In re Ricci Investment Company
UNPUBLISHED
Chapter 11 trustee, his counsel and the trustee's accounting firm submitted their third and final supplemental fee applications seeking reimbursement for fees and costs related to the defense of their second fee applications. The trustee and his counsel had encountered significant opposition to their second fee application and the Court disallowed a portion of the fees requested in their second applications. The determination whether the fees requested in the supplemental fee applications is governed by Section 330 as it existed prior to the Bankruptcy Reform Act of 1994 and the Tenth Circuit case law interpreting Section 330. See Rubner & Kutner, P.C. v. U.S. Trustee (In re Lederman Enters., Inc.) , 997 F.2d 1321 (10th Cir. 1991) (benefit to the estate is threshold concern when determining eligibility for reimbursement of fees). The Court determined that trustee's counsel did not exercise reasonable discretion during the course of administering the assets of the estate and the time spent preparing and defending the previous fee application was disproportionate to the amount ultimately in dispute. The reasonableness and necessity of incurring fees to defend a prior fee application in comparison to the benefit to the estate entitled trustee's counsel to 4 percent of the total fee request. The Court awarded a collective 34 percent of the total amount requested by the trustee and the trustee's accounting firm because there was benefit to the estate for the trustee's defense against allegations that the trustee acted negligently because those allegations were subsequently found to be untrue. The Court further disallowed the applicants' request for payment of interest and collection costs on the fees previously approved by the Court.