In Re De Weldon

176 B.R. 665, 1995 Bankr. LEXIS 82, 1995 WL 31677
CourtUnited States Bankruptcy Court, D. Rhode Island
DecidedJanuary 12, 1995
DocketBankruptcy 91-10487
StatusPublished
Cited by4 cases

This text of 176 B.R. 665 (In Re De Weldon) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Rhode Island primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re De Weldon, 176 B.R. 665, 1995 Bankr. LEXIS 82, 1995 WL 31677 (R.I. 1995).

Opinion

ORDER

ARTHUR N. VOTOLATO, Bankruptcy Judge.

Heard on September 20, 1994, on the fee applications of: (1) Jason Monzack, Esq., the Chapter 7 Trustee, in the amount of $29,873, and Mr. Monzack as Trustee’s counsel, in the amount of $6,667; (2) Raymond Raiche, Accountant for the Debtor, in the amount of $2,231; (3) Bingham, Dana & Gould (“BD & G”), co-counsel for the Debtor, in the amount of $55,839 in fees and $4,109 in expenses; and (4) Murphy & Murphy (“Murphy”), co-counsel for the Debtor, in the amount of $37,852 in fees and $1,004 in expenses. Murphy also asks that we take up at this time its *667 earlier interim fee application which was allowed, on account, in the amount of 75%. The firm now seeks the remaining $7,147.

After examining the requests according to the standards applicable in this Circuit, see In re Swansea Consol. Resources, Inc., 155 B.R. 28 (Bankr.D.R.I.1993); In re Bank of New England Corp., 134 B.R. 450 (Bankr.D.Mass.1991), aff' d, 142 B.R. 584 (D.Mass.1992), it is ORDERED:

1) The applications of Jason Monzack as Chapter 7 Trustee and as Attorney for the Trustee, see 11 U.S.C. 327(d), are ALLOWED as filed.

2) The accountant for the Debtor, Raymond Raiche, uses .25 per hour minimum billing increments, rather than .10 increments. After examination of the services described within his .25 hour time charges, the request is ALLOWED in the amount of $2,100. See In re Corporacion de Servicios Medico-Hospitalarios de Fajardo, Inc., 155 B.R. 1, 2-3 (Bankr.D.P.R.1993).

3) The application of Bingham, Dana & Gould is excessive on its face, and, even without a close examination, requires a substantial downward adjustment. Additionally, however, we have done an in depth analysis, and in consideration of the objection filed by the FDIC, in which the United States Trustee has joined, we make the following observations, conclusions, and rulings.

At the outset, we address the Applicant’s argument that FDIC lacks standing to object to its fee application. It is common knowledge within the community of this case that the FDIC is, by far, the largest unsecured creditor of the Debtor, and as the holder of that undesirable distinction, FDIC clearly has standing to comment as to the merits of this, or any other application in the case. See Fed.R.Bankr.P. 2002(a)(7). This contention, which borders on being frivolous, and which casts a serious shadow on the validity of the Applicant’s remaining arguments, is rejected without further comment.

On its merits, BD & G’s application suffers from four major problems: a) lumping of tasks under a single time entry; 1 (See Exhibit A); b) excessive duplication 2 of services; see In re Yankee Seafood Corp., 53 B.R. 285, 286 (Bankr.D.R.I.1985); In re Casco Bay Lines, Inc., 25 B.R. 747, 755 (Bankr. 1st Cir.1982); (See Exhibit B); c) excessive, unnecessary, and unexplained interoffice and intra-office conferences; (See Exhibit B). These shortcomings make it difficult or nearly “impossible to evaluate the reasonableness or necessity of such services ... [and therefore,] a percentage reduction of allowable time is appropriate.” In re Smuggler’s Beach Properties, Inc., 149 B.R. 740, 745 (Bankr.D.Mass.1993); see also Swansea, 155 B.R. at 33.

Most importantly, however, the Applicant has not explained or demonstrated any quantifiable benefit to the Estate from the services in question, and certainly not of the magnitude reflected in the request. See Id. at 31. The Applicant does suggest that the basis for the liquidation conducted by the Trustee was set forth in the Chapter 11 plan which it prepared and filed. This is a difficult argument to follow. While we acknowledge the Applicant’s physical presence in the case as the liquidation was being conducted, neither in real time nor in hindsight has the Applicant shown how the estate has benefited in any way by the more than 350 hours expended by the firm. Because of our inability to evaluate the reasonableness, the necessity, or the value of the services as described by the Applicant, we do the best we can with what we have. See Swansea, 155 B.R. at 33; *668 In re Smuggler’s Beach, 149 B.R. at 745. “The Court ... may consider its own knowledge and experience concerning reasonable and proper fees and may form an independent judgment either with or without the aid of testimony of witnesses as to value.” In re WHET, Inc., 61 B.R. 709, 713 (Bankr.D.Mass.1986). Based on our familiarity with this case, as well as this Court’s general experience in reviewing fee applications, we find that a forty-five percent overall reduction is appropriate, and that such a reduction allows the Applicant the benefit of many doubts.

Additional problems with this application include the following: The request includes 7.5 hours for “estimated additional time.” Compensation for professional services is not due until such services are actually performed, and evaluated, and this item is therefore disallowed. See 11 U.S.C. § 330(a)(1). The Applicant.also seeks reimbursement of 31.1 hours for services performed by summer associates, at the rate of $90 per hour. In this instance we agree with Judge Hillman who said in In re Bank of New England, “it will not permit the time of summer associates or interns, however described, to be charged to an estate ... [because] such employees do not provide enough value to the work performed by the firm to justify allowances.” Id. at 455.

Regarding expenses, and applying the standards set forth in In re 321 S. Main Street, L.P., 155 B.R. 41 (Bankr.D.R.I.1993), and In re Bank of New England, 134 B.R. 450, we find that:

(a) $572.38 for messengers and Federal Express is disallowed, as the Applicant has not described or explained why such expenses were “required by orders of notice or other deadlines not capable of less expensive satisfaction.” Id. at 458; see also 321 S. Main, 155 B.R. at 43;

(b) $175.30 for travel to Rhode Island is disallowed, as it is completely lacking in detail; see In re Bank of New England, 134 B.R. at 454;

(c) $771.45 for computer expenses including personnel time, supplies, and maintenance is disallowed because such expenses are clearly in the nature of overhead. See 321 S. Main, 155 B.R. at 43; and

(d) $337.50 for “secretarial overtime” is unexplained and unjustified as an exception to being categorized as office overhead. See Id.

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Bluebook (online)
176 B.R. 665, 1995 Bankr. LEXIS 82, 1995 WL 31677, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-de-weldon-rib-1995.