STIPULATION AND CONSENT ORDER DIRECTING DISGORGEMENT OF FEES; AND PROVIDING FOR ADDITIONAL RELIEF

DAVID E. RICE, Bankruptcy Judge.

WHEREAS, on February 22, 2012, Michele L. Payer ("Ms. Payer") was disbarred;

WHEREAS, prior thereto Ms. Payer practiced bankruptcy law in this Court;

WHEREAS, on or about the date of her disbarment, Ms. Payer was counsel of record in forty-eight open Chapter 13 bankruptcy cases (the "Open Cases");1

WHEREAS, in the vast majority of the Open Cases Ms. Payer had entered into fee agreements (the "Paragraph 4B Fee Agreements") under MD Local Bankruptcy Rule 9010-6 and paragraph 4B of Appendix F which obligated Ms. Payer to provide legal representation for all matters in the main case;2

WHEREAS, the U.S. Trustee asserts that the Paragraph 4B Fee Agreements require Ms. Payer to provide legal representation until those cases are completed;

WHEREAS, Ms. Payer is unable to provide legal representation after February 22, 2012;

WHEREAS, the debtors in the Open Cases do not have legal representation after February 22, 2012 unless and until they retain new counsel despite their entry into the Paragraph 4B Fee Agreement which should have provided them with representation until their cases are completed;

WHEREAS, Ms. Payer has or had an administrative claim in each of the Open Cases for the full amount of her professional fee;

WHEREAS, the U.S. Trustee asserts that professional fees already paid to Ms. Payer for representation due to debtors after February 22, 2012 are subject to disgorgement pursuant to 11 U.S.C. § 329;

WHEREAS, the U.S. Trustee asserts any professional fees later paid to Ms. Payer on account of her administrative claims and under the terms of confirmed plans in the Open Cases for representation due to debtors after February 22, 2012 would be subject to disgorgement pursuant to 11 U.S.C. § 329;

WHEREAS, Ms. Payer has earned fees for services rendered prior to February 22, 2012 in some of the Open Cases which fees have not been paid to her (the "Earned Fees");

WHEREAS, the U.S. Trustee takes the position that the Earned Fees are not an asset of Ms. Payer's bankruptcy case because until the Earned Fees are paid out of the Open Cases by the chapter 13 trustee they are either an asset of the estate in the Open Cases or they are held in trust for the benefit of debtors;

WHEREAS, the U.S. Trustee reviewed every Open Case and proposes a resolution of the fee/disgorgement issues created by Ms. Payer's disbarment in accordance with the reconciliation attached hereto as Exhibit A, which is explained in greater detail below;

WHEREAS, Ms. Payer has engaged in good faith settlement negotiations with the U.S. Trustee beginning as early as March, 2012;

WHEREAS, but for this agreement and Ms. Payer's voluntary cooperation with the U.S. Trustee, the U.S. Trustee would have filed a motion for disgorgement of fees and other sanctions against Ms. Payer pursuant to 11 U.S.C. §§ 105 and 329;

WHEREAS, the U.S. Trustee and Ms. Payer desire to resolve the U.S. Trustee's concerns regarding the Open Cases and the payment of her fees therein by the terms of this Stipulation and Consent Order.

NOW, THEREFORE, the U.S. Trustee and Ms. Payer do agree, stipulate and consent as follows:

The foregoing recitals are true and correct;

1. Attached hereto and incorporated herein as Exhibit A is a chart that inter alia: lists all of the Open Cases; indicates the fee charged to each respective debtor; indicates the amount of that fee paid to Ms. Payer to date; and indicates the amount of fee earned by Ms. Payer prior to February 22, 2012.

2. Without prejudice to the rights of any debtor to seek a different determination as to the amount of a fee disgorgement due from Ms. Payer, the U.S. Trustee and Ms. Payer agree that disgorgement as shown in columns AE and AF of Exhibit A is appropriate.

3. The U.S. Trustee and Ms. Payer agree that fees for which disgorgement is appropriate amount to $25,112 (the "Total Disgorgement Amount").

4. Of the Total Disgorgement Amount, $14,274 has been paid to Ms. Payer either directly by debtors prior to case commencement or by the chapter 13 trustees pursuant to Ms. Payer's administrative claims (the "Paid Fees Subject to Disgorgement").

5. The Paid Fees Subject to Disgorgement are reflected in column AF of Exhibit A.

6. The U.S. Trustee and Ms. Payer agree that Ms. Payer holds claims for Earned Fees in eleven of the Open Cases as reflected in column AB of Exhibit A in the amount of $11,113.

7. Ms. Payer agrees to, and upon entry of this order, does hereby assign her claims for Earned Fees to the order of Nancy Spencer Grigsby, Trustee ("Ms. Grigsby").

8. The chapter 13 trustees are directed to pay, only from the escrow account of a debtor in an Open Case with an Amount Remaining Due to Ms. Payer reflected in column AB of Exhibit A, the Earned Fees to the order of Ms. Grigsby in the same priority and order as they would normally pay an administrative legal fee claim.

9. Until such time as no Open Case remains, Ms. Grigsby agrees to marshal the Earned Fees and shall, on a monthly basis, distribute the Earned Fees among the debtors having paid fees subject to disgorgement as reflected in column AF of Exhibit A in a pro rata manner.

10. Of the Total Disgorgement Amount, $10,838 has not been paid to Ms. Payer but is either currently on deposit in an escrow account for an Open Case or will be paid into an escrow account for an Open Case as (and if) the debtors in the Open Cases perform their confirmed plans (the "Unpaid Fees Subject to Disgorgement").

11. The chapter 13 trustees are directed to pay, only from the escrow account of a debtor in an Open Case reflecting Unpaid Fees Subject to Disgorgement in column AE of Exhibit A, the Unpaid Fees Subject to Disgorgement to the debtors in the same priority and order as they would normally pay an administrative legal fee claim except that the Unpaid Fees Subject to Disgorgement shall not be paid until after full payment of the Earned Fees.

12. The provisions of this Order shall remain enforceable after any dismissal of this bankruptcy case and until such time as no Open Case remain open.

Having reviewed the terms and conditions of this Stipulation and Consent Order and finding the terms and conditions contained herein to be reasonable, it is by the United States Bankruptcy Court for the District of Maryland, SO ORDERED.

Exhibit A