48 U.S. Code § 2178 - Disclosure by professional persons seeking approval of compensation under section 2176 or 2177 of this title

(a) Definitions

In this section:

(1) List of Material Interested Parties

The term “List of Material Interested Parties” means the List of Material Interested Parties established under subsection (c)(1).

(2) Oversight Board

The term “Oversight Board” has the meaning given the term in section 2104 of this title.

(b) Required disclosure

(1) In general

In a case commenced under section 2164 of this title, no attorney, accountant, appraiser, auctioneer, agent, or other professional person may be compensated under section 2176 or 2177 of this title unless prior to making a request for compensation, the professional person has filed with the court a verified statement conforming to the disclosure requirements of rule 2014(a) of the Federal Rules of Bankruptcy Procedure setting forth the connection of the professional person with any entity or person on the List of Material Interested Parties.

(2) Supplement

A professional person that submits a statement under paragraph (1) shall promptly supplement the statement with any additional relevant information that becomes known to the person.

(3) Disclosure

Subject to any other applicable law, rule, or regulation, a professional person that fails to file or update a statement required under paragraph (1) or files a statement that the court determines does not represent a good faith effort to comply with this section shall disclose such failure in any filing required to conform to the disclosure requirements under rule 2014(a) of the Federal Rules of Bankruptcy Procedure.

(c) List of Material Interested Parties

(1) Preparation

Not later than 30 days after January 20, 2022, the Oversight Board shall establish a List of Material Interested Parties subject to—

(A) the approval of the court; and

(B) the right of the United States trustee or any party in interest to be heard on the approval.

(2) Inclusions

Except as provided in paragraph (3), the List of Material Interested Parties shall include—

(A) the debtor;

(B) any creditor;

(C) any other party in interest;

(D) any attorney or accountant of—

(i) the debtor;

(ii) any creditor; or

(iii) any other party in interest;

(E) the United States trustee and any person employed in the office of the United States trustee; and

(F) the Oversight Board, including the members, the Executive Director, and the employees of the Oversight Board.

(3) Exclusions

The List of Material Interested Parties may not include any person with a claim, the amount of which is below a threshold dollar amount established by the court that is consistent with the purpose of this section.

(d) Review

(1) In general

The United States trustee shall review each verified statement submitted pursuant to subsection (b) and may file with the court comments on such verified statements before the professionals filing such statements seek compensation under section 2176 or 2177 of this title.

(2) Objection

The United States trustee may object to applications filed under section 2176 or 2177 of this title that fail to satisfy the requirements of subsection (b).

(e) Limitation on compensation

In a case commenced under section 2164 of this title, in connection with the review and approval of professional compensation under section 2176 or 2177 of this title filed after January 20, 2022, the court may deny allowance of compensation or reimbursement of expenses if—

(1) the professional person has failed to file the verified disclosure statements required under subsection (b)(1) or has filed inadequate disclosure statements under that subsection; or

(2) during the professional person’s employment in connection with the case, the professional person—

(A) is not a disinterested person (as defined in section 101 of title 11) relative to any entity or person on the List of Material Interested Parties; or

(B) represents or holds an adverse interest in connection with the case.

(Pub. L. 117–82, § 2, Jan. 20, 2022, 136 Stat. 3.)

Editorial Notes

References in Text

The Federal Rules of Bankruptcy Procedure, referred to in subsec. (b)(1), (3), are set out in the Appendix to Title 11, Bankruptcy.

This section, referred to in subsec. (c)(3), was in the original “this Act”, meaning Pub. L. 117–82, Jan. 20, 2022, 136 Stat. 3, known as the Puerto Rico Recovery Accuracy in Disclosures Act of 2021 and also as PRRADA, which enacted this section and provisions set out as a note under section 2101 of this title.

Codification

Section was enacted as part of the Puerto Rico Recovery Accuracy in Disclosures Act of 2021, also known as PRRADA, and not as part of the Puerto Rico Oversight, Management, and Economic Stability Act, also known as PROMESA, which comprises this chapter.