Matter of Caribou Partnership III

152 B.R. 733, 1993 Bankr. LEXIS 549, 1993 WL 103704
CourtUnited States Bankruptcy Court, N.D. Indiana
DecidedMarch 10, 1993
Docket14-22510
StatusPublished
Cited by7 cases

This text of 152 B.R. 733 (Matter of Caribou Partnership III) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Matter of Caribou Partnership III, 152 B.R. 733, 1993 Bankr. LEXIS 549, 1993 WL 103704 (Ind. 1993).

Opinion

MEMORANDUM OF DECISION

HARRY C. DEES, Jr., Bankruptcy Judge,

On June 12, 1992, Howard B. Sandler (“Sandler”), co-counsel for the debtor, filed his AMENDED FINAL APPLICATION FOR COMPENSATION AND REIMBURSEMENT OF EXPENSES FOR THE PERIOD OF JULY 1, 1991 THROUGH MAY 12,1992. Fort Wayne National Bank (“National”) filed its objection to Sandler’s *735 amended application on September 2, 1992. The court held a hearing on the amended application and objection on November 17, 1992, and took the matter under advisement on January 7, 1993, following the time allowed for submitting briefs.

Jurisdiction

Pursuant to 28 U.S.C. § 157(a) and Northern District of Indiana General Rule 45, the United States District Court for the Northern District of Indiana has referred this case to this court for hearing and determination. After reviewing the record, the court determines that the matter before it is a core proceeding within the meaning of § 157(b)(2)(A) over which this court has jurisdiction pursuant to 28 U.S.C. §§ 157(b)(1) and 1334. This entry shall serve as findings of fact and conclusions of law as required by Federal Rule of Civil Procedure 52, made applicable in this proceeding by Federal Rules of Bankruptcy Procedure 7052 and 9014.

Background

Caribou Partnership III, a/k/a Caribou Group III, filed its petition under Chapter 11 of the Bankruptcy Code on December 11, 1990. On the same date related partnerships, Caribou Partnership II and Caribou Partnership IV, filed their petitions under Chapter 11. Each of the debtors is a general partnership with two general partners, James E. Harding and Richard L. Phillips. The debtors’ primary assets are three office buildings located on North Meridian Street in Indianapolis, Indiana. The court appointed Sandler as counsel for the debtors on February 8, 1991. On February 24, 1992, the court entered its order dismissing this case with the court retaining jurisdiction to determine appropriate fees and expenses of the debtor’s counsel.

In his final application Sandler sought compensation in the amount of $13,278.50 and reimbursement of expenses in the amount of $401.35 for services rendered from July 1, 1991, through May 12, 1992. Sandler indicated that his law firm used two of its lawyers to perform services required in the case, used Federal Express or similar overnight air carriers, and sought reimbursement for the travel time of its attorneys at the full applicable rate. San-dler noted that on his motion to reconsider the court’s order of March 9, 1992, the court approved these exceptions to its general guidelines for fee applications by its order of April 15, 1992. Sandler asked the court to review and consider the application of the Seventh Circuit’s recent opinion in Steinlauf v. Continental Illinois Corp. (In re Continental Illinois Securities Litigation), 962 F.2d 566 (7th Cir.1992), to this case. Pursuant to Continental Illinois, Sandler requested a “payment of an additional $3,104.61, plus an additional $135.20 per month for each month after May 15, 1992 that [his] fees remain unpaid, as interest for late payment charged at Applicant’s customary market rate of 12%.” Sandler’s application at 4.

National objected to Sandler’s application, alleging that the fees requested are excessive, do not comply with the court’s guidelines regarding fee requests, and are duplicative. National submitted that San-dler’s services did not benefit the debtor’s estate as 11 U.S.C. § 503(b)(4) requires, but benefitted only the debtor’s principals. National thus asked the court to deny San-dler’s application. Finally, National argued that after the state court’s grant of summary judgment in favor of National against the debtor’s principals on certain guarantees on July 15, 1991, “it was apparent that the Debtor would be unable to effectuate a plan of reorganization, and therefore, the services rendered thereafter were not of actual and demonstrable benefit to the estate.” National’s brief at 2.

In response to National’s objection San-dler filed his supplemental affidavit which stated in relevant part:

4. [Sandler] is seeking compensation for services and expenses for which it would expect to be and is compensated for by its non-bankruptcy clients and bankruptcy clients where the payments of fees is not reviewed by the bankruptcy court at [Sandler’s] usual and customary rate.
5. All services performed were necessary for the competent representation of *736 the client, or required by the Bankruptcy Code and Rules....
6. The hourly rates charged by [San-dler] during the timeframe covered by the Final Application are market rates, i.e., those rates that [Sandler] receives from its non-bankruptcy clients and bankruptcy clients where the payments of fees is not reviewed by the bankruptcy court.
7. [Sandler] charges all its clients, including its non-bankruptcy clients, for supervision of mass-mailings and these clients pay [Sandler] for this service.
8. [Sandler] charges all its clients, including its non-bankruptcy clients, for interoffice conferences and these clients pay [Sandler] for this service.
9. [Sandler] charges all its clients, including its non-bankruptcy clients, 100% of travel time for travel outside of Allen County that is associated with the representation of the clients and these clients pay [Sandler] for this service.
10. [Sandler’s] Final Application for services rendered is from July 1, 1991 through May 12, 1992, which is from 6 to 16 months ago. [Sandler] customarily seeks and receives interest on past due accounts (over 45 days) at a rate of 12% per annum. Accordingly, interest on these overdue accounts ... is appropriate.
11. During the timeframe for which compensation is sought, the individual partners of the Debtor used independent counsel for negotiation with [National], [Sandler’s] function during this time-frame was exclusively as counsel for Debtor.
12. During the timeframe for which compensation is sought, [Sandler] as Debtor’s counsel, the partners of Debtor, and their respective counsel discussed and analyzed many different proposals to attempt to reorganize the Debtor. However, the partners decided that the real estate owned by the partnership would be turned over to [National] and the [sic] each partner would directly negotiate with [National] with respect to guarantees.

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Bluebook (online)
152 B.R. 733, 1993 Bankr. LEXIS 549, 1993 WL 103704, Counsel Stack Legal Research, https://law.counselstack.com/opinion/matter-of-caribou-partnership-iii-innb-1993.