Seeking a Substantial Contribution Claim? Know the Applicable Standard and Introduce Evidence

January 17, 2013
Jennifer Kneeland and Jonathan Wright
American Bankruptcy Institute Ethics & Professional Compensation Committee Newsletter

The American Bankruptcy Institute recently published an article written by Jennifer L. Kneeland and Jonathan R. Wright, Seeking a Substantial Contribution Claim?  Know the Applicable Standard and Introduce Evidence.  In some cases, a creditor who assists a bankruptcy estate to marshal assets or uncover claims is rewarded for its efforts by reimbursement of its legal fees and expenses by the bankruptcy estate.  In her article, Ms. Kneeland discusses a split among federal circuits regarding the standard that a creditor or interested party must meet in order to receive reimbursement for legal fees and expenses when efforts result in a substantial contribution to a bankruptcy estate.  Ms. Kneeland also addresses the importance of introducing strong evidence to demonstrate the creditor’s beneficial contribution to the bankruptcy estate.  Ms. Kneeland also points out that some jurisdictions require a creditor to demonstrate that its motivations to assist the bankruptcy estate transcended self-interest – a hurdle that is sometimes hard to meet.  In contrast, other jurisdictions find such evidence irrelevant to the inquiry regarding whether fees and costs will be reimbursed.  Jennifer L. Kneeland, Seeking a 503(b)(3)(D) or (4) Substantial Contribution Claim?  Know the Applicable Standard and Introduce Evidence!, American Bankruptcy Institute Ethics & Professional Compensation Committee Newsletter, Volume 10, Number 1, January 2013.  The article may be found at http://www.abiworld.org/committees/newsletters/ethics-and-professional-compensation/vol10num1/seeking.html