March 16, 2015

In DVI Receivables XIV, LLC, et al. v. Rosenberg, the United States Court of Appeals for the Eleventh Circuit recently affirmed a bankruptcy court’s award of approximately $1 million in compensation for the debtor’s attorneys’ fees against the petitioning creditors.

Specifically, the Eleventh Circuit held that the plain language of section 303 of the Bankruptcy Code does not limit a debtor from obtaining payment of its attorneys’ fees from the petitioning creditors for fees and expenses incurred in the dismissal of the bankruptcy petition. In fact, the debtor may recover from the petitioning creditors its attorneys’ fees incurred in obtaining dismissal of the involuntary petition, fees sustained in defending an appeal of the order dismissing the petition, and fees for prosecuting an action to recover attorneys’ fee, i.e. fees on fees.

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