Among the U.S. Trustee Program’s top priorities in chapter 11 is reviewing requests to retain and pay professionals from the estate. U.S. Trustees monitor and, when appropriate, object to the employment of chapter 11 case professionals, such as attorneys, accountants, turnaround specialists, and others who will seek to be paid from bankruptcy estate funds. U.S. Trustees review professionals’ applications for employment to ensure compliance with the Bankruptcy Code, including the requirement that any proposed compensation terms be “reasonable.”
U.S. Trustees also have an express statutory responsibility to review applications for professional compensation. In the Bankruptcy Reform Act of 1994, Congress directed the U.S. Trustee Program to establish uniform guidelines for reviewing fee applications to provide consistency in the fee application preparation and review process. In early 1996, the Program published fee guidelines to assist the court, the U.S. Trustees, and interested parties in evaluating the reasonableness of fee requests. The 1996 guidelines include disclosure requirements, task-based billing requirements, and standards for reimbursement for certain expenses. In 2013, the Program promulgated fee guidelines governing the review of applications for compensation filed by attorneys in larger chapter 11 cases.
As in other areas, the Program's work policing professional employment and compensation extends beyond the bankruptcy courts to appeals at every level, including bankruptcy appellate panels, district courts, courts of appeals, and the U.S. Supreme Court. See, e.g., Baker Botts LLP v. ASARCO LLC, 135 S. Ct. 2158 (2015); Lamie v. United States Trustee, 540 U.S. 546 (2004); In re Woerner, 783 F.3d 266 (5th Cir. 2015) (en banc); Davis v. Elliot Management Corp. (In re Lehman Bros. Holdings, Inc.), 508 B.R. 283 (S.D.N.Y. 2014), vacating In re Lehman Bros. Holdings, Inc., 487 B.R. 181 (Bankr. S.D.N.Y. 2013). Through its appellate practice, the Program seeks to clarify the law, produce consistency within the bankruptcy system, and preserve the integrity of the bankruptcy process.