By Michael L. Cook, James M. Peck, Jeffrey S. Sabin, Janet Beck and Lawrence V. Gelber

Originally published in: SRZ Client ALERT, November 2002

An oversecured creditor's claim for legal fees, enforceable under State law, was recently held by the Eleventh Circuit to be subject to review for reasonableness under Section 506(b) of the Bankruptcy Code. According to the court, any portion of the fees found to be unreasonable would be treated as unsecured debt. Welzel v. Advocate Realty Investments, LLC (In re Welzel), 375 F.3d 1308 (11th Cir., 2001) (en banc).

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© 2002 Schulte Roth & Zabel LLP

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