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Attorneys Fees For a Corporate Bankruptcy, Q&A
How much do attorneys charge for a corporate bankruptcy?
Attorney fees for corporate bankruptcy can vary widely depending on the complexity of the case and the size of the company. For Chapter 7, fees can range from $5,000 to $25,000 or more, depending on asset liquidation complexity. For Chapter 11, fees are significantly higher, often starting around $50,000 and going into the hundreds of thousands or even millions for large, complex cases. Chapter 11 cases involve extensive legal work, including drafting reorganization plans, court appearances, and negotiations with creditors.
How do attorney fees get paid in Chapter 11 Bankruptcies?
In Chapter 11 bankruptcies, attorney fees are considered administrative expenses and are given priority. The fees must be approved by the bankruptcy court to ensure they are reasonable for the services provided. Payment typically comes from the debtor's assets as part of the reorganization plan. The attorney may receive periodic payments throughout the case or at its conclusion, depending on the court's approval and the terms of the reorganization.
If the attorney fees are accruing on a monthly basis, how does that work?
In Chapter 11, attorney fees are typically billed monthly based on the work performed. The attorney submits detailed invoices to the bankruptcy court for approval. These invoices outline the services provided and the time spent. The court reviews the invoices to ensure the fees are reasonable and necessary for the case. Once approved, the fees become administrative expenses. Payment can be made from the debtor's cash flow as part of the operating expenses or from a special fund set aside for professional fees. If the debtor lacks sufficient funds, the payment may be deferred until later in the case or paid through the reorganization plan.
If the attorney is not able to get paid, is the attorney able to withdraw?
Yes, an attorney can request to withdraw from a Chapter 11 case if they're not getting paid. However, because bankruptcy cases are under court supervision, the attorney must get court approval to withdraw. The court will consider factors like the impact on the debtor's case and whether the attorney's withdrawal would cause undue harm. If allowed to withdraw, the attorney must follow any procedures set by the court to ensure a smooth transition and protect the debtor's interests.
Are withdrawals typically granted by the court?
Courts may grant withdrawal requests, but they're not automatic. The court considers the reasons for withdrawal, the timing in the case, and potential impacts on the debtor and creditors. Valid reasons include non-payment, a breakdown in the attorney-client relationship, or ethical conflicts. The court will deny the request if withdrawal would cause significant harm or delay in the case. When allowed, the attorney must comply with court procedures to ensure an orderly transition.
If you are intetrested in a bankruptcy, we at the Law Offices of Albert Goodwin are here for you. You can call us at 212-233-1233 or send us an email at [email protected].
About the Author
Albert Goodwin Esq. is a licenced New York attorney with over 17 years of courtroom experience. His extensive knowledge and expertise make him well-qualified to write authoritative articles on a wide range of legal topics. He can be reached at 212-233-1233 or [email protected].
