Trustees Post-Bankruptcy Counsel Fees not Allowed as Part of its Unsecured Claim against the Bankruptcy Estate

January 26, 2016

By: Alan Kolod, David Rabinowitz, Michael Evan Avidon, Kent C. Kolbig, Alan E. Gamza, and Andrew Oliver

Ruling on an issue that has divided the courts, the Bankruptcy Court for the District of Delaware recently held that the post-bankruptcy counsel fees of an indenture trustee could not be allowed as part of the trustee's unsecured claim in bankruptcy.  

Wilmington Trust Company served as indenture trustee for a class of unsecured subordinated debentures of Tribune Co. In Tribune Co.'s bankruptcy, Wilmington Trust filed a proof of claim on behalf of the debentures, including a claim of $30 million for its own fees and expenses incurred in the bankruptcy case.

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