U.S. Trustee Fee Increase Constitutional, Eleventh Circuit Rules

A temporary disparity in U.S. Trustee fees charged to Chapter 11 debtors is constitutional, the Eleventh Circuit ruled.

Friday’s decision from the U.S. Court of Appeals for the Eleventh Circuit adds to a circuit split on the issue, which the U.S. Supreme Court agreed to consider in a separate case stemming from Circuit City’s bankruptcy.

If the high court ultimately finds the disparity unconstitutional, the U.S. Trustee could be required to return some $100 million in fees that are collected to fund the federal bankruptcy watchdog’s operations.

The issue relates to a 2018 hike in quarterly fees paid to the ...