Joining the Tenth Circuit, the Ninth Circuit also has held that chapter 13 trustees are not paid their fees when cases are dismissed before confirmation. The identical issue was argued on February 15 before the Second Circuit.
In short order, we’ll have either unanimity or a split of circuits. A split will give rise to an issue worthy of a grant of certiorari by the Supreme Court.
Notably, the Ninth Circuit’s opinion on June 12 adopted reasoning in an amicus brief filed in support of the debtor by the National Consumer Bankruptcy Rights Center and National Association of Consumer Bankruptcy Attorneys.
The bankruptcy court does not have constitutional power to enter final judgment in a preference suit against a defendant who did not file a claim or consent to final adjudication in bankruptcy court.....
Final Orders Allowed in Preference Suits Against Defendants Who Didn’t File Claims
Constrained by the logic of In re Bellingham Ins. Agency Incorporated, although not by its holding, Bankruptcy Judge.....