Getting Paid by the U.S. Trustee

I love reading opinions where the winning attorney had way more in the guts category than I do.  Dennis Feld, a fellow NACBA member from New Mexico, has just gotten a written opinion out of the Bankruptcy Court in New Mexico to the extent that a withdrawal of a 707(b) motion by the U.S. Trustee qualifies the debtor as a prevailing party under the Equal Access to Justice Act.

Ok, so in English?

The Equal Access to Justice Act allows an award of attorneys fees against the U.S. Government if four conditions are met:

  1. First, the petitioner must be the prevailing party;
  2. The government’s position in the litigation must not have been substantially justified (which means a reasonable basis in both fact and law);
  3. A motion requsting an assessment of fees must be timely filed; and
  4. No special circumstances exist that would make the award unjust

See, In re: Mendez, No. 7-07-11092 Bankr. N.M. decision date September 26, 2008.

The Mendez court found that the Trustee’s withdrawal of its 707(b) motion to dismiss qualified the debtors as a prevailing party. The opinion does not address the remaining three factors. However, I expect to see more litigation on this issue in the near future.

Oh, and as much fun as it is to spend Capital One’s money — and it is, trust me. It must be even more fun to cash that Treasury check.


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