  |
  |
  |
    
  
   |
 | |||
|
|
|
|
| |||
The court relied on 11 U.S.C. § 1129(a)(4) in finding that the payments to reimburse the committee for its legal fees need only be approved as "reasonable" by the court. The court found that the plan terms were creative and did not conflict with other provisions of the Bankruptcy Code because "[a] consensual payment offered by a debtor is not the same as and should not be confused with the treatment of a claim made against a debtor." However, the court cautioned that plan terms allowing for reimbursement of the committee's legal fees in this case "are not standard, but they are permissible" and should "be reserved for those special occasions of exceptional justification."
xvi. Harrington v. Nickless (In re International Gospel Party Boosting Jesus Groups, Inc.), 487 B.R. 12 (D. Mass. 2013)
Issue: Whether, in a surplus funds case, the debtor's attorney can receive a fee award for work performed after the appointment of a Chapter 11 trustee.
Holding: The district court held that a debtor's attorney cannot receive a fee award from estate property for work performed after the appointment of a Chapter 11 trustee because 11 U.S.C. § 330(a) plainly excludes a debtor's attorney fees, and makes no exception for cases involving surplus funds. The court vacated the bankruptcy court's award of attorney fees based on 11 U.S.C. § 349(b). The bankruptcy court concluded that the estate funds had re-vested in the debtor upon dismissal of the Chapter 11 case. The district court found that a state court order prevented the debtor from receiving the "re-vested" funds, thus preventing the debtor from paying its attorney. The district court found the bankruptcy court effectively gave the debtor's attorney priority over unsecured creditors that he would have had if he were "eligible for compensation under section 330."
xvii. In re Talsma, 468 B.R. 809 (Bankr. N.D. Tex. 2012)
Issue: Whether the accountants' fee application should be approved.
Holding: The court granted the accountants' fee application in part, but awarded sanctions for the accountants' violation of the stay for submitting an invoice to the debtor for a pre-petition claim. The court first rejected the UST's argument that BMY's application should be denied because it was not disinterested. The court noted that the UST had raised this argument at the hearing on the debtor's motion to employ BMY, but had never appealed that ruling. The court noted that even if that ruling was considered interlocutory, the UST could nonetheless have sought leave to appeal it, but chose not to. The court also rejected the UST's disinterestedness objection on its merits, stating: "Section 328(c) on its face excepts professionals covered by section 1107(b) from the general rule that the discovery that a professional is not disinterested can result in denial of compensation. The court can find no reasonable way to read section 328(c) other than to permit compensation to a debtor in possession's professional despite such professional being not disinterested so long as, as specified by section 1107(b), the lack of disinterestedness stems from the professional's prepetition representation of the debtor."
©2014 William L. Norton III
