ABIs Latest Quick Poll Divided over Prohibition of Success Fees for Financial Advisors
Alexandria, Va.— Respondents to a recent ABI Quick Poll were closely divided over whether success fees should be prohibited for financial advisors. Forty-nine percent of respondents (28 percent “strongly” and 21 percent “somewhat”) thought that success fees for financial advisors should be prohibited, while 42 percent did not (28 percent “strongly” and 14 percent “somewhat”). Nine percent did not know/had no opinion on the poll. When a struggling company looks to retain financial advisors to assist with evaluating its investment or deleveraging options, "success fees" can be included in a contract for the financial advisor that would be paid if certain agreed-upon targets are met. If the company ends up having to file for bankruptcy, courts can scrutinize the financial advisor success fees under §§ 328 and 330 of the Bankruptcy Code. Some experts, however, have raised the prospect of prohibiting success fees because of the murky nature of how they are calculated and the issues surrounding whether they are justified and when they can be paid out. ABI’s Quick Poll is posted on ABI’s home page, www.abiworld.org. ABI members and the public are invited to respond to a question on a timely bankruptcy or insolvency issue. Visit http://news.abi.org/quick-polls/archive to access the results of previous ABI Quick Polls. For more information on ABI's Quick Poll, contact ABI Public Affairs Manager John Hartgen at 703-894-5935 or [email protected] ### ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes over 13,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abiworld.org/conferences.html.
Thursday, October 3, 2013