Schafer and Weiner, PLLC Beats IRS on Appeal

September, 2020

John Stockdale, Jr. represented Central Processing Services, LLC in its Chapter 11 bankruptcy case, which was dismissed on the request of the Internal Revenue Service (“IRS”).  Thereafter, the IRS sought to disgorge the professional fees earned by Schafer and Weiner, which served as the debtor’s professionals, in order to achieve pro rata distribution among administrative creditors.  Based on John’s papers, the Bankruptcy Court ruled against the IRS in a published opinion.  The IRS appealed the decision to the District Court, which affirmed the Bankruptcy Court’s decision based on the arguments raised in John’s papers.  The Bankruptcy Court and the District Court held that there are no requirements for pro rata distribution to administrative creditors in a dismissed chapter 11 case. A copy of the District Court decision can be accessed here.