Matter of Plunkett

60 B.R. 290, 1986 Bankr. LEXIS 6182
CourtUnited States Bankruptcy Court, S.D. New York
DecidedApril 25, 1986
Docket19-10217
StatusPublished
Cited by7 cases

This text of 60 B.R. 290 (Matter of Plunkett) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Matter of Plunkett, 60 B.R. 290, 1986 Bankr. LEXIS 6182 (N.Y. 1986).

Opinion

MEMORANDUM DECISION AND FINAL APPLICATION FOR ALLOWANCE

PRUDENCE B. ABRAM, Bankruptcy Judge:

The final meeting in this Chapter 7 case was held on February 3,1986. The Debtor, Edward Carlos Plunkett, filed his Chapter 7 petition on September 6, 1983. His schedules, filed ten days later, reflect unsecured indebtedness of $360,600.20 to eight creditors and secured indebtedness of up to $230,000 to two creditors. Mr. Plunkett’s scheduled assets included an undivided interest in two cooperative apartments located in New York City with an estimated market value of $375,000, an undivided interest in a future interest in a piece of land in Brazil. The schedules state that Mr. Plunkett is an income beneficiary under a British trust from which he is estimated to receive $3,000 per month.

Gregory Messer was appointed as the Trustee. His final report reflects total receipts of $411,092.81, disbursements of $348,359.62 and a balance on hand of $62,-733.19. Of the receipts, $400,000 came from the sale of the two cooperative apartments. The disbursements include $260,-354.27 paid to Gloria Plunkett, the Debtor's former wife in settlement of litigation relative to ownership of the two apartments; $42,613.23 paid to the cooperative corporation for maintenance arrears and settlement of litigation involving violations of the proprietary leases for the apartments; and $25,000 paid to Aimee de Heeren, the Debtor’s aunt, in settlement of litigation respecting an asserted pledge of the cooperative shares. The three settlements followed substantial litigation. The litigation with the cooperative corporation had been going on for several years. It appears that after purchasing the apartments the Plunk-etts had embarked on a renovation project relative to the two apartments that failed to be completed in a timely fashion or in accordance with expectations and created, *292 in the cooperative’s view, a substantial nuisance and violations of the proprietary lease. Indeed, at the time the petition was filed, the cooperative had a judgment of possession in its favor dated November 27, 1981.

The Trustee requests commissions of $5,090.92, the statutory maximum and fees as his own attorney of $14,595 for 145.95 hours of services ($100 per hour). The U.S. Trustee has filed a statement that these fee requests are reasonable from an administrative point of view. The time spent as attorney required legal services not reasonably required of a trustee. The outcome of the case must be considered excellent even though the remaining distribution to unsecured creditors will be small because the Trustee was able to salvage the apartments and sell them at good prices and pay down substantial claims out of the proceeds. No separate time log for services expended as Trustee has been submitted. It is noted, however, that the time log submitted as counsel does not include time charges for such things as viewing the premises and meeting with brokers, services which the Trustee in fact performed. In light of the very reasonable hourly rate, the excellent result obtained and the quality of the services rendered, the court will award the full commissions and attorney’s fees requested by Mr. Mes-ser.

Sonia V. Col, the attorney for the Debtor, has filed an application seeking an allowance of $17,296.25, less a $300 retainer, for 170.5 hours. Ms. Col billed her services at $90 per hour in 1983; $110 an hour in 1984; and $125 an hour in 1985. Ms. Col attaches a retainer agreement dated August 30, 1983 in which Mr. Plunkett agreed to pay her on an hourly basis. The U.S. Trustee recommended in its statement that no fees be awarded to Ms. Col unless the fee request was better substantiated. The U.S. Trustee stated that although it was not fully able to review the application for lack of information, the request appeared high as it amounts to 27% of the remaining estate. Mr. Messer filed an affirmation in opposition to Ms. Col’s fee request and urged that a more precise statement of services rendered was required. In addition, the Trustee urged that the full amount of the application was unreasonable taking into consideration the size of the estate and the Debtor’s interest in the case.

Subsequently, Ms. Col filed a supplemental application. She urges that the issues were particularly complex, involving a series of unclear and conflicting legal theories, as well as the application of foreign law. It is stated that many hours were spent cooperating with the Trustee. The Trustee’s further affirmation in opposition states that extraordinary amounts of time were expended by Debtor’s counsel on routine matters, that the statement that the application of foreign law was required was grossly over-exaggerated and that all issues were determined by the Bankruptcy Code. In the Trustee’s opinion the complexity of the case had nothing to do with the British Trust but rather involved the two New York apartments. Nor does it appear that the Trustee requested such extensive cooperation from Ms. Col.

The comparative size of Ms. Col’s request is indeed extraordinary. Ms. Col is requesting more by almost 20% than the Trustee is requesting for counsel services. It appears to the court that counsel for the Debtor lacked familiarity with bankruptcy practice which caused her failure to appreciate the limited role in the collection and liquidation of his asserts that a Chapter 7 debtor has.

The commencement of a Chapter 7 case creates an estate comprised of the debtor’s property wherever located. Bankruptcy Code § 541(a). It is the Trustee’s duty to collect the estate and reduce it to cash for the purpose of paying dividends to creditors. Code §§ 704 and 726.

*293 The duties of the debtor are set forth in Code § 521. As Code § 521 1 read at the time this case was filed, it provided:

“§ 521. Debtor’s duties. The debtor shall—
“(1) file a list of creditors, and unless the court orders otherwise, a schedule of assets and liabilities, and a statement of the debtor’s financial affairs;
“(2) if a trustee is serving in the case, cooperate with the trustee as necessary to enable the trustee to perform the trustee’s duties under this title;
“(3) if a trustee is serving in the case, surrender to the trustee all property of the estate and any recorded information, including books, documents, records, and papers, relating to property of the estate; and
“(4) appear at the [discharge] hearing required under section 524(d) of this title.”

It is apparent from Code ,§ 521 that the debtor’s primary duty is one of continuing cooperation after the initial phase of the case when a trustee is appointed and the turnover of property is made. Until a trustee is appointed, and Mr. Messer was not appointed on September 15, 1983, only nine days after the case was filed, the debtor has a caretaker rule with respect to property of the estate so that it can be preserved and turned over to the trustee when appointed. In usual circumstances, the debtor can protect the property of the estate during this brief period by advising all persons that the Chapter 7 case has been filed and that the estate’s property is protected by the automatic stay provided by Code § 362.

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Cite This Page — Counsel Stack

Bluebook (online)
60 B.R. 290, 1986 Bankr. LEXIS 6182, Counsel Stack Legal Research, https://law.counselstack.com/opinion/matter-of-plunkett-nysb-1986.