In Re Bonds Lucky Foods, Inc., No. 1

76 B.R. 664, 1986 Bankr. LEXIS 6065
CourtUnited States Bankruptcy Court, E.D. Arkansas
DecidedMay 13, 1986
DocketBankruptcy HE 85-10M
StatusPublished
Cited by15 cases

This text of 76 B.R. 664 (In Re Bonds Lucky Foods, Inc., No. 1) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Bonds Lucky Foods, Inc., No. 1, 76 B.R. 664, 1986 Bankr. LEXIS 6065 (Ark. 1986).

Opinion

MEMORANDUM OPINION

JAMES G. MIXON, Bankruptcy Judge.

On February 15, 1985, Bonds Lucky Foods, Inc., No. 1 and Bonds Lucky Foods, Inc., No. 2 filed voluntary petitions for relief under the provisions of Chapter 11. On March 18, 1985, an Order was entered authorizing the employment of the law firm of Mitchell, Williams, Selig, Jackson & Tucker (Mitchell Law Firm) as attorneys for both estates. On April 30, 1985, an Order was entered allowing the cases to be jointly administered under Case No. HE 85-10M. A consolidated plan of reorganization was filed on July 30, 1985. All classes of creditors in both cases voted to accept the plan, and on January 28, 1986, a substantively consolidated plan of reorganization was confirmed in both cases.

Counsel for the debtors have now applied for an award of interim compensation pursuant to 11 U.S.C. § 331. The application *666 requests an attorneys fee of $24,961.00 for services rendered from February 1, 1985, through December 31,1985, and reimbursement of expenses in the sum of $4,461.90, totaling $29,422.90.

On February 24, 1986, a hearing was held on the application for attorneys’ fees and expenses. There were no objections to the fee request. The Court questioned counsel concerning various charges shown on the itemization. At the request of counsel, the Court took the fee request under advisement pending receipt of a brief; however, no brief has been filed.

The burden of proof as to the reasonableness of requested compensation is that of the applicant. In re Crutcher Transfer Line, Inc., 20 B.R. 705 (Bkrtcy. W.D.Ky.1982). In re Werth, 32 B.R. 442 (Bkrtcy.D.Colo.1983); Matter of Liberal Market, Inc., 24 B.R. 653 (Bkrtcy.Ohio 1982). Counsel for a debtor-in-possession has a responsibility to keep costs to the estate at a minimum. In re Werth, 32 B.R. at 442; Arlan’s Dept. Stores, Inc., 462 F.Supp. 1255 (D.C.N.Y.1978), aff'd, 615 F.2d 925 (2nd Cir.1979); In re Lafayette Radio Electronics Corp., 16 B.R. 360 (Bkrtcy.E.D.N.Y.1982). In addition to any objection voiced by a party in interest, the court has an independent duty to investigate the reasonableness of compensation. Bankruptcy Rule of Procedure 2016(a); In re Thomas, Inc., 43 B.R. 510 (Bkrtcy.D. Mass.1984); In re Bolton, 43 B.R. 598 (Bkrtcy.E.D.N.Y.1984).

11 U.S.C. § 331 authorizes payment of interim compensation. Compensation in bankruptcy cases is governed by 11 U.S.C. § 330 which provides generally that after notice and a hearing, the court may award to an attorney employed under 11 U.S.C. § 1103 reasonable compensation for actual and necessary services rendered by the attorney based upon the time, the nature, the extent and the value of the services and the cost of comparable services other than in bankruptcy cases.

Many courts consider the enumerated factors in Johnson v. Georgia Hwy. Express, Inc., 488 F.2d 714 (5th Cir.1974). The elements are:

Novelty and difficulty of the question;
The skill required to perform the legal service properly;
The experience, reputation and ability of the attorneys;
Customary fee;
Whether the fee is fixed or contingent;
The preclusion of other employment by the attorney due to acceptance of the case;
7. The amount involved and the results obtained;
8. Time limitations imposed by the client or circumstances;
9. The undesirability of the case;
10. The nature and length of the professional relationship with the client;
11. Awards in similar cases; and
12. Time and labor required.

In re Werth, 32 B.R. at 442; In re Global International Airways Corp., 38 B.R. 440 (Bkrtcy.W.D.Mo.1984); In re Garnas, 40 B.R. 140 (Bkrtcy.D.N.D.1984); See also Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983); Blum v. Stenson, 465 U.S. 886, 104 S.Ct. 1541, 79 L.Ed.2d 891 (1984); Cleverly v. Western Electric Co., 594 F.2d 638 (8th Cir.1979).

A review of the fee application in light of the fee standards of Johnson must be made. This case did not involve any novel or difficult questions of law, but it did require the skill of attorneys experienced in bankruptcy. The attorneys involved in this case are experienced bankruptcy practitioners. Hon. James E. Smith, Jr., and Hon. Susan Gunter account for most of the attorney time charged. The hourly rates charged were $100.00 for Mr. Smith and $90.00 for Ms. Gunter. Their rates are reasonable and are customary charges for experienced bankruptcy attorneys in this area for the type of services performed. The award sought is based on a lodestar computation which is a customary basis for awards in similar cases. There is nothing about this case that would cause a preclusion of other employment. The amount of *667 property involved was substantial, and the result obtained was a successful confirmation of the debtors’ plan. There existed no apparent time limitations imposed on counsel in this bankruptcy case. There was no evidence that this case was an undesirable case for the bankruptcy practitioner. Likewise, the Court is unaware of any extended representation of the debtors by the Mitchell Law Firm prior to the bankruptcy filing.

The time and labor expended in a case of this size and difficulty are excessive. There were no contested matters or adversary proceedings filed against the debtors in this case. Virtually all hearings and court appearances were undisputed or settled matters.

Included in the attorneys’ fee and expense request of $29,422.90 are charges for professional services performed by Barbara Mills, Pat Jones, an unnamed paralegal, law clerks and messengers in the total sum of $9,996.00. The following is a breakdown of the nonattorney time which is included in the attorneys’ fee request:

Law Clerk/ Paralegal/ Messenger Hours Rate Total
Law Clerk 165 11.70 $30.00 $ 351.00
Law Clerk 55 36.90 30.00 1,107.00

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Bluebook (online)
76 B.R. 664, 1986 Bankr. LEXIS 6065, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-bonds-lucky-foods-inc-no-1-areb-1986.