  |
  |
  |
    
  
   |
 | |||
|
|
|
|
| |||
(6) applicant profited from the situation or rather faced substantial loss if it had not undertaken the approach that it did, and (7) applicant had a negative effect on the case, such as making questionable objections to pleadings filed by debtor or engaging in improper conduct in some other fashion which caused debtor to incur costs or which delayed resolution of case. Proponent of Chapter 11 plan that was ultimately confirmed, which also was purchaser of debtor's mineral assets, made a "substantial contribution" to the estate, though not to extent asserted by it; while a benefit to creditors as a whole was created by securing a confirmed plan, the contentious process required statutory fiduciaries to expend time and fees objecting to various plans, seeking out other buyers, and fighting confirmation, such that the benefit to the estate was significantly reduced, many services performed by proponent were "ordinary, expected, and routine" actions taken by a potential purchaser and creditor, while others were duplicative, settlement of certain claims was not directly attributable to proponent, proponent chose to become involved with debtor by purchasing existing claims. Failure of plan proponent to provide notice of its substantial contribution claim in the disclosure statement and Chapter 11 plan warranted a reduction in the substantial contribution claim of $199,400.96 by 25%, resulting in an allowed substantial contribution claim of $149,550.72.
v. In re Residential Capital, LLC, 505 B.R. 358 (Bankr. S.D. N.Y. 2014).
Issue: Whether chief restructuring officer is entitled to court approval payment of $2 million success fee.
Holding: Success fee of $2 million was reasonable for professional who, while employed as Chapter 11 debtors' chief restructuring officer, basically performed role of chief executive officer following the resignation of debtors' CEO, and who played vital and indispensable role in garnering creditor support and in turning what was complicated and highly contentious case that was nearly in state of free fall into case that was successfully completed through a largely consensual plan, where $2 million award was well within market standards, considering amount of debtor's assets and liabilities, measure of value created by the CRO's efforts, and savings to estates.
vi. In re Age Refining, Inc., 505 B.R. 447 (Bankr. W.D. Tx. 2014).
Issue: Unsecured creditors committee appointed in the case of Chapter 11 debtor filed post- confirmation application for counsel fees, seeking the allowance of such fees as an administrative expense.
Holding: Bankruptcy court had jurisdiction to rule on unsecured creditors committee's post- confirmation application for counsel fees; Chapter 11 plan and confirmation order provided for post-confirmation jurisdiction over administrative and professional fee claims, including the subject fee application, and while committee's appeal of confirmation order divested bankruptcy court of jurisdiction over the subject matter of the appeal, it did not divest bankruptcy court of
©2014 William L. Norton III
