In re Khan's Corp.

184 B.R. 398, 1995 Bankr. LEXIS 1027, 1995 WL 441598
CourtUnited States Bankruptcy Court, S.D. Florida.
DecidedJuly 24, 1995
DocketBankruptcy No. 93-33282-BKC-SHF
StatusPublished

This text of 184 B.R. 398 (In re Khan's Corp.) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, S.D. Florida. primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Khan's Corp., 184 B.R. 398, 1995 Bankr. LEXIS 1027, 1995 WL 441598 (Fla. 1995).

Opinion

ORDER ALLOWING FEES

STEVEN H. FRIEDMAN, Bankruptcy Judge.

After notice to all creditors, this Court has examined all pending fee applications filed in this ease. The Court has considered these applications and finds that the following allowances are reasonable.

The Court finds that reasonable compensation for Soneet Kapila, Trustee, (“Trustee”) is $1,417.06 plus expenses of $1.85.

The Court finds that reasonable compensation for Soneet Kapila, Accountant for Trustee, is $1,442.80 plus expenses of $7.77.

The Court finds that reasonable compensation for Rodolpho Pittaluga, Jr., Attorney for Trustee (“Applicant”), is $8,400.00 plus expenses of $537.23.

The Trustee is authorized and directed to pay the foregoing sums and shall pay to the Clerk of the Court $2.00 for special charges.

The foregoing fee awards to the Trustee and to Soneet Kapila as Accountant for the Trustee are for the amounts requested by Mr. Kapila in his respective fee applications, and are warranted without further comment. However, the fee award to Applicant is for an amount representing approximately 40 percent of the $22,500.00 fee requested by said Applicant. This Court has carefully analyzed the history of this case and the services rendered by Applicant, and offers the following explanation as to the reduction of Applicant’s fee request.

This ease was commenced on September 30,1993 with the filing of the Debtor’s voluntary chapter 7 petition. The Applicant was appointed pursuant to order of this Court dated November 10,1993. In his application, Applicant seeks compensation for 177.4 hours of time expended by him and members of his firm, for an average hourly rate of $126.83.1 Of the referenced time expenditure, approximately 66 hours were expended by Applicant, approximately 100 hours were expended by an associate attorney, and approximately 12 hours were expended by three individuals delineated as “para-professionals”.

The Debtor operated two Precision Tune auto care franchises, located in Boca Raton and Boynton Beach, Florida. The tangible personal property of this estate was valued by the Debtor at approximately $78,000.00, and the intangible property of the estate, consisting of the two Precision Tune franchises, was valued at $50,000.00. The Debtor listed no secured creditors of any consequence, and no secured claims have been asserted or allowed.

Virtually all of the $41,235.17 in funds administered by the Trustee were generated from the Trustee’s sale of two Precision Tune franchises and related assets to one James Radcliffe for $40,000.00, which sale was approved by this Court on December 27, 1993. Based upon the Court’s review of the record, including the time entries of Applicant, it appears that the purchaser for the estate’s assets was procured with little effort expended by Applicant. The Court does not question the competency exhibited either by the Trustee or Applicant in expending efforts to consummate the sale of assets.

Rather, this Court harbors serious reservations as to the efficiency exhibited by the Applicant in performing legal services on behalf of the Trustee. During the course of [400]*400this case, only three motions requiring hearings were set before this Court:

1. Motion to Compel Trustee to Assume or Reject Executory Contract, to Pay Post-Petition Administrative Rental, or to Surrender Premises, filed by Auto Care Associates;
2. Motion for Order to Show Cause why property of the Estate should not be Sold Free and Clear of Liens, filed by the Trustee;
3. Motion to Compel Payment of Administrative Rent, filed by Gilbert and Rochelle Steinman.

None of these motions was seriously contested. No adversary proceedings emanated from this bankruptcy proceeding, and the other motions filed in this case were routinely administered without hearings. Notwithstanding the apparent lack of complexity as to the disposition of the estate’s assets, the Applicant and associates expended no less than 38.8 hours in telephone conferences. The Applicant expended an additional 8.4 hours in the review (not preparation) of documents and motions, 7.5 hours in the drafting of correspondence, and 4.6 hours in the review of correspondence. Numerous of Applicant’s time entries are excessive. For example, the December 28,1993 time entry by the Applicant reads as follows:

Review telecopies, correspondence, bill of sale, etc., telephone calls to and telephone conferences with Kapila, Dayal, Boyd & Hibberd regarding sale of assets, above, etc. — 5.10 hours.

This Court simply cannot believe that it would take an experienced attorney such as Applicant 5.1 hours to read a few documents and place a few phone calls. Similar instances of inflated time entries are evident in the time records for Applicant’s associate. For example, the entry of February 4,1994 reads as follows:

Review letter and checks from Trustee to Landlord for Administrative rent; Return call to Mr. Berson; Call Mare Pollack; Call to Mark Boyd regarding above — 1.30 hours.

The referenced time entry is particularly troubling to this Court, in that Applicant’s associate seeks to charge this estate for examining a check received from the Trustee representing payment of administrative rental due to Auto Care Associates for $7,500.00, pursuant to this Court’s agreed order dated December 15, 1993. Essentially, Applicant’s associate seeks to charge this estate roughly $160.00 to transmit a check received from the Trustee, to the Debtor’s landlord.

Another instance of excessive billing is evidenced by Applicant’s charges for the preparation of a notice of abandonment with regard to personal property located at the Boynton Beach facility formerly operated by the Debtor. Applicant expended ninth-tenths of one hour on January 17, 1994 to prepare a notice of abandonment and an additional three-tenths of one hour on January 25, 1994 to review the notice of abandonment. The Court recognizes that an expenditure of 1.2 hours in the preparation of such documentation, at a cost to the estate of approximately $150.00, would normally be characterized as modest. However, the Trustee did not file a notice of abandonment in this estate. Thus, Applicant’s counsel seeks to be compensated for the preparation of documents which were never utilized or needed.

This Court sees no purpose in pinpointing additional time entries which the Court deems excessive or wasteful, although there are numerous such entries. Rather, the Court turns its attention to an analysis of the services provided by Trustee’s counsel which were of benefit to the estate and for which the Applicant should be compensated. As to the services rendered by Applicant relating to the lease agreement between the Debtor and Auto Care Associates, including disposition of the landlord’s Motion to Compel Trustee to Assume or Reject Contract, etc., the Court estimates that the maximum amount of time which should have been expended on matters relating to the foregoing would equal 15 hours, consisting of 3 hours expended by the Applicant (at $175.00 an hour) and 12 hours expended by Applicant’s associate (at $150.00 an hour). As to the services rendered by Applicant relating to the sale of the Debtor’s assets and franchise rights including the attendance of the De-[401]

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Cite This Page — Counsel Stack

Bluebook (online)
184 B.R. 398, 1995 Bankr. LEXIS 1027, 1995 WL 441598, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-khans-corp-flsb-1995.