Avoiding Double-Dipping: U.S. Trustee Fees And Creditor Trusts

The U.S. Trustee has recently taken the position that GUC Trusts (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.

What You Need to Know

• There is little dispute that the transfer of assets by a debtor to creditor trusts formed under bankruptcy plans (GUC Trusts) is a disbursement triggering U.S. Trustee fees.
• The U.S. Trustee has recently taken the position that GUC Trusts should be required to pay fees on account of their own disbursements to creditors.