April 28, 2014 4th Circuit published opinion

In re Rowe

The bankruptcy court refused to award the trustee in Rowe’s Chapter 7 case the commission set out in 11 USC 326 based on dissatisfaction with the administration of the estate. The district court affirmed on appeal. The panel reversed and remanded. It held that under 11USC 330(a)(7), the bankruptcy court must award the commission set out in 326 absent extraordinary circumstances because (a)(7) uses “shall” and shall denotes a mandatory requirement. The panel held that compensation can be reduced under the “extraordinary circumstances” standard under 11 USC 330(a)(2) on a case by case basis. The case was remanded to the bankruptcy court for review starting with the correct calculation of the commission under 326 then making any adjustments based on the services provided and the rate of commission.

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