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Bankruptcy-Attorney Fee

7th Circuit Court of Appeals

Case Name: Anthony Peraica v. Patrick S. Layng

Case No.: 22-2501

Officials: Brennan, Scudder, and Kirsch, Circuit Judges.

Focus: Bankruptcy-Attorney Fee

Peraica represented Jelena Dordevic in her Chapter 7 bankruptcy proceeding. Alongside filing the bankruptcy petition, Peraica submitted a form disclosing his fee compensation (known in bankruptcy parlance as a Rule 2016 disclosure) in which he reported that Dordevic had paid him a total of $5,000 for his services. But Peraica’s disclosure was incomplete. As the Trustee learned during discovery, Dordevic had actually paid Peraica $21,500. The U.S. Trustee admonished debtor’s counsel to file a corrected financial disclosure form with the bankruptcy court after learning that counsel’s original filing underreported his compensation. Many times over counsel disregarded the direction, prompting the Trustee to file a motion for disgorgement. The bankruptcy court did not find the question close: counsel’s failure to update his disclosure form constituted a flagrant violation of the Bankruptcy Code warranting complete disgorgement of all past fees received by counsel. The district court properly agreed with the bankruptcy court’s decision.  Peraica’s explanation for not updating his fee disclosure is lacking, if not false. Peraica had been involved in more than 350 bankruptcy cases in the Northern District of Illinois alone. The bankruptcy court ordered Peraica to disgorge all past fees as a penalty for his blatant lack of compliance with his obligations. There is no leeway for partial or incomplete disclosure.


Decided 03/09/23

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