In Re Alberto

121 B.R. 531, 1990 Bankr. LEXIS 2507, 1990 WL 189018
United States Bankruptcy Court, N.D. Illinois·Decided November 29, 1990·No. 17-01074·Published·Cited by 7 cases

Opinion

MEMORANDUM OPINION

JOHN H. SQUIRES, Bankruptcy Judge.

This matter comes before the Court on the application of Max Chill and Steven R. Radtke (collectively referred to as the “Applicants”) pursuant to 11 U.S.C. § 331 and Federal Rule of Bankruptcy Procedure 2016 for allowance of interim compensation in the amount of $44,476.50 and reimbursement of expenses in the amount of $499.10, for the period January 5, 1990 through August 31, 1990. Proper notice was given to all creditors and parties in interest pursuant to Federal Rule of Bankruptcy Procedure 2002. For the reasons set forth herein, the Court hereby allows interim compensation in the amount of $18,067.00 and reimbursement of expenses in the amount of $392.60.

*533 I.JURISDICTION AND PROCEDURE

The Court has jurisdiction to entertain this fee application pursuant to 28 U.S.C. § 1334 and General Rule 2.33(a) of the United States District Court for the Northern District of Illinois. This matter constitutes a core proceeding under 28 U.S.C. § 157(b)(2)(A) and (0).

II.FACTS AND BACKGROUND

Many of the facts, background and some of the history of this case are contained in an earlier Opinion of the Court. See In re Alberto, 119 B.R. 985 (Bankr.N.D.Ill.1990). The Applicants were retained by the Debt- or and received a pre-petition advance payment retainer in the sum of $18,000.00. On April 5, 1990, the Debtor filed a Chapter 11 petition. The Debtor has operated as a debtor-in-possession pursuant to 11 U.S.C. §§ 1107 and 1108. Hotly contested litigation among the Debtor and various creditors is pending in several forums which include the District Court for the Northern District of Illinois, the Seventh Circuit Court of Appeals, and this Court. For reasons stated in the earlier Opinion, the original plan and disclosure statement were stricken for violations of Federal Rule of Bankruptcy Procedure 9011. The Debtor has filed an amended plan and disclosure statement, and has also filed an adversary proceeding seeking declaratory relief, and determination of the validity, priority and extent of certain lien claims and interests in property.

III.ARGUMENTS OF THE PARTIES

The Applicants seek the requested compensation for services performed incidental to these proceedings, the other litigation to which the Debtor is a party, and for investigations of various matters. The CIT Group/Equipment Financing, Inc. (“CIT”), D & D Disposal Service, Inc. (“D & D”) and Frank Ward, Sr. (“Ward”) object to the allowance and payment of any of the requested compensation. Bank of Chicago-Little Village (the “Bank”) objects to the allowance and payment of all the requested sums and asks the Court to defer ruling on the instant application.-

CIT’s objections initially challenge the hourly rate charged by one of the Applicants as too high for the nature of most of the work performed. In addition, CIT argues that the descriptions for many of the entries are inadequate and insufficiently detailed. Moreover, CIT objects to compensation for services performed for the Debtor in other courts; work relating to the attempted sale of allegedly non-estate assets; work involving the Debtor’s son; and services in connection with a non-debt- or partnership. CIT further objects to allowance of compensation sought for defense of sanctions imposed by the district court upon the Debtor and one of the Applicants; the services incidental to the motion filed by the Debtor against CIT pursuant to 11 U.S.C. § 362(h); and the services rendered in connection with the stricken original plan and disclosure statement. D & D and Ward’s objections raise some of the same points argued by CIT, but mainly contend that the application is premature until it is finally decided whether or not the Debtor retains any ownership interest in the beneficial interest of the land trust holding title to the Laflin property.

The Applicants defend the application, in part, by explaining the historical background of the Debtor's legal and financial problems culminating in the pending proceedings in the several courts. The Applicants assert that it is the intractable positions taken by some creditors in general, and CIT in particular, that have necessitated much of the work performed on behalf of the Debtor. The Applicants deny that they performed any services for non-debtor entities or persons. The Applicants conclude that the Debtor’s creditors have forced the Debtor to act and defend on multiple fronts and forums, and therefore, cannot properly object to any of the fees and costs generated thereby.

IV.DISCUSSION

A. STANDARDS APPLICABLE TO FEE APPLICATIONS

Generally, professional persons seeking compensation from the estate must first be *534 authorized to be employed under section 327 and Bankruptcy Rule 2014. Interim fees may be allowed as prescribed by section 331, which utilizes the same substantive standards set forth in section 330. Pursuant to 11 U.S.C. § 330, authorized employed professionals applying for fees must then demonstrate that their services were actual, necessary and reasonable. The legislative history of section 330 expressly notes the Court’s correlative duty to closely examine the reasonableness and necessity of the fees incurred. Bankruptcy Rule 2016(a), in turn, requires that “[a]n entity seeking interim or final compensation for services, or reimbursement of necessary expenses, from the estate shall file with the court an application setting forth a detailed statement of (1) the services rendered, time expended and expenses incurred, and (2) the amounts requested.” Fed.R.Bankr.P. 2016(a). In addition, section 329 permits the bankruptcy court to review the fees of a debtor’s attorney, paid during the year prior to the filing of the petition, for services rendered in contemplation of or in connection with the case. Section 329 empowers the bankruptcy court to order the return of excessive fees paid pre-petition.

The burden of proof to show entitlement to the fees requested is on the Applicant. In re Pettibone Corp., 74 B.R. 293, 299 (Bankr.N.D.Ill.1987); In re Lindberg Products, Inc., 50 B.R. 220, 221 (Bankr.N.D.Ill.1985). Moreover, the fee application must stand or fall on its own merits. See In re Wildman, 72 B.R. 700 (Bankr.N.D.Ill.1987).

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In Re Alberto, 121 B.R. 531, 1990 Bankr. LEXIS 2507, 1990 WL 189018 (Ill. 1990).

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