From the Wall Street Journal Bankruptcy Beat
Chapter 11 is getting more expensive, but top-dollar attorney fees aren’t the reason…this time.
Starting Nov. 1, it will cost a company $1,213 to file a Chapter 11 petition, or nearly $200 more than the current filing fees. The extra cash will cover the cost of legislation to extend temporary judgeships at bankruptcy courts across the nation in order to avoid a judge shortage.
The $1,213 price tag includes the current $46 administrative fee but increases the case-filing fee to $1,167 from $1,000. Attorneys, take note: failure to pay these fees could result in the bankruptcy case being thrown out.
The extra $167 raked in for each Chapter 11 case should be enough to meet the estimated $16 million cost of extending the judgeships, according to legislators. This spring, they passed, and President Obama signed into a law, a bill to extend 29 temporary judgeships by five years. The bill, which languished in Congress for several months, covers judgeships in Puerto Rico and 14 states (including the busiest spots for corporate Chapters 11s: Delaware and New York).
The temporary judgeships, which Congress previously authorized to meet demand, had lapsed, putting courts at risk of losing judicial seats should a temporary or permanent judge leave the bench for any reason. Legislators introduced a bill to extend the judgeships to avoid swamping bankruptcy courts. While all bankruptcy filings, personal and corporate, fell by about 8% between Oct. 1, 2010, and Sept. 30, 2011, the 1.5 million cases the nation’s courts took on last year still represent a busy workload. And the drop marked the first decline in bankruptcy filings since 2007, according to federal-court data.
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