Baker Botts L.L.P. et al. v. ASARCO LLC

Supreme Court Rules Against Fees For Fee Application Defense

Issuing its third bankruptcy ruling in a month, the Supreme Court held, by a 6-3 margin, that the Bankruptcy Code does not permit awarding fees to debtor’s counsel, when counsel incurred those fees defending its own fee application.  The Court held that services defending fee applications were not rendered to the debtor’s estate, and therefore the fees did not constitute “actual, necessary services”  payable under section 330(a)(1) of the Bankruptcy Code as reasonable compensation.  This decision could increase leverage on parties seeking to rein in bankruptcy litigation by threatening to challenge attorney’s fees.  Baker Botts L.L.P. et al. v. ASARCO LLC, No. 14-103, 2015 WL 2473336 (S. Ct. June 15, 2015) (hereinafter, the “Opinion”).

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