The effect of the decision - which went different ways in junior courts - is that law firms are not entiled to fee awards for time spent on defending fee applications in the US bankrutpcy courts. Baker Botts and another firm, Jordan, Hyden, Womble, Culbreth & Holzer, had been seeking a total of US$5m for defending fee applications.
Enhancement fees
The two firms had sued the parent company of mining company Asarco for fraudulent transfer claims. A $10b judgment was subsequently awarded in favour of Asarco and all the Asarco creditors were paid in full. The two law firms were paid $120m on the bankruptcy case as well as $4.1m in enhancement fees for an exceptional performance. They will not now receive the third element, the $5m spent on defending the fee applications.
Pursuing disputed fees
If Baker Botts had won this case, it would have made it easier for law firms in general to claim costs in pursuing disputed fees in bankruptcy cases. Source: ABA
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