Protective Committee for Independent Stockholders of TMT Trailer Ferry, Inc. v. Kirkland

434 F.2d 804
CourtCourt of Appeals for the Fifth Circuit
DecidedOctober 27, 1970
DocketNos. 29089, 29560
StatusPublished
Cited by1 cases

This text of 434 F.2d 804 (Protective Committee for Independent Stockholders of TMT Trailer Ferry, Inc. v. Kirkland) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Protective Committee for Independent Stockholders of TMT Trailer Ferry, Inc. v. Kirkland, 434 F.2d 804 (5th Cir. 1970).

Opinions

PER CURIAM:

Our orders of December 12, 1969 and January 15, 1970 in Misc. No. 1546, now Docket No. 29089, granted the petition of the Protective Committee and its counsel, appellants, for leave to appeal under Section 250 of the Bankruptcy Act from the District Court’s order entered October 9, 1969, insofar as it related to the fixing of compensation for the attorneys. However, the Protective Committee’s petition was denied insofar as it pertained to the District Court’s refusal to grant a protective order against the taking of depositions by the Trustee of the three members of the Protective Committee and its three attorneys, and to the denial of the Committee’s motion to grant instructions defining the role of the Committee.

The Protective Committee on November 13, 1969 filed its notice of appeal from the District Court’s order dated October 9, 1969 entitled “Order Denying Motion for Protection and Allowing Partial Intérim Allowance to Counsel for Protective Committee for Independent Stockholders and Partial Reimbursement of Expenses.” On March 2, 1970, the Trustee filed his motion to dismiss the appeal under Rule 9(b) of the local Rules of this Court in which he recited the details of our orders of December 12, 1969 and January 15, 1970, and further [806]*806averred that the Protective Committee and its counsel had undertaken no further action whatsoever in connection with the notice of appeal filed on November 13, 1969. Accordingly, the Trustee requested that upon the expiration of fifteen days and after due notice the appeal initiated by the Protective Committee’s notice of appeal dated November 13, 1969 be dismissed for want of prosecution.

A response was filed by appellant Protective Committee which stated in part: “Two appeals from that order [i. e., the order of October 9, 1969] were initiated. Appeal One: A petition to this Court sought review under § 250 of the Bankruptcy Act, of so much of the order as dealt with compensation and reimbursement. Because the depositions were sought as part of a series of objections by appellee to the application for counsel’s compensation and reimbursements, and out of an abundance of caution, the committee also sought leave to appeal from the denial of the motion for instructions and protective order. Appeal Two: At the same time, an appeal as of right by the committee was noticed from that part of the order which denied the motion for instructions and protection.” The Protective Committee urged denial of appellee’s motion to dismiss the appeal and moved the Court for time within twenty days to perfect the record of a second appeal.

On March 30, 1970, we ordered that appellants file and docket the second appeal within fifteen days thereafter, which was done, and Docket No. 29560 was assigned to it.

Thereafter, by our order dated May 8, 1970, we denied the motion of appellee Trustee for consolidation of the two appeals.

Oral argument on these two appeals and on numerous pending motions has been heard and we make the following disposition thereof:

1. Our denial of the motion to consolidate these two appeals and the motion to consolidate is reconsidered and is now granted.

2. That portion of our orders of December 12, 1969 and January 15, 1970 wherein we denied the petition of the Protective Committee and its counsel for leave to appeal from the District Court’s refusal to grant instructions defining the role of the Committee and from the denial of the motion for protection against the taking of the depositions of the three members of the Committee and its three counsel, is also reconsidered. In our view appellants were entitled of right to appeal this portion of the District Court’s order without permission of the Court under Section 250 of the Bankruptcy Act. We do not agree that the filing of the petition for permission and subsequent denial thereof estopped appellants from pursuing their appeal as of right from that portion of the District Court’s order. See Section 24(a) of the Bankruptcy Act, 11 U.S.C. § 47(a); 2 Collier on Bankruptcy 734 (14th ed. 1969 rev.); Freeman v. Seligson, 1968, 132 U.S.App.D.C. 56, 405 F.2d 1326, 1332; In re Commonwealth Financial Corporation, 3 Cir., 1969, 408 F.2d 640, certiorari denied sub nom. Thal v. Commonwealth Financial Corp., 395 U. S. 961, 90 S.Ct. 2104, 23 L.Ed.2d 748 (1969); Henry Ansbacher and Co. v. Klebanow, 2 Cir., 1966, 362 F.2d 569.

3. The District Court was in error and much too low in its award of an interim fee to counsel for the stockholders’ Protective Committee of $10,-000 and expenses of $5,000, and the interim ward is grossly inadequate. Section 242, Chapter X of the Bankruptcy Act, 11 U.S.C. § 642. Though the District Court has a broad discretion in the award of fees, the appellate court is likewise an expert on the reasonableness of fees, and may exercise an independent judgment with reference thereto. Mass. Mutual Life Ins. Co. v. Brock, 5 Cir., 1968, 405 F.2d 429, 432, 435. We conclude that the circumstances here warrant the use of our own independent judgment in this free controversy. The [807]*807Securities and Exchange Commission having participated fully in these proceedings (now in their thirteenth year), from the very beginning of the filing of the Chapter X reorganization, is intimately familiar with the services rendered by the Committee’s counsel over a long period of years, and strongly recommends approval of an interim amount of $60,000 counsel fees and $10,000 reimbursement of expenses as partial allowances for services and expenses, and further recommends that the interim award shall not be subject to vacation, setting aside, reduction or modification except upon proof of legal disqualification. Counsel for the Committee seek an interim award of $100,000 fees and $20,000 reimbursement of expenses. At oral argument, SEC counsel (who has represented the Commission throughout this bankruptcy) stated unequivocally that this Court could safely accept the Commission’s recommendation as to an interim award, which amount the Protective Committee’s counsel had as a minimum, earned to date.

A contradictory hearing was held in the District Court on the question of the interim award for fees and expenses and testimony of two of the three Committee lawyers as to the services rendered was received. The third attorney was present in the courtroom and tendered for cross-examination which was declined. Counsel testified that they had expended in excess of 8,000 hours of time in services for the Committee which they detailed for the Court. Committee counsel produced a detailed statement of services and expenses. They brought their books and records of time and disbursements to the hearing and testified to the accuracy of their statement. SEC counsel, the then Trustee’s counsel, and attorneys for creditors cross-examined the Committee counsel. These services were, of course, highlighted by the effective presentation in the Supreme Court of the United States which resulted in rejection of a plan of reorganization which had been approved by the District Court and this Court.

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Tmt Trailer Ferry, Inc. v. Kirkland
434 F.2d 804 (Fifth Circuit, 1970)

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