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In re Mosaic Mgmt. Grp., Inc.

United States Bankruptcy Court for the Southern District of Florida, West Palm Beach Division

April 9, 2020, Decided

Chapter 11 Cases, Case No: 16-20833-EPK (Jointly Administered)

Opinion

MEMORANDUM OPINION AND ORDER REGARDING UNITED STATES TRUSTEE QUARTERLY FEES

Margaret J. Smith, as Investment Trustee (the "Investment Trustee") of Mosaic Investment Trust (the "Trust"), established pursuant to the Mosaic Investment Trust Agreement, in the jointly administered chapter 11 cases of Mosaic Management Group, Inc., Mosaic Alternative Assets, Ltd., and Paladin Settlements, Inc. (collectively, [*2]  the "Debtors"), filed the Investment Trustee's Motion for Entry of Order (A) Determining Extent of Investment Trust's Liability for Post-Confirmation Quarterly United States Trustee Fees and (B) Directing Reimbursement or Authorizing Credit for Overpaid Fees (ECF No. 1228; the "Motion"). In her Motion, the Investment Trustee seeks (1) a declaration that the Trust is not liable for post-confirmation quarterly fees payable to the United States Trustee ("UST"), to the extent such fees represent an increase as a result of a 2017 amendment to 28 U.S.C. § 1930 that applies to disbursements occurring on or after January 1, 2018 (the "Amendment"), and (2) an order directing the UST to refund to the Trust, or credit against future fees, sums already paid by the Trust to the extent arising from the Amendment.

The Court held a hearing on the Motion on February 19, 2020 and carefully considered the Motion, the related response and reply (ECF Nos. 1261 and 1262), and the arguments made at the hearing.

As discussed more fully below, the Court will grant the Investment Trustee's Motion in part, to the extent of 2% of total fees payable for disbursements made on or after January 1, 2018, during such time as the Amendment [*3]  is effective.

BACKGROUND

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2020 Bankr. LEXIS 971 *

In re: MOSAIC MANAGEMENT GROUP, INC., MOSAIC ALTERNATIVE ASSETS LTD., and PALADIN SETTLEMENTS, INC., Debtors.

CORE TERMS

quarterly, cases, argues, districts, confirmation, retroactive, pending case, disbursements, effective period, effective, adversary proceedings, bankrupt estate, parties, bankruptcy clause, required to pay, user fee, violates

Bankruptcy Law, Case Administration, Examiners, Officers & Trustees, United States Trustee, Procedural Matters, Jurisdiction, Core Proceedings, Adversary Proceedings, Causes of Action, Bankruptcy, Bankruptcy Court Powers, Constitutional Law, Substantive Due Process, Scope, Governments, Legislation, Effect & Operation, Retrospective Operation, Congressional Duties & Powers, Spending & Taxation, Bankruptcy Clause