In re Ricci Investment Company
UNPUBLISHED
The proponents of a confirmed chapter 11 plan objected to the fee application filed by the chapter 11 trustee's attorneys and raised issues regarding the chapter 11 trustee's business judgment versus the attorney for the trustee's legal judgment, whether certain tasks performed by the trustee's attorneys were beneficial to the estate, and the impact of a violation of Fed. R. Bankr. P. 3016(a) on the allowance of fees. Relying on In re Curlew Valley Assoc. , 14 B.R. 506 (Bankr. D. Utah 1981), the Court found that although in hindsight, some of the trustee's decisions may have appeared improvident or premature, the trustee's decisions were reasonable, made in good faith, and were within the scope of the trustee's authority under the Bankruptcy Code. Applying 11 U.S.C. § 330 as it existed prior to the Bankruptcy Reform Act of 1994, the Court determined benefit under Rubner & Kutner, P.C. v. U.S. Trustee (In re Lederman Enters., Inc.) , 997 F.2d 1321 (10th Cir. 1993) by looking at whether services rendered by the trustee's attorneys promoted the bankruptcy process in accordance with the Bankruptcy Code and Rules. The Court concluded that time spent by the trustee's attorneys to draft the trustee's disclosure statement and plan that were filed in violation of Fed. R. Bankr. P. 3016(a) and time spent by the trustee's attorneys on an escrow agreement that allowed a result contrary to that approved by the Court were not beneficial to the estate. The Court denied compensation for these services.