Opinion
C/A No. 97-07229-W Chapter 7.
May 1, 2000.
SUPPLEMENTAL ORDER
THIS MATTER came before the Court upon various applications by attorneys for the Trustee for compensation on a contingency fee basis upon the collection of certain claims. While employment and payment of professionals in bankruptcy cases on a contingency fee basis is an acceptable and sometimes preferred means of employment, in practice it is the exception rather than the rule.See, e.g., In re Olympic Marine Serv., Inc., 186 B.R. 651, 653 (Bankr. E.D. Va. 1995) ("In most bankruptcy cases, the fees of attorneys are calculated on a basis of time and hourly charges."). The Court and creditors in an applicable case should be particularly advised when employment on a contingency fee basis is being requested. See, id. at 654 n. 2 (noting that even though 11 U.S.C. § 330 of the Bankruptcy Code requires notice before the compensation of officers is awarded by a court while 11 U.S.C. § 327 does not set forth such a requirement, the judge set forth its own requirement of notice at the time of appointment in order to "bridge this gap in the statutory scheme.") Therefore,
IT IS ORDERED, that effective June 1, 2000, applications requesting employment on a contingency fee basis before this Judge shall indicate that request in bold type in the caption as well as the body of the application and be noticed to all creditors for a period of twenty (20) days, thus allowing for an opportunity to object. Further, all proposed orders authorizing such employment shall indicate in bold type the contingency fee nature of the employment. This requirement is for applications in cases under all Chapters of the Bankruptcy Code with the exception of cases under Chapter 13, in which the debtor is more often the applicant seeking counsel to pursue state law tort claims which are strictly reviewed by the Chapter 13 Trustee. Failure to comply with this Order shall cause deficient applications and proposed orders to be rejected without further hearing.