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11 U.S.C. § 326Limitation on compensation of trustee

submitted 48 years ago by Pub. L. 95-598 to r/title-11-BANKRUPTCY · 321 words · no verdicts yet

in plain englishAI-generated · not legal advice

Courts cap how much a bankruptcy trustee can be paid, based on percentages of money the trustee distributes. The cap shrinks as amounts distributed grow larger.

(a) In a Chapter 7 or Chapter 11 case, except Subchapter V of Chapter 11, the court can allow reasonable compensation under section 330 for the trustee's work, paid after the trustee performs it. The cap works in tiers, based on money the trustee pays out to parties other than the debtor, including secured creditors: up to 25 percent of the first $5,000; up to 10 percent of the amount from $5,000 to $50,000; up to 5 percent of the amount from $50,000 to $1,000,000; and up to 3 percent of anything above $1,000,000. (b) In a Subchapter V Chapter 11 case, or a Chapter 12 or 13 case, the court cannot pay the United States trustee or a standing trustee under 28 U.S.C. § 586(b) for their services or expenses. But the court can allow reasonable compensation under section 330 for a trustee appointed under section 1202(a) or 1302(a), up to 5 percent of all payments made under the plan. (c) If more than one person serves as trustee in a case, their combined pay cannot exceed the single-trustee cap set by (a) or (b). (d) The court can refuse to pay the trustee, or reimburse the trustee's expenses, if the trustee failed to look carefully into facts that could have blocked payment under section 328(c), or if, knowing those facts, the trustee still hired a professional under section 327.
the actual law source: uscode.house.gov ↗public domain
(a)

In a case under chapter 7 or 11, other than a case under subchapter V of chapter 11, the court may allow reasonable compensation under section 330 of this title of the trustee for the trustee’s services, payable after the trustee renders such services, not to exceed 25 percent on the first $5,000 or less, 10 percent on any amount in excess of $5,000 but not in excess of $50,000, 5 percent on any amount in excess of $50,000 but not in excess of $1,000,000, and reasonable compensation not to exceed 3 percent of such moneys in excess of $1,000,000, upon all moneys disbursed or turned over in the case by the trustee to parties in interest, excluding the debtor, but including holders of secured claims.

(b)

In a case under subchapter V of chapter 11 or chapter 12 or 13 of this title, the court may not allow compensation for services or reimbursement of expenses of the United States trustee or of a standing trustee appointed under section 586(b) of title 28, but may allow reasonable compensation under section 330 of this title of a trustee appointed under section 1202(a) or 1302(a) of this title for the trustee’s services, payable after the trustee renders such services, not to exceed five percent upon all payments under the plan.

(c)

If more than one person serves as trustee in the case, the aggregate compensation of such persons for such service may not exceed the maximum compensation prescribed for a single trustee by subsection (a) or (b) of this section, as the case may be.

(d)

The court may deny allowance of compensation for services or reimbursement of expenses of the trustee if the trustee failed to make diligent inquiry into facts that would permit denial of allowance under section 328(c) of this title or, with knowledge of such facts, employed a professional person under section 327 of this title.

Source credit: (Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2562; Pub. L. 98–353, title III, § 430(a), (b), July 10, 1984, 98 Stat. 369; Pub. L. 99–554, title II, § 209, Oct. 27, 1986, 100 Stat. 3098; Pub. L. 103–394, title I, § 107, Oct. 22, 1994, 108 Stat. 4111; Pub. L. 116–54, § 4(a)(4), Aug. 23, 2019, 133 Stat. 1085.)

history & why it existsrecord from the source credit
  • 1978Enacted · Pub. L. 95-598 · 92 Stat. 2562
  • 1984Amended · Pub. L. 98-353 · 98 Stat. 369
  • 1986Amended · Pub. L. 99-554 · 100 Stat. 3098
  • 1994Amended · Pub. L. 103-394 · 108 Stat. 4111
  • 2019Amended · Pub. L. 116-54 · 133 Stat. 1085

A history note hasn’t been published yet. The record shows enactment by Pub. L. 95-598 on 1978-11-06.

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