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2021 Stroock Bankruptcy Guide

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37 where the trustee has performed considerable services for the estate but has not disbursed any funds, certain courts have allowed the trustee to be compensated in a reasonable manner for such services. See, e.g., In re Heatherly, 179 B.R. 872 (Bankr. W.D. Tenn. 1995). In Chapter 12 and 13 cases, the court cannot allow compensation for services or reimbursement of expenses of the U.S. Trustee or a standing trustee appointed under 28 U.S.C. § 586(b), but may allow reasonable compensation under Section 330 of the Bankruptcy Code for a trustee appointed under Section 1202(a) or 1302(a). Such compensation may be paid to the trustee after the trustee renders its services and cannot exceed five percent of all payments under a plan of reorganization. 11 U.S.C. § 326(b). If a "standing" trustee is appointed in a Chapter 12 or 13 case, the compensation paid to such trustee is governed by 28 U.S.C. § 586. Section 328(a) of the Bankruptcy Code, which applies to professionals, requires that the terms and conditions of the engagement be reasonable. In particular, this Section permits the use of retainers and hourly, fixed or percentage and contingent fee arrangements. The court, however, may modify the terms and conditions governing compensation of the professional after the conclusion of the employment should the previously approved compensation agreement subsequently prove to be improvident in light of unexpected developments. 11 U.S.C. § 328(a). Moreover, if at any point during the pendency of the case, the court finds that a professional person is not a disinterested person, the court may deny allowance of compensation and reimbursement of expenses for such person. 11 U.S.C. § 328(c). Section 329 of the Bankruptcy Code provides certain rules regarding a debtor's transactions with its attorneys. According to Section 329, an attorney representing the estate in connection with its bankruptcy must file with the court a statement of the compensation agreed to be paid to it and the source of such compensation, if such payment or agreement was made within one

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