The U.S. Trustee has begun to advance a novel argument that penalizes the beneficiaries of unsecured creditor trusts: that U.S. Trustee disbursement fees apply not only to disbursements made by debtors, but also disbursements made by creditor trusts formed under bankruptcy plans (commonly referred to as "GUC Trusts" or "Litigation Trusts").
Avoiding Double-Dipping: U.S. Trustee Fees and Creditor Trusts
The U.S. Trustee has recently taken the position that GUC Trusts (disbursements made by creditor trusts formed under bankruptcy plans) should be required to pay fees on account of their own disbursements to creditors. The outcomes in three recent bankruptcy cases highlight different approaches to addressing the U.S. Trustee's argument: closing bankruptcy cases early, deferring the issue to a later date, or focusing on the distinction between contingent and non-contingent assets.
By
Nicole M. Sweeney and Megan M. Wasson
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