Foley Reviews Court's Rejection of Attempt to Change Compensation to Quantum Meruit Basis

Shook, Hardy & Bacon Partner Ryan Foley reviews a Kansas bankruptcy court ruling denying an attorney’s application to change a contingency agreement to a quantum meruit hourly fee agreement in “Court Rejects Attempt to Change Basis of Compensation From Approved Contingency Basis to Quantum Meruit Basis,” an article for Ethics & Professional Compensation: An American Bankruptcy Institute Newsletter. The attorney who requested the change had been hired as special counsel to represent debtors in a breach of contract claim under a court-approved contingency agreement. When the debtors fired their lead bankruptcy counsel, the special counsel also believed he had been fired, which turned out to be untrue. The court held that even if he had been fired, the contingency agreement could only be changed if the lawyer’s termination was “incapable of being anticipated at the time” it was approved. However, the court found that “being terminated as counsel is a development that should be anticipated by any contingent fee lawyer.” The case is In re Dynamic Drywall, Inc., No. 14-11131 (Bankr. KS, filed Nov. 2, 2016).