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xiii. In re Seven Counties Services, Inc., 496 B.R. 852 (Bankr. W.D. Ky. 2013)
Issue: Whether a public relations firm constituted a "professional" under 11 U.S.C. § 327.
Holding: The bankruptcy court held that the public relation firm hired by the debtor shortly before bankruptcy was not a "professional" under 11 U.S.C. § 327 because the firm did not perform any tasks of the debtor-in-possession and did not help in formulating the debtor's plan of reorganization. The firm was hired to help the debtor "increase legislative and public support" for restructuring the debtor prior to bankruptcy and to help the debtor with employee relations, public relations, and consumer and vendor relations after the petition. Though the public relations firm did not qualify as a professional, the court found that the debtor could employ the firm under the authority of 11 U.S.C. § 1108 for a debtor-in-possession to operate its business.
xiv. In re Rama Group of Companies, Inc., 496 B.R. 307 (Bankr. W.D.N.Y. 2013)
Issue: Whether interim fee allowances were final adjudications of fees for counsel representing the debtor, and alternatively, whether the committee of creditors was precluded from seeking reconsideration of such interim fees because of an undue delay.
Holding: The bankruptcy court held under 11 U.S.C. §§ 330-31, the court can reduce counsel's final compensation by the amount of any interim compensation, including ordering the return of interim compensation to the amount it exceeds final compensation. The court also held that the debtor's counsel was at least partially to blame for the undue delay because it had not sought an order for final compensation in over a decade since its last award of interim compensation. The committee of unsecured creditors sought sanctions and disgorgement of fees against a law firm and three of its partners that represented the debtor in a prepetition assets sale and as special counsel in bankruptcy. For various reasons, including a prior settlement between the firm and the committee, the court refused to allow disgorgement of prepetition fees or a disallowance of the firm's claim for prepetition services. However, the court concluded by allowing the committee's assertions regarding the disallowance of post-petition fees to move forward. However, the court noted that even if the committee showed that the firm did not represent the best interest of the estate throughout its representation of the debtor, the court's "disallowance of fees is permissive, not mandatory."
xv. In re Lehman Bros. Holdings, Inc., 487 B.R. 181 (Bankr. S.D.N.Y. 2013)
Issue: Whether the creditors' committee could recover attorney fees based on terms of the plan allowing for reimbursement notwithstanding the fact that counsel fees for the committee are not allowed as administrative expenses under 11 U.S.C. § 503(b).
Holding: The bankruptcy court allowed the creditors' committee to recover its attorney fees in as administrative expenses. The creditors' committee negotiated for and the debtor agreed to reimbursement for the committee's attorney fees, which was incorporated in the debtor's plan.
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