In Re D. Diorio & Sons, Inc.

46 B.R. 648, 1985 Bankr. LEXIS 6639
CourtUnited States Bankruptcy Court, N.D. Illinois
DecidedFebruary 26, 1985
Docket19-04811
StatusPublished
Cited by7 cases

This text of 46 B.R. 648 (In Re D. Diorio & Sons, Inc.) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.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 D. Diorio & Sons, Inc., 46 B.R. 648, 1985 Bankr. LEXIS 6639 (Ill. 1985).

Opinion

MEMORANDUM AND ORDER

ROBERT L. EISEN, Bankruptcy Judge.

This matter has come before the court on the joint motion of the debtor’s counsel and co-counsel which requested the court to reconsider its order dated December 7, 1984 in which the court denied further fees pursuant to the attorneys’ Final Petition.

The petitioning attorneys have asserted in their motion that the court has determined either that services performed since the interim award were worthless or that the interim award was excessive. The petitioners suggest that a determination that the interim award constituted reasonable compensation for all services performed in this matter would deprive them due process under the United States Constitution.

For the reasons set forth in this memorandum, further compensation will be denied the petitioning attorneys.

DISCUSSION

At a hearing on final compensation, all fee matters are properly before the court. In re Callister, 673 F.2d 305, 306-07 (10th Cir.1982); In re U.N.R. Industries, 39 B.R. 190 (Bankr.N.D.Ill.1984); 2 L. King. Collier on Bankruptcy ¶ 331.03 (15th ed. 1984). It follows that the interim award may be viewed as a part of the total package of compensation to be awarded petitioning counsel. Id. Therefore, this court finds that the petitioners’ argument that the December 7 order was premised upon either the conclusion that services rendered since that time were worthless or that the interim award was excessive is without merit. The present question involves reasonable compensation for all services performed by the petitioning attorneys in this Chapter 11 case.

Similarly, the court finds no merit in the petitioners’ argument that a determination that the amount awarded under the interim request was reasonable compensation deprives them of their due process rights. A hearing was held on November 5, 1984. Time schedules had been on file with the court. Objections were heard and the petitioners had an opportunity, and did, in fact, make statements to the court. During that hearing, counsel for the Creditors’ Committee requested that the court review all fee awards. Neither petitioning attorney objected to that request in open court or suggested that such review was improper. By no stretch of the imagination were the petitioners’ due process rights violated. The fact that all fee matters are properly before the court at a hearing on final compensation further negates the argument that petitioners were somehow deprived of a property interest without proper hearing.

In its order of December 7, 1984, this court stated that its decision was premised in part upon the recommendation of the Bankruptcy Judge before whom most proceedings in this case took place. The reason for that partial reliance was that this court thought it fairer to all parties to give *650 consideration to the thoughts of a judge more thoroughly familiar with the matters. However, in view of the motion for reconsideration, this court has undertaken a complete review of the record and all documentation. The award, upon reconsideration is premised entirely upon that review, documents, and arguments of counsel.

Section 330 of the Bankruptcy Code governs compensation and provides in pertinent part:

§ 330. Compensation of officers.
(a) After notice and a hearing, and subject to sections 326, 328, and 329 of this title, the court may award to a trustee, to an examiner, to a professional person employed under section 327 or 1103 of this title, or to the debtor’s attorney—
(1) reasonable compensation for actual, necessary services rendered by such trustee, examiner, professional person, or attorney, as the case may be, and by any paraprofessional persons employed by such trustee, professional person, or attorney, as the case may be, based on the nature, the extent, and the value of such services, the time spent on such services, and the cost of comparable services other than in a case under this title; and
(2) reimbursement for actual, necessary expenses.

11 U.S.C. § 330 (West 1984).

Two approaches have involved governing the award of attorneys fees. The first approach, except for the rejection of the notion that “economizing” should govern fee awards in bankruptcy cases, is similar to the approach utilized under the Bankruptcy Act. In re Sapolin Paints, Inc., 38 B.R. 807, 810 (Bankr.E.D.N.Y.1984). The approach is premised upon analysis of several factors which include: 1) nature of the services rendered; 2) difficulties and complexities encountered; 3) time necessarily expended; 4) burden the estate can safely bear; 5) results achieved; 6) size of the estate; 7) duplication of services; 8) professional standing, ability, and éxperience of the applicant; and fairness to each applicant. The approach is very similar to that first set forth by the Fifth Circuit in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir.1974) rendered applicable to bankruptcy cases in In re First Colonial Corp. of America, 544 F.2d 1291 (5th Cir.1977). Cert. denied 431 U.S. 904, 97 S.Ct. 1696, 52 L.Ed.2d 388.

Also, frequently utilized is the “lodestar” approach which involves multiplying the number of hours reasonably expended by a reasonable hourly rate. Sapolin Paints, 38 B.R. at 810; citing Copeland v. Marshall, 641 F.2d 880 (D.C.Cir.1980). This court views the lodestar approach as the appropriate starting point, with the other factors considered where appropriate. Such a consideration beyond hours expended is particularly important in this “liquidating” Chapter 11 case where all fees paid to attorneys, in essence, come from the pockets of the unsecured creditors. Therefore, the court must review any application for compensation with an eye to achieving a result which is fair to all parties. Moreover, in this matter, the Unsecured Creditors’ Committee has objected vehemently to the amounts sought under applications for final compensation.

APPLICATION OF J. BARTON KALISH & ASSOCIATES

In the present matter, the attorneys for the debtor and debtor-in-possession seek a final award of $26,285.75. An interim award of $135,000 plus costs of $1,791.15 less the original retainer of $15,-000.00 leaving a balance of $121,791.15. For the reasons set forth herein, this court declines to award the attorneys for the debtor and debtor in possession additional compensation.

In applying the factors set forth above to the present matter, a few major areas of concern arise. One factor to be considered is the difficulty and complexity of matters.

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Bluebook (online)
46 B.R. 648, 1985 Bankr. LEXIS 6639, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-d-diorio-sons-inc-ilnb-1985.