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Post-Bankruptcy Legal Fees

Second Circuit Joins Ninth Circuit in Allowing Fees Based on Pre-Bankruptcy Agreement

January 1, 2010
The Bankruptcy Strategist

The United States Court of Appeals for the Second Circuit held on Nov. 5, 2009, that a creditor was entitled to its post-bankruptcy legal fees incurred under a pre-bankruptcy indemnity agreement. Ogle v. Fid. & Deposit Co. of Md., __F.3d __, 2009 U.S. App. LEXIS 24329 (2d Cir. Nov. 5, 2009). Affirming the lower courts and agreeing with a recent Ninth Circuit decision, the Second Circuit explained that the Bankruptcy Code ("Code") "interposes no bar … to recovery." Id. at *12 (citing Travelers Cas. & Sur. Co. of Am. v. Pac. Gas & Elec. Co., 549 U.S. 443, 452 (2007) ("[C]laims enforceable under applicable state law will be allowed in bankruptcy unless they are expressly disallowed.").