514 B.R. 105
D.N.J.2014Background
- Debtor George A. Nardello filed a Chapter 13 petition in 2012 and Isabel Balboa was appointed standing trustee for the district.
- Wells Fargo sought relief from stay to repossess a yacht; Supnicks moved to approve sale of jointly owned North Wildwood property.
- The North Wildwood property was sold; proceeds were held by the Standing Trustee pending court orders and later distributed to various parties.
- Debtor filed a plan to fund by monthly payments and sale proceeds; plan confirmation and value disputes delayed confirmation.
- A Final Report and Account showed a 6.6% standing trustee fee on the trustee’s expenses and other disbursements, including proceeds from the sale.
- Debtor objected to the trustee’s percentage fee; the bankruptcy court overruled the objection, authorizing the fee.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the percentage fee calculated on all payments received | Nardello argues fee should not include non-plan receipts | Balboa argues fee is mandatory on all payments received under § 586(e)(2) | Yes; fee is calculated on all payments received, including the trustee’s fee |
| May the trustee collect a percentage fee in a Chapter 13 case dismissed before confirmation | Nardello contends no fee where no confirmed plan exists | Balboa contends § 586(e)(2) mandates the fee even if dismissed pre-confirmation | Yes; trustee is entitled to the percentage fee even in pre-confirmation dismissal |
Key Cases Cited
- Rosano v. Township of Teaneck, 754 F.3d 177 (3d Cir. 2014) (statutory interpretation of §586(e) principles)
- In re BDT Farms, Inc., 21 F.3d 1019 (10th Cir. 1994) (interpretation of ‘all payments received’ under §586(e))
- In re Acevedo, 497 B.R. 112 (Bankr.D.N.M. 2013) (fees under §586(e) and §1326 interpreted together)
- In re Turner, 168 B.R. 882 (Bankr.W.D. Tex. 1994) (trustee fees treated as user fees; pre-confirmation receipts)
- In re Edge, 122 B.R. 219 (D. Vt. 1990) (fees not treated as plan payments under §586)
- In re Rivera, 268 B.R. 292 (Bankr.D.N.M. 2001) (context for §1326(a) and trustee fees)
- In re Jackson, 321 B.R. 94 (Bankr.S.D. Ga. 2005) (persuasive reasoning on handbook interpretation)