity of the bankruptcy system. The guidelines generally provide that attorney’s fees under such agreements must be fair and reasonable and that attorneys must provide adequate disclosures to their clients and obtain their fully informed consent and must make adequate public disclosures.

Ramona D. Elliott, Acting Director, Executive Office for U.S. Trustees.

Clifford J. White III, Director, Executive Office for U.S. Trustees.

Clifford J. White III, Director, Executive Office for U.S. Trustees.

By Clifford J. White III, Director, EOUST; Walter W. Theus, Jr., Trial Attorney, EOUST; and Nan Roberts Eitel, Associate General Counsel for Chapter 11 Practice, EOUST. Published in ABI Journal (Vol. XL, No. 8, August 2021).

By Robert S. Gebhard, Assistant Director for Oversight, EOUST; and Nancy J. Gargula, U.S. Trustee, Regions 10 and 21. Reprinted with permission from American Bankruptcy Trustee Journal (Spring 2021).

Clifford J. White III, Director, Executive Office for U.S. Trustees.