Robert J. Ambruster, Inc.

CourtUnited States Bankruptcy Court, E.D. Missouri
DecidedSeptember 1, 2023
Docket20-44289
StatusUnknown

This text of Robert J. Ambruster, Inc. (Robert J. Ambruster, Inc.) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Robert J. Ambruster, Inc., (Mo. 2023).

Opinion

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MISSOURI EASTERN DIVISION

In re § § Case No. 20-44289-169 Robert J. Ambruster, Inc., § § Chapter 11, Subchapter V Debtor. § § Re: Doc No. 250 § § FOR PUBLICATION

OPINION AND ORDER DENYING MOTION TO RECONSIDER

I. BACKGROUND Robert J. Ambruster, Inc. (the “Debtor”) commenced its bankruptcy case, docketed as case number 20-44289-169 (the “Case”), under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code” or the “Code”) on September 3, 2020 (“Petition Date”). Doc. No. 1.1 The Debtor elected to proceed under Subchapter V of the Bankruptcy Code. Doc. No. 4 at 2. A. The Subchapter V Trustee Fee Order On September 4, 2020, the Office of the United States Trustee (the “UST”) appointed Stephen D. Coffin as the Subchapter V Trustee in this Case (the “Trustee”). Doc. No. 3 at 1. The Notice of Appointment of Subchapter V Trustee designated the Trustee’s appointment “[p]ursuant to 11 U.S.C. § 1183(a)” of the Bankruptcy Code. Id. On January 30, 2021, the Trustee filed his “First Interim Fee Application of Subchapter V Trustee for Order Approving Trustee Fees as a Chapter 11 Administrative Expense” (the “Fee Application”). Doc. No. 95. In the Fee Application, the Trustee requested that this Court approve

1References to “Doc. No. ___” in this Order are to documents entered upon this Court’s docket in the Case. References to “D.E. __/__/__” in this Order are to text entries located and dated on this Court’s docket. This Court uses these references to enhance the clarity of the record in proceedings before it. the fees and expenses he incurred while performing his duties as Trustee in the Case between September 4, 2020 and January 30, 2021. Id. at 1-2, ¶ 4. The Fee Application sought approval of $3,504.00 in fees for services the Trustee rendered in the Case and $39.60 in expense reimbursement for postage used to serve the Fee Application for a total of $3,543.60. Id. The Fee

Application stated that the Trustee sought compensation for fees and reimbursement of expenses under section 330 of the Bankruptcy Code, Id. at 1, ¶ 3, as well as allowance of those fees and expenses as a Chapter 11 administrative expense in the Case. Id. at 2. Exhibit A to the Fee Application comprised a “Time Worksheet” detailing the tasks performed by the Trustee. Id. at 6-7. Exhibit A contained time entries broken down by service category; each time entry included the date of the task, a description of the task, the time devoted to the task reported in tenths of an hour increments, the hourly rate of the person performing the task, and the charge for each task. Id. Exhibit A showed a total of 14.6 hours spent on all listed tasks at a rate of $240.00 per hour and calculated the total charges listed as $3,504.00. Id. at 7. The Trustee noticed the Fee Application out for hearing scheduled on March 9, 2021. Doc.

No. 96 at 1. The Certificate of Service for the hearing notice for the Fee Application shows the Trustee served that notice on all creditors and parties in interest. Id. at 2-5. On February 10, 2021, Deborah Drace, a self-represented party in interest (“Ms. Drace”), filed her “Combined Objection to First Interim Fee Application of Subchapter V Trustee for Order Approving Trustee Fees as a Chapter 11 Administrative Expense and Objection to Petition, Schedules, Affidavits, and Plan” (the “Combined Objection”). Doc. No. 102. The Combined Objection asserted that the UST should have appointed the Trustee under 28 U.S.C. § 586(b) and appeared to object to the Trustee’s appointment on that basis. Id. at 3, ¶ 3. The Combined Objection also asserted that 28 U.S.C. § 586(b) limited the Trustee’s fees to those allowed to a standing trustee, capped at five percent of payments under a confirmed plan. Id. at 3, ¶ 4. The Combined Objection also took issue with certain specified charges for tasks the Trustee performed and listed on Exhibit A to the Fee Application. Those charges included (1) a

charge on January 26, 2021 for $768.00 for 3.2 hours of time spent attending hearings on a motion for relief from stay and related motions filed by self-represented party Jeffrey Mize (“Mr. Mize”);2 (2) a charge on January 21, 2021 for $240.00 for one hour of time spent researching and drafting an objection to Mr. Mize’s motion for relief from stay; (3) a charge on November 23, 2020 for $96.00 for a four-tenths of an hour telephone call with both Ms. Drace and Mr. Mize regarding their purported claims against the Debtor and Robert Drace, one of its insiders and Ms. Drace’s sibling; (4) a charge on October 19, 2020 for $72.00 for a three-tenths of an hour telephone call with the Debtor’s then-counsel regarding the reorganization plan, creditor objections, and claim issues;3 (5) a charge on October 12, 2020 for $24.00 for a one-tenth of an hour telephone call with the Debtor’s then-counsel regarding Ms. Drace’s appearance at the meeting of creditors; and (6)

other unspecified time entries charged for communications between the Trustee and the Debtor’s then-counsel. Doc. No. 102 at 3-6, ¶¶ 5-9; Doc. No. 95, Exh. A at 6-7. Without specifying the particular time entries at issue, the Combined Objection also objected to any fees associated with the Trustee’s appearance at the meeting of creditors and objected to the Trustee’s work because he

2 The Combined Objection fails to mention that Mr. Mize is Ms. Drace’s spouse or that Mr. Mize bases his purported standing and asserted claims in the Case in large part upon their marriage and his role as the father of children from that marriage. See, e.g., Doc. No. 64 at 2 (alleging that Jeffrey Mize has a protectible interest in the Case as a result of being “the lawful husband of Deborah L. Drace-Mize,” who in turn allegedly is a shareholder of the Debtor). The docket in the Case does not reflect any objections by Ms. Drace to any of Mr. Mize’s motions or other papers.

3 This Court subsequently granted the Debtor’s then-counsel’s Motion to Withdraw as Counsel for Debtor, Robert J. Ambruster, Inc. [Doc. No. 162] on April 2, 2021. Doc. No. 212. had not performed tasks that Ms. Drace deemed necessary, including compelling other creditors to speak with her, watching a video of one of the Debtor’s board meetings, and compelling the Debtor to file tax returns. Doc. No. 102 at 6-10, ¶¶ 9-15. This Court held a hearing on the Fee Application on March 9, 2021. Doc. Nos. 148, 149

(comprising audio recordings of the March 9, 2021 hearings). The Trustee and counsel for the UST appeared by telephone,4 while Ms. Drace, Mr. Mize, and the Debtor’s then-counsel appeared in person. Id. The Trustee presented his argument in support of the Fee Application at the hearing. Id. Neither the Debtor nor the UST objected to allowance of the requested fees or the grant of an administrative priority for those fees. Id. Ms. Drace argued in support of the Combined Objection. Id. In addition, Mr. Mize orally objected to the Fee Application and provided argument to this Court on the record. Id. This Court then took the Fee Application and the Combined Objection under submission. Id. This Court entered its “Order Granting First Interim Fee Application of Subchapter V Trustee for Order Approving Trustee Fees as a Chapter 11 Administrative Expense” (the

“Subchapter V Trustee Fee Order”) on April 29, 2021. Doc. No. 241. The Subchapter V Trustee Fee Order analyzed the Trustee’s appointment requirements under sections 326, 328, 329, and 330 of the Bankruptcy Code, and the then-available case law on those issues. Id. at 4-8.

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