In Re Spanjer Bros., Inc.

203 B.R. 85, 1996 Bankr. LEXIS 1664, 1996 WL 691766
United States Bankruptcy Court, N.D. Illinois·Decided November 14, 1996·No. 19-01806·Published·Cited by 18 cases

Opinion

MEMORANDUM OPINION

JOHN H. SQUIRES, Bankruptcy Judge.

These matters come before the Court on the final application of William L. Needier & Associates, Ltd. (“Needier”), attorney for Spanjer Brothers, Inc. and Letterfab, Inc. (the “Debtors”), for allowance of compensation and expense reimbursement, and on the amended application of Andrew S. Adsit (“Adsit”), as special counsel to the Debtors, for allowance of compensation and expense reimbursement. Joint objections have been filed to both applications by Richard M. Fo-gel, as Chapter 11 trustee of the Debtors’ consolidated estates (the “Trustee”) and the Official Committee of Unsecured Creditors for the consolidated estates (the “Committee”). For the reasons set forth below, the Court hereby sustains the objections in substantial part. Needier is awarded additional fees in the sum of $2,740.50 and none of the requested expenses are allowed. Adsit is awarded fees in the sum of $1,064.45 and reimbursed $10.50 for expenses.

I. JURISDICTION AND PROCEDURE

The Court has jurisdiction to entertain these matters pursuant to 28 U.S.C. § 1334 and General Rule 2.33(A) of the United States District Court for the Northern District of Illinois. These matters constitute core proceedings under 28 U.S.C. § 157(b)(2)(A) and (O).

II. FACTS AND BACKGROUND

Most of the relevant background is contained in an earlier Opinion of the Court. See In re Spanjer Bros., Inc., 191 B.R. 738 (Bankr.N.D.Ill.1996). Therein Needier was allowed certain compensation and expense reimbursement for his representation of the Debtors through August 12, 1995. Needler’s instant and final application covers the period from August 13, 1995 through July 15, 1996. See Exhibit No. 3. For such period Needier seeks an allowance of fees totaling $15,-538.75, plus expense reimbursement of $1,332.67. Id. Adsit, who was appointed special counsel and authorized by the Court to so act effective April 20, 1995, seeks fees of $5,436.25, plus expense reimbursement of $41.50 for the period from February 1, 1995 through May 25, 1995. See Exhibit Nos. 4 and 6. Needier also seeks allowance of $47,-723.51 in fees previously disallowed by the Court regarding his first interim application.

The • Trustee and the Committee jointly object to any additional allowance for Needier. They contend that neither the Committee nor the Trustee requested Needier to perform any services either for them or the Debtors during the period in question and that all other interested parties were adequately represented by other counsel. Rather, they contend that Needler’s efforts unnecessarily duplicated the Trustee’s efforts; the actions taken were not authorized; and Needier was volunteering such work, and charging excessive fees for non-legal work. They argue that none of Needler’s work had any effect on the eventual sale of the Debtors’ property or business as a going concern, and that some of his efforts were more in the nature of a business broker, rather than as an attorney. Moreover, they point out that Needler’s final application includes time charged for preparing Adsit’s original application which was so void of detail that it had to be amended. The Trustee and Committee conclude that none of Needler’s services in this application benefitted the Debtors’ consolidated estates in any way and thus the request should be entirely disallowed. .

Not surprisingly, Needier maintains that all of his services in representing the Debtors should be allowed, including that previously disallowed by the Court from the prior interim application. Notwithstanding the events leading to the appointment of the Trustee, Needier argues that the Debtors were entitled to be represented thereafter and that all his services and expenses were both reasonable and necessary.

*89 In addition, the Trastee and the Committee jointly object to Adsit’s amended final application, by which he seeks the requested compensation and expense reimbursement for his services to negotiate the sale of a certain parcel of real estate (the “Chicago Property”) in which the Debtors and certain of their insiders had various interests. The hoped for sale was to be to the Chicago Metropolitan Housing Corporation. The objectors contend that the Chicago Property was eventually sold, but not to an entity procured by Adsit. Moreover, they note that although the original retention application sought retroactive employment for Adsit dating back to January 31, 1995, the Court only authorized the retention effective as of April 20, 1995. Thus, of the total $5,436.25 in fees and $41.50 in expenses sought by Adsit, $4,031.25 and $28.00 respectively were incurred prior to April 20, 1995 and, as such, are not compensable.

Regarding the balance sought by Adsit, the objectors note that in the amended application, Adsit billed his time in inflated minimum increments of .25 hours; no lower billing rate was shown (only Adsit billed at an hourly rate of $215.00); and the only benefit to the estates demonstrated by Adsit’s amended application was his negotiation of a listing agreement with a reputable broker who was employed by the Trustee. They concede that Adsit’s two hours of time spent on that task for $430.00 was “marginally” compensable, and that should be prorated between the bankruptcy estates’ interest in the Chicago Property (allegedly 83.3844%) and the insiders’ interest therein (allegedly 16.6156%) and reduced accordingly.

Somewhat surprisingly to the Court, Needier responded for Adsit to these objections. Needier contends that Adsit’s work did assist in input for the Debtors’ plan of reorganization and disclosure statement. He argues that the Committee has not objected to the $2,500.00 retainer requested by Adsit, which the Debtors did not pay. He maintains that amount should be the minimum allowed for this application, and it should be retroactively approved to January 1, 1995, as originally requested, because the benefits should be apparent to all. According to Adsit’s supporting affidavit, as well as his testimony at trial, he met the Debtors’ shareholders, directors, and officers; suggested the Chicago Housing Authority or the Chicago Metropolitan Housing Development Corporation as prospective purchasers for the Chicago Property; prepared a presentation therefor; met with the executive director of the latter entity and a broker of the former entity in that regard; and subsequently represented the Debtors in connection with the preparation and negotiation of an exclusive listing agreement with a real estate brokerage firm toward potential sale of the Chicago Property.

An evidentiary hearing was held on November 7, 1996. These matters were thereafter taken under advisement.

III. STANDARDS APPLICABLE TO FEE APPLICATIONS

A. Compensation Allowances

Generally, professional persons seeking compensation from the estate must first be authorized to be employed under 11 U.S.C. § 327

Free access — add to your briefcase to read the full text and ask questions with AI

In Re Spanjer Bros., Inc., 203 B.R. 85, 1996 Bankr. LEXIS 1664, 1996 WL 691766 (Ill. 1996).

203 B.R. 85 (In Re Spanjer Bros., Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Untitled Case
N.D. Illinois, 2026
Untitled Case
N.D. Illinois, 2026
Untitled Case
N.D. Illinois, 2026
Untitled Case
N.D. Illinois, 2026
Untitled Case
N.D. Illinois, 2025
Untitled Case
N.D. Illinois, 2025
Untitled Case
N.D. Illinois, 2024
Untitled Case
N.D. Illinois, 2024
Untitled Case
N.D. Illinois, 2024
Untitled Case
N.D. Illinois, 2024
Untitled Case
N.D. Illinois, 2023
Untitled Case
N.D. Illinois, 2022
Untitled Case
N.D. Illinois, 2021
Joseph J Porada, Jr.
N.D. Illinois, 2020
John Tylka
N.D. Illinois, 2019
Rosebud Farm, Inc.
N.D. Illinois, 2019
In re Grasso
586 B.R. 110 (E.D. Pennsylvania, 2018)
In re Stainless Sales Corp.
583 B.R. 717 (N.D. Illinois, 2018)
In Re Borders Group, Inc.
456 B.R. 195 (S.D. New York, 2011)
Boyd v. Engman
404 B.R. 467 (W.D. Michigan, 2009)