Justices Question Fixes for U.S. Trustee Bankruptcy Fee Disparity

The U.S. Supreme Court wrestled with how to address debtors’ Chapter 11 fee disparities that stem from systemic quirks existing in only two states.

The nine justices heard arguments Monday in Siegel v. Fitzgerald, a case that challenges the constitutionality of a 2017 hike in the U.S. Trustee’s fees, charged to companies in Chapter 11. The increase seeks to address a shortfall in the budget for the U.S. Trustee Program, a Justice Department unit that oversees bankruptcy cases.

The case focuses on a narrow question about how the U.S. Trustee fee hike is not applied uniformly throughout all 50 states, ...