In a recent opinion – In re Heritage Home Group LLC, et al., Case No. 18-11736 (KG), 2018 WL 4684802 (Bankr. D. Del. Sept. 27, 2018) – the Delaware Bankruptcy Court addressed the longstanding issue of which professional persons must be retained under section 327(a) of the Bankruptcy Code.

A fundamental tenet of chapter 11 bankruptcies is the absolute priority rule. Initially a judge-created doctrine, the absolute priority rule was partially codified in section 1129(b)(2)(B)(ii) of the Bankruptcy Code. Under section 1129, plans must be “fair and equitable” in order to be confirmed.

Background: Professionals’ Fees in Chapter 11 cases

This week, the U.S. House of Representatives passed the Asbestos Bankruptcy Trust Transparency Bill. The legislation would, if enacted into law, require bankruptcy trusts to file quarterly reports with bankruptcy courts disclosing the names, asbestos-related exposure history, and basis of the victim’s claims for each claimant. These reports would be made available on the courts’ public dockets. Confidential medical records or social security information would not be disclosed.