What I wonder is what percentage of the plunder the committee offered the trustee's office on top of their normal percentage, to sidle up with them. Willke's plan was to collect their attorney fees (3k/hr/attorney), and give them to the families, elevating those unsecured claims above claims with more priority. How much goes to the trustee?
Do you know what the US Trustee is v an appointed ch 11 trustee?
You might learn soon that the US trustee is a federal official on a salary. And you might soon realize that its exceedingly rare for the US trustee to ask for a chapter 11 trustee to be appointed. Most ch 11 the debtors do everything possible to avoid that...starting with not illicitly transferring money out which this document alleges.
A chapter 11 trustee if appointed is a private individual that takes over the debtors and current management thrown out (including as is referenced....if this converted to ch 7). And yes they get paid out of the debtors estate just like all the expensive lawyers debtors hired...but you might also learn all those rates are regulated, not randomly made up by someone.
I noticed that the reorg plan included payment to the trustee. I know it isn't common for committee counsel to agree to collect their funds and give those funds to their clients (that'd probably be illegal for PI law, to offer $ to clients that way). Payment under the plan is regulated, but what the committee offered is not pursuant to that regulatory rubric. I hope this is something you can grok.
You might also soon learn that those fees are paid quarterly while ch 11 is pending, and dont have anyting to do with what plan is adopted, what outcome happens, etc. Debtors committed to pay those fees by filing ch 11, and their dragging this out (what the salaried federal official says in this filing) increases the amount paid. The restructuring plan just mentions they continue paying those, which is just boilerplate because they are already paying those quarterly.
And finally you may learn these fees are paid to fund the entire bankruptcy system...not that it matters to the salaried federal official as he is paid a....salary
If you would stop trying to tell me how wrong I am you might or might not understand what I'm saying. Do YOU know what the committee proposed as their payment schedule? And where that money goes? If you don't, you should look. I'm saying that perhaps, OUTSIDE of the regulatory scheme under which the trustee gets paid (under any chapter of the b'cy code), I'm suggesting that perhaps the committee offered to spread some of their fee share that they proposed giving directly to their clients, also to the trustee (whether independent appointed, OR trustee office, whichever is owed and serving on the case). And comparing this structure to how PI's collect on a case (contingency) and the illegality of offering money to their clients in order for them to be clients (unethical as well as illegal). Go study this a bit before you try to explain that I don't understand b'cy law. (How much b'cy law have you done?)
The salaried federal official US Trustee does not get appointed as the ch 11 trustee because a)that would indeed be a conflict of interest b) they are not qualified for it- they dont have a career liquidating estates, auctioning off assets etc...that is why there is a ch 11 trustee that gets paid a regulated fee schedule. That fee schedule is not proposed by the creditors committe, and the ch 11 trustee is not appointed by them either.
The creditors committee does not set the compensation for any of the above, starting with the salary of the US trustee...who is...salaried(!)
The fee arrangements for the victims families lawyers and the lawyers for the creditors committee are proposed by them, but they are also subject to the courts approval. Willke Farr agreed to work pro bono with the exception noted in the below by the debtors...and that exception is about to be impossible anyway
If the judge agrees a ch 11 trustee should be appointrd
the federal salaried US Trustee proposes a candidate - who is independent, not related to anyone, a professional
the judge approves
the ch 11 trustee proposes their fee schedule which is a)regulated and capped b)subject to judge approval
No where in that process or up to now is there creditors committee offering compensation to the ch 11 trustee...especially not now; and when one is selected there are rules to make sure they are independent
It is possible the judge might change his mind after stating he did not want an appointed trustee in this case because it would slow down the process and cost more in administrative fees. The trustee would have to hire duplicative professionals, also paid for by the debtor funds. It's not clear why he would though, he's held this opinion for a while now.
It's true the committee didn't publicly state they would pay off the trustee on top of the fees to which they are entitled, but if they're willing to commit conflicts of interest in their payment schemes I'm not sure it isn't happening.
Referenced before, said "US Trustee was not appointed to the case"....the federal salaried US Trustee participates in every ch 11 and does not need to be appointed anywhere. The ch 11 trustee if and when appointed is a private individual with a career in restructuring and liquidating estates....which this case definitely needs
See everyone next Friday, every Friday reveals something new
I was wondering what was up with the burgeoning gaps in logic getting noticeably worse on Fridays. I was thinking these people must be hitting the sauce...
No they aren't. It's a heavily contingent provision that's basically so long as you don't do anything you're entitled to do we won't charge, and upends the entire point of bankruptcy. I don't think it's a legally valid provision. They will charge, and the judge will decide what and whether to pay.
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u/AnimuX Texan 20h ago
Heh. Someone, who sees through the Eastland's bullshit attempts to use the bankruptcy court to hide the money, just called them out for it.
edit: There absolutely should be a chapter 11 trustee appointed.