In Re Chellino

209 B.R. 106, 1996 Bankr. LEXIS 1842, 1996 WL 899371
CourtUnited States Bankruptcy Court, C.D. Illinois
DecidedDecember 27, 1996
Docket19-90043
StatusPublished
Cited by8 cases

This text of 209 B.R. 106 (In Re Chellino) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, C.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Chellino, 209 B.R. 106, 1996 Bankr. LEXIS 1842, 1996 WL 899371 (Ill. 1996).

Opinion

OPINION

GERALD D. FINES, Bankruptcy Judge.

These matters are before the Court on a Motion to Review Compensation of Debtor’s Attorney Pursuant to Section 329 filed by the Case Trustee in In re Chellino, Case No. 96-90941,- and upon a Motion to Show Cause filed' by the U.S. Trustee in the other eleven cases captioned above. For the purpose of this Opinion, these cases have been consolidated in that the issue before the Court is the same in each case as are the interested parties.

The issue before the Court is whether the fees charged by Debtors’ Counsel, Peter F. Geraci, in each of the above-captioned cases, exceeds the reasonable value of the services actually performed such that Debtor’s Counsel should be required to return a portion of said fees to Debtors or their respective bankruptcy estates. 1

*109 The controversy presently before the Court originated with the filing of a Motion by the Case Trustee in In re Chellino, Case No. 96-90941, on August 20, 1996, wherein the Case Trustee requested this Court to review fees charged by Debtors’ Counsel to determine if they were excessive. 2 The Trustee’s Motion in Chellino was set for hearing on September 5, 1996, and, on that date, Case Trustee, John Maloney, appeared on his own behalf and attorney Steven Diamond appeared on behalf of Mr. Geraci’s law firm and Sabrina Petesch appeared on behalf of the U.S. Trustee. Arguments of the parties were heard on September 5, 1996, in Chellino, and the Court was advised by the U.S. Trustee’s Office that it had just filed eleven Motions to Show Cause raising the same issue before the Court in Chellino in eleven other cases where debtors were also represented by the law firm of Peter F. Geraei. The Court determined that all twelve matters, including Chellino, should be heard together and, therefore, issued an identical Order in all twelve cases, on September 13, 1996, wherein Debtors’ Counsel was ordered to:

[Sjubmit a detailed, written fee itemization setting forth the services for which counsel requests compensation, and specifically detailing time spent in Court for and on behalf of the Debtor(s).

The September 13, 1996, Order set November 8,1996, as a deadline for the filing of the fee itemization with a further hearing being scheduled on the matter for November 14, 1996.

I. Applicant’s Response

On September 23, 1996, in Chellino, and September 25, 1996, in the other eleven cases, Debtors’ Counsel filed identical pleadings entitled “Debtors’ Attorneys’ Response to Motion of United States Trustee’s Motion to Show Cause” and “Affidavit in Support of Response to Trustee’s Motion to Show Cause Regarding Fees.” 3 3 The main thrust of the Response filed by Debtors’ Counsel was that the fees considered reasonable today by Mr. Maloney, the Case Trustee, and the U.S. Trustee may have been reasonable in 1974, but they aren’t reasonable now. Debtors’ Counsel further .stated that:

Completing a time itemization to prove the reasonableness of the fee charged is not indicated or authorized and would have no bearing on the reasonableness requirement. 4

Debtors’ Counsel concluded his Response by praying for an order:

[F]or a Rule to Show Cause why the United States Trustee, M. Scott Michel, and Sabrina Petesch, attorney for the U.S. Trustee should not be held in contempt of Court for attempting to fix prices for consumer bankruptcy, and foster unfair competition, and for Rule 11 sanctions. 5

Evidently, Debtors’ Counsel did not feel fully vindicated by his assertions and allegations filed in his Response, on September 23 and 25, 1996, in fight of his additional remarks included in the Affidavit attached to the Response. In an effort to convince the Court that the fees at issue are justified and reasonable, Debtors’ Counsel makes nineteen numbered statements, some of which merit a brief discussion here.

In paragraph No. 1 of the Affidavit, Mr. Geraei states: “My law firm is chosen by more debtors than any other law firm in the world, to represent them in consumer bankruptcy eases.” The Court notes that it has no way of knowing whether this representation is based in fact or not, but it is able to *110 conclude that, regardless of the veracity of the statement, it does not serve to support or substantiate the fees requested by Debtors’ Counsel.

At paragraph No. 4 of the Affidavit, Mr. Geraci states:

The fee charged in this case is no more than I have routinely charged in thousands of cases in the last 4 years, and is based on a flat fee for services through discharge in the case. The trustee’s attempt to trivialize this case shows no understanding of consumer bankruptcy law and is contemptuous of the Court.

As for the first sentence of this statement, the Court can only review the quality of the legal work in the eases before it. The comment about the Trustee’s lack of understanding of consumer bankruptcy law and that the U.S. Trustee should be held in contempt of Court is without any merit or support. In over nine years, this Court has had the opportunity to view the work of Trustee Maloney and various attorneys from the U.S. Trustee’s Office in hundreds of eases, and their work has always been knowledgeable and competent, as it has been in the cases presently before the Court.

In paragraph No. 5 of his Affidavit, Mr. Geraci seeks to justify his fees by comparing them to filing fees, with the conclusion that, had his fees kept pace with the increases in filing fees, he would be charging $2,400 to $4,800 in “simple” cases. The comparison suggested by Mr. Geraci is illogical and wholly irrelevant to the issue at bar. Mr. Geraci attempts a similar comparison in paragraph No. 6 between his fees and trustees’ fees, which is no more logical or relevant than a comparison of attorney fees and filing fees.

At paragraph No. 7, Mr. Geraci touts that he is “the unquestioned foremost consumer bankruptcy practitioner in the country.” Mr. Geraci further says that:

I do not and have never billed my clients on an hourly basis. I consider hourly billing to be fraudulent in most cases and apparently the Bankruptcy Code as well as 11 U.S.C. § 701 does not recognize “The Lodestar Analysis” as the correct measure in determining reasonableness of fees. 6

Here again, the Court has been given no basis other than Mr. Geraci’s word that he is the “unquestioned foremost consumer bankruptcy practitioner in the country,” but that status is not exemplified by the work product of his law firm in the cases now before the Court and on the particular issue at bar. As for Mr.

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Cite This Page — Counsel Stack

Bluebook (online)
209 B.R. 106, 1996 Bankr. LEXIS 1842, 1996 WL 899371, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-chellino-ilcb-1996.