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Second Circuit Upholds Professional's Pre-Approved Fixed Fee Award

By Michael L. Cook
February 19, 2009

Financial advisers, investment bankers, lawyers and other professionals in reorganization cases will be happy with a decision of the U.S. Court of Appeals for the Second Circuit handed down on Jan. 6, 2009: In re Smart World Technologies, LLC, ___ F.3d __ 2009 WL 23341 (2d Cir. 1/6/2009). In a case of “first impression” for the Second Circuit, Id. at *1, the court affirmed the district court's holding that the bankruptcy court had “pre-approved” a professional's fixed contingent fee arrangement under Bankruptcy Code (“Code”) ' 328(a), and that “no later developments rendered that approval improvident.” Id. The professional thus received the benefit for which it bargained.

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