In re Jensen-Farley Pictures, Inc., 47 B.R. 557 (Bankr.D.Utah)
PUBLISHED
On applications for interim compensation filed by co-attorneys for an unofficial creditors committee, an accountant for the chapter 11 debtor, and an accountant for the creditors committee, the court considered the following issues: (1) whether compensation for prepetition services by creditors committee counsel and debtor's accountant is allowable as an administrative expense; (2) whether professional fee payments are limited to local hourly rates; (3) whether the committee's accountant represented an interest adverse to the debtor's estate, and is therefore not entitled to compensation; and (4) whether the fees and costs applied for may be otherwise allowed. The court concluded that (1) prepetition legal services to the creditors committee did not substantially benefit the bankruptcy estate and were not compensable by the estate; (2) prepetition accounting services may not be allowed as administrative claims; (3) when out-of-state attorneys practice before the court, they are entitled to charge their customary billing rates; and (4) attorneys' postpetition fees were reasonable, proper, and allowable as administrative expenses, but the accountants' applications required an additional hearing to determine whether they had conflicts of interest.