In Re Best Pack Seafood, Inc.

21 B.R. 852, 1982 Bankr. LEXIS 3713, 9 Bankr. Ct. Dec. (CRR) 389
United States Bankruptcy Court, D. Maine·Decided July 15, 1982·No. 14-20931·Published·Cited by 7 cases

Opinion

MEMORANDUM OPINION

FREDERICK A. JOHNSON, Bankruptcy Judge.

Counsel to the trustee of Best Pack Seafood, Inc. a chapter 11 debtor, has requested approval of interim compensation in the amount of $32,936.00 for professional services and expenses in the amount of $1,904.25. First Phillips Corporation, the financier of the debtor’s reorganization plan has objected to the fees on the grounds they exceed the $20,000 maximum amount set for such service in an agreement between it and the trustee.

Counsel for the trustee, whose retention was previously approved by the court, is entitled to compensation for professional services. See Cowgill v. Acker (In re Byman Furniture & Interiors, Inc.), 14 B.R. 230, 5 C.B.C.2d 376, 381 (Bkrtcy.S.D.Tex.1981); 11 U.S.C. § 327(b); see also Official Creditors Committee of Fox Markets v. Ely, 337 F.2d 461 (9th Cir. 1969); In re J & S Inc., 19 C.B.C. 822, 824 (Bkrtcy.D.Vt.1979). But this application like all such fee applications must be reviewed by the court In re Eureka Upholstering Co., 48 F.2d 95 (2nd Cir. 1931), to determine within its discretion, In re Dole, 244 F.Supp. 751, 754 (D.Me.1965); In re McAuley Textile Corp., 11 B.R. 646 (Bkrtcy.D.Me.1981), that the services rendered required the professional legal skills of an attorney, In re Meade Land and Development Co., Inc., 527 F.2d 280 (3rd Cir. 1975), as counsel fees cannot be paid for services that should have been performed by the trustee, In re J. M. Wells, 575 F.2d 329, 331 (1st Cir. 1978), and are reasonable and necessary for the preservation of the estate, Rose Pass Mines v. Howard, 615 F.2d 1088, 1090 (5th Cir. 1980).

Determining that the fees sought represent only legal services is a judicial responsibility, In re Eureka Upholstering Company, Inc., 48 F.2d 95, 96 (2d Cir. 1931); In re Foster Iron Works, Inc., 3 B.R. 715, 22 C.B.C. 839, 841 (S.D.Tex.1980); In re McAuley Textile, 11 B.R. 646, 648 (Bkrtcy.D.Me.1981), which is facilitated by the attorney’s application, In re Farrington Manufacturing Co., 540 F.2d 653, 657 (4th Cir. 1970), which should provide sufficient detail to permit a determination of the legal nature of the service and whether it is a reasonable and necessary expense, see In re Hamilton Distributors, Inc., 440 F.2d 1178, 1180 (7th Cir.. 1970); In re Fuego Heating Systems, Inc., 17 B.R. 561 (Bkrtcy.D.Me.1982); In re McAuley Textile Corp., 11 B.R. 646 (Bkrtcy. *854 D.Me.1981). Absence of detail regarding the service performed does not absolve the court from evaluating the service it may proceed utilizing the information submitted and its knowledge of the case. In re Hamilton Distributors, Inc., 440 F.2d 1178, 1180 (7th Cir. 1970); In re McAuley Textile, supra; In re Leader International Industries, Inc., 2 B.C.D. 588 (Bankr.E.D.Mich.1976).

The present application enumerates the tasks undertaken by counsel and his associates. Each of these undertakings 1 did require the professional legal skills of an attorney. While the negotiating and securing sale of stock would usually be a function of the trustee, see In re Leader International Industries, Inc., 2 B.C.D. 588, 590 (Bkrtcy.E.D.Mich.1970), the specific involvement here required the skills of counsel. Similarly, examining books and records and recovering property of the estate are the responsibility of the trustee, see In re T. M. Wells, Inc., 575 F.2d 329 (1st Cir. 1978); In re Cliff House Motor Hotel, 2 B.C.D. 460, 461 (Bkrtcy.W.D.Mass.1970), but under the present circumstance the acts were directly related to pending and potential litigation and clearly the function of counsel.

Whether the fee of $32,936.00 is reasonable compensation for the services rendered must also be determined by the court. In re Hamilton Hardware Co., Inc., 8 B.C.D. 667, 668 (Bkrtcy.E.D.Mich.1981); 11 U.S.C. § 330(a). Reasonable compensation as defined by the Bankruptcy Code may be “based on the time, the nature, the extent, and the value of such services, and the cost of comparable services other than in a case under this title.” 11 U.S.C. § 330(a)(1). This Bankruptcy Code provision changes the prior practice only by permitting the going rate rather than requiring a less than usual hourly rate. In re City Planner & Developers, Inc., 5 B.R. 217, 6 B.C.D. 707, 2 C.B.C.2d 700 (Bkrtcy.D.P.R.1980). See e.g. In re Farrington Manufacturing Co., 540 F.2d 653, 657 (4th Cir. 1976); In re Dole, 244 F.Supp. 751, 754 (D.Me.1965). This does not mean the determination of the amount of compensation, while being fair and reasonable to the attorney, Rose Pass Mines v. Howard, 615 F.2d 1088, 1089 (5th Cir. 1980), does not consider the concerns of creditors, see Realty Associates Securities Corp. v. O’Connor, 295 U.S. 295, 299, 55 S.Ct. 663, 664, 79 L.Ed. 1446 (1935).

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In Re Best Pack Seafood, Inc., 21 B.R. 852, 1982 Bankr. LEXIS 3713, 9 Bankr. Ct. Dec. (CRR) 389 (Me. 1982).

21 B.R. 852 (In Re Best Pack Seafood, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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