Trustee Who Hired Herself as Attorney had Attorneys Fees Slashed since Trustee’s Ordinary Duties are routinely Performed by a Chapter 7 Trustee Without the Assistance of Counsel

Trustee Who Hired Herself as Attorney had Attorneys Fees Slashed since Trustee’s Ordinary Duties are routinely Performed by a Chapter 7 Trustee Without the Assistance of Counsel

Trustee was appointed as the Chapter 7 Trustee in this reopened case and hired herself as an attorney. Before the Court is her First and Final Fee Application for Attorney Fees (the “Application”) requesting $6,270.00 for attorney fees and $14.70 for expenses. Debtor objects to a portion of these fees. For the reasons stated in this Opinion, the Court sustains in part and overrules in part Debtor’s objections and awards fees in the amount of $4,200.00 and expenses in the amount of $14.70.

Debtor filed her voluntary petition under Chapter 7 of the Bankruptcy Code on August 24, 2010. Mason was the Chapter 7 trustee who initially administered the case. The case was closed as a no asset case on December 8, 2010. On January 8, 2016, Debtor filed an ex parte motion to reopen the case to disclose a cause of action in a personal injury case for injuries that arose pre-petition and to exempt those assets. Corcoran was appointed as the Chapter 7 Trustee and determined that she needed to hire an attorney. She hired herself to investigate and pursue the Debtor’s personal injury claim.

The Trustee retained special counsel and reviewed the settlement documents. She prepared and filed an objection to Debtor’s amended exemptions, and resolved that issue with Debtor’s counsel. The Trustee also prepared the Motion to Compromise Claim after the settlement was approved, and obtained court approval for the compromise on October 26, 2017. The settlement award was $125,000.000 and after payment of the appropriate fees, costs, and expenses, the estate received $68,383.55. Debtor received her allowed exemption in the amount of $20,000, and the remaining funds will be distributed according to the priorities in the Bankruptcy Code. Debtor may be entitled to additional funds due to the possibility of a surplus estate.

The Trustee filed the Application on January 12, 2018, requesting $6,270.00 in attorney fees for 20.90 billable hours and $14.70 for expenses. Debtor filed a response to the Application on January 24, 2018. Debtor argued that the Application included charges for services generally performed by the Trustee without the assistance of an attorney and that some of the charges were in excess of reasonable expenditures of time.

Log In to READ MORE

Please note, in order to view NACBA Member Content, you must sign in and then visit NEWS. If you are not a NACBA member, you may Become a NACBA Member 

No Comments

Post a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.