In re Le Papillion, Inc.

94 B.R. 1, 1988 WL 132317
CourtDistrict Court, District of Columbia
DecidedOctober 7, 1988
DocketCiv. A. No. 88-0062-LFO
StatusPublished

This text of 94 B.R. 1 (In re Le Papillion, Inc.) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Le Papillion, Inc., 94 B.R. 1, 1988 WL 132317 (D.D.C. 1988).

Opinion

ORDER

OBERDORFER, District Judge.

This is an appeal from orders of the Bankruptcy Judge awarding fees and reimbursement for expenses to the Trustee for his services as Trustee and for legal services in this case. Appellant raises procedural and substantive issues.

As to procedure, appellant complains that he was not afforded a hearing on his objections to the awards sought by the Trustee. However, the record indicates that on numerous occasions in 1986, the Bankruptcy Court entertained and acted on applications by the Trustee for interim fee awards. An Appendix filed by appellee records three filings by or on behalf of appellant in opposition to these applications.

In January 1987, the debtor corporations had resumed possession of the former bankrupt estates. In June 1987, the Trustee applied for a final award. On July 21, 1987, the debtor corporations, by their counsel, and Yves Courbois, as president and sole shareholder of the debtor corporations by his separate counsel, filed objections to the Trustee’s application for final payment. Appendix at 28, 31. Neither objection stated any specific objection to the application. The Courbois’ filing requested a hearing.

On August 18, 1987, the Bankruptcy Judge scheduled for September 8, 1987, a hearing on “Application for Approval of Payment of Counsel’s Fees and Costs and Trustee’s Fees and Objections filed thereto by” Courbois, the debtor corporations, and the Internal Revenue Service.

Neither Courbois nor his counsel appeared on September 8, 1987. The record indicates that Courbois’ counsel, Mr. Schwatzbach, was on vacation. Appendix at 60-61. Nevertheless, those present led by Mr. Seeber, counsel for corporate debtor (now back in possession), came close to negotiating a settlement. The proceeding was adjourned until September 10, 1987, so that Courbois’ counsel could be present. Appendix at 61-63. Courbois and his coun[2]*2sel did, in fact, appear at the September 10 hearing. Appendix at 80. At that time counsel were completely free to conduct an eyidentiary hearing. They requested none. Instead, a settlement was worked out, virtually in the presence of the Bankruptcy Court.

After encouragement from the Bankruptcy Judge, the parties present in court, including Courbois and his counsel, resumed the settlement negotiations which had nearly been concluded on September 8, including particularly compensation for the Trustee. After several recesses for telephone conferences between counsel present in court and clients who were elsewhere, Mr. Seeber announced a settlement, including particularly a settlement of appellee’s claim for fees. Appendix at 83, 84. Following this announcement, Mr. Seeber stated on the record:

And I would further state that Mr. Cor-boi [sic], individually, who was an objector is here in the courtroom with counsel and subscribes to that resolution.

Appendix at 85. To this, Courbois’ counsel responded, also in open court,

Your Honor, Mr. Seeber certainly has correctly set forth our agreement. We are, obviously, happy we could get the matter resolved.

Appendix at 86. Finally, the following colloquy occurred between the court and appellant’s counsel:

THE COURT: Very well. Now, Mr. Schwartzback [sic], could you address the Court?
MR. SCHWARTZBACK [sic]: Certainly, Your Honor.
THE COURT: You have heard what Mr. Seeber and Mr. Gordon and Mr. Red-mon had to say. Do you wish to add anything?
MR. SCHWARTZBACK [sic]: I wish to add nothing, Your Honor.
THE COURT: So their statements accurately represent your understanding of the agreements that have been made?
MR. SCHWARTZBACK [sic]: They do.
THE COURT: Thank you.
MR. SCHWARTZBACK [sic]: Thank you.
THE COURT: Mr. Early, do you wish to be heard?
MR. EARLY: No, Your Honor.
THE COURT: Now, Mr. Corboi [sic], you have heard what has been said. Do you understand?
MR. CORBOI [sic]: Yes, I do.
THE COURT: This is your agreement as well as the agreement of the three corporations?
MR. SCHWARTZBACK [sic]: Well, I don’t know that it is his agreement, now, Your Honor. He objects. He objected to the trustee’s fees which is assessable to the corporations.
THE COURT: Well, is he withdrawing his objection? Is he, as part of this agreement, withdrawing his objection?
MR. SCHWARTZBACK [sic]: I thought I made that clear when I addressed the Court and said that I, on behalf of Mr. Corboi [sic], restate what counsel has already told the Court.
THE COURT: I see. Very well. That was the only sense that I meant when I was asking Mr. Corboi [sic], was this his agreement.
MR. SCHWARTZBACK [sic]: I just don’t want—
THE COURT: Does he understand that this is the agreement that had been reached and is he going to abide by it?
MR. SCHWARTZBACK [sic]: Well, I think that is the corporations abiding by it, Your Honor, within the plan itself. This is not Mr. Corboi’s [sic] personal obligation.
THE COURT: I understand that, Mr. Schwartzback [sic]. I don’t want to get into all of this debate through an argument with you. But I simply want to clarify that Mr. Corboi [sic] understands that he is withdrawing his objection to Mr. Redmon’s claim in so far as that is reflected in the agreement that has been stated in open court.
MR. SCHWARTZBACK [sic]: And that is your understanding and agreement, is it not, Mr. Corboi [sic], as the Judge has presented it?
MR. CORBOI [sic]: Yes, it is.
[3]*3MR. SCHWARTZBACK [sic]: Yes, it is, Your Honor.
THE COURT: Wonderful. I am glad to know that we are all in agreement in so far as the agreement has been reached, as stated in open court, and I hope that the Internal Revenue Service and the three corporations and Mr. Cor-boi [sic] and Mr. Redmon and all are able to resolve the remaining differences related to the funds that may be payable to the Internal Revenue Service as well.
Thank you all.

Appendix at 89-91.

Despite the foregoing commitment, Courbois through his counsel subsequently refused to sign a proposed order that would have executed the open court agreement. Claiming discovery of tax deficiencies after agreement to the settlement, Courbois’s counsel served an opposition to it. On November 30, 1988, after considering these objections, the Bankruptcy Judge entered an order that awarded to appellee fees that were less than those agreed upon at the settlement, but acceptable to appel-lee. Appendix at 101-02. It is apparent from the face of the foregoing record that Courbois had ample opportunity to present his objections to the Bankruptcy Judge and exercised those opportunities by filing objections to applications for interim and final payments, and by pleadings and letters to the Bankruptcy Judge.

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