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Opinion 325

Case Name: 

In re TS Indus., Inc., 125 B.R. 638 (Bankr.D.Utah)

Judge: 
Judge Clark
Date: 
Apr-9-1991
Case Number(s): 
89C-4920 & -4221
Status: 

PUBLISHED

Body: 

Counsel for debtors in a chapter 11 proceeding submitted an application for payment of legal fees that were incurred both before and after a trustee had been appointed. Applying 11 U.S.C. §330(a) and 503(b)(2), the court concluded that reasonable and necessary fees and costs of a chapter 11 debtor's attorney were compensable as administrative expenses, and that applicant's pre-trustee fees were largely compensable. The court then rejected the holding of In re NRG Res., Inc., 64 B.R. 643 (W.D. La. 1986), to the effect that debtor's counsel may not be compensated for services rendered after a trustee was appointed, even for services that both benefitted the estate and were requested by the trustee, unless counsel was first approved to act as special counsel for the trustee under 11 U.S.C. § 327(e). Instead, the court slightly lessened the NRG standard based on the facts before it, which were that the post-trustee services rendered by debtor's counsel largely benefitted the estate, the fee application was "not hotly contested," trustee had proffered that no duplicative work had been performed, and the absence of case law in this district, at the time services were performed, on the issue of post-trustee services performed by debtor's counsel. However, the court emphasized that, in the future, if debtor's counsel performs any services that are duties of the trustee after one has been appointed, approval to act as special counsel for the trustee under 11 U.S.C. § 327(e) should be obtained first. The court then considered the application and eliminated post-trustee fees that were for services it determined to be either unreasonable or unnecessary.

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Opinion 325
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