Opinion
Case No. 09 B 44943
08-20-2014
In re: CANOPY FINANCIAL, INC. Debtor.
Chapter 7
FINDINGS OF FACT AND CONCLUSIONS OF LAW IN SUPPORT OF ORDER GRANTING APPLICATION OF SEYFARTH SHAW LLP, ATTORNEYS FOR TRUSTEE, FOR ALLOWANCE OF INTERIM COMPENSATION AND REIMBURSEMENT OF EXPENSES
| TOTAL FEES REQUESTED: $616,510.00 | TOTAL COSTS REQUESTED: $32,851.83 |
| TOTAL FEES REDUCED: $26,276.00 | TOTAL COSTS REDUCED: $0.00 |
| TOTAL FEES ALLOWED: $590,234.00 | TOTAL COSTS ALLOWED: $32,851.83 |
TOTAL FEES AND COSTS ALLOWED: $623,085.83
The attached time and expense entries have been underlined to reflect disallowance in whole or in part. The basis for each disallowance is reflected by numerical notations that appear on the left of each underlined entry. The numerical notations correspond to the enumerated paragraphs below.
(1) Improper Allocation of Professional Resources
The Court denies the allowance in part of compensation for the following task since a professional with a lower level of skill and experience or a paraprofessional could have performed the task. In re Pettibone, 74 B.R. 293, 303 (Bankr. N.D. Ill. 1987) ("Senior partner rates will be paid only for work that warrants the attention of a senior partner. A senior partner who spends time reviewing documents or doing research a beginning associate could do will be paid at a rate of a beginning associate. [Citation omitted]. Similarly, non-legal work performed by a lawyer which could have been performed by less costly non-legal employees should command a lesser rate."); In re Wildman, 72 B.R. 700, 710 (Bankr. N.D. Ill. 1987) (same); In re Alberto, 121 B.R. 531, 535 (Bankr. N.D. Ill. 1990) (determining use of partner appropriate where attendant complex legal issues warrant highly experienced practitioner).
(2) Unreasonable Time
The Court denies the allowance in part of compensation for the following task since the professional or paraprofessional expended an unreasonable amount of time on this task in light of the nature of the task, the experience and knowledge of the professional performing the task, and the amount of time previously expended by the professional or another on the task. In re Pettibone, 74 B.R. 293, 306 (Bankr. N.D. Ill. 1987) ("The Court will determine what is the reasonable amount of time an attorney should have to spend on a given project... An attorney should not be rewarded for inefficiency. Similarly, attorneys will not be fully compensated for spending an unreasonable number of hours on activities of little benefit to the estate."); In re Wildman, 72 B.R. 700, 713 (Bankr. N.D. Ill. 1987) (same).
As to the time devoted to the preparation of the fee application itself, the Court denies the allowance of compensation that is disproportionate to the total hours in the main case. In re Wildman, 72 B.R. 700, 711 (Bankr. N.D. Ill. 1987) ("In the absence of unusual circumstances, the hours allowed by this Court for preparing and litigating the attorney fee application should not exceed three percent of the total hours in the main case."); In re Spanjer Bros., Inc., 203 B.R. 85, 93 (Bankr. N.D. Ill. 1996) (compensation limited to 5%). See also In re Pettibone Corp., 74 B.R. 293, 304 (Bankr. N.D. Ill. 1987) (citing Coulter v. State of Tennessee, 805 F.2d 146, 151 (6th Cir. 1986) (in non-bankruptcy cases, compensation for preparation and litigation of fee petitions limited to 3-5% of the hours of the main case)).
(4) Insufficient Description
The Court denies the allowance of compensation for the following task since the description of the time entry fails to identify in a reasonable manner the service rendered. In re Pettibone, 74 B.R. 293, 301 (Bankr. N.D. Ill. 1987) ("A proper fee application must list each activity, its date, the attorney who performed the work, a description of the nature and substance of the work performed, and the time spent on the work. [Citation omitted] Records which give no explanation of the activities performed are not compensable."); In re Wildman, 72 B.R. 700, 708-9 (Bankr. N.D. Ill. 1987) (same).
(5) Duplication of Services
The Court denies the allowance of compensation for services that duplicate those of another professional or paraprofessional. See 11 U.S.C. § 330(a)(4)(A)(i). Reduction in fees is warranted if multiple attorneys from the same firm appear in court on a motion or argument or for a conference, unless counsel adequately demonstrates that each attorney present contributed in some meaningful way. In re Pettibone, 74 B.R. 293, 307 (Bankr. N.D. Ill. 1987) ("A debtor's estate should not bear the burden of duplication of services. If found in the record, such duplication shall be disallowed by the court as unnecessary."). It is also an accepted principle that generally no more than one attorney may bill for time spent in an intra-office conference or meeting absent an adequate explanation. See In re Adventist Living Ctrs., Inc., 137 B.R. 701, 716 (Bankr. N.D. Ill. 1991); In re Pettibone, 74 B.R. at 303.
(11) Overhead Costs are Non-Compensable
The Court denies reimbursement for fees or expenses that are overhead costs. Expenses which are overhead are not compensable because they are built into the hourly rate. See In re Wildman, 72 B.R. 700, 731 (Bankr. N.D. Ill. 1987). Overhead, for bankruptcy purposes, includes "all continuous administrative or general costs or expenses incident to the operation of the firm which cannot be attributed to a particular client or cost." In re Convent Guardian Corp., 103 B.R. 937, 939-40 (Bankr. N.D. Ill. 1989) (quoting In re Thacker, 48 B.R. 161, 164 (Bankr. N.D. Ill. 1985)).
(12) Clerical Work Not Compensable
The court disallows the compensation of clerical or stenographic employees of the professional for the performance of routine clerical or administrative activities in the normal course of the professional's business, such as photocopying, secretarial work, or routine filing. Such activities are not in the nature of professional services and must be absorbed by the applicant's firm as an overhead expense. In re Dimas, LLC, 357 B.R. 563, 577 (Bankr. N.D. Cal. 2006) (citing Missouri v. Jenkins, 491 U.S. 274, 288 n. 10 (1989)). See also In re Chellino, 209 B.R. 106, 114 (Bankr. CD. Ill. 1996) (Paralegal, but not "clerk" services entitled to compensation at an hourly rate; clerk activities are overhead of the professional); Souza v. Miguel, 32 F.3d 1370, 1375 (9th Cir. 1994) (Trustee not entitled to reimbursement or compensation of overhead expenses such as secretarial, stenographic, clerical, and routine messenger services). Dated: August 20, 2014
/s/_________
Eugene R. Wedoff
United States Bankruptcy Judge
PALOIAN V. FIFTH THIRD BANK; 11-24.72
| Date | Description | Timekeeper | Hours | Value |
| 02/03/14 | Communications with M. Johnson and R. Pinkston regarding | G. Paloian | 0.40 | 260.00 |
| 02/04/14 | Review select case law | G. Paloian | 0.40 | 260.00 |
| 02/05/14 | Review | G. Paloian | 0.30 | 195.00 |
| 02/20/14 | Review/revise (.60); review (.20) | G. Paloian | 0.80 | 520.00 |
| 02/21/14 | Telephone conferences wilh C. Robertson regarding | G. Paloian | 0.20 | 130.00 |
| 02/25/14 | Review regarding (.70); contact court reporter regarding (.20) | B. Harper | 0.90 | 297.00 |
| 02/26/14 | Review Transcript regarding (1.30), draft email regarding same (.10). | B. Harper | 1.40 | 462.00 |
| 03/07/14 | Review | G. Paloian | 0.40 | 260.00 |
| 03/28/14 | Communicate with R. Pinkston regarding | G. Paloian | 0.20 | 130.00 |
| 03/28/14 | Conference with G. Paloian regarding (.20); prepare e-mail correspondence to G. Paloian and C. Robertson regarding same (.10). | M. Pinkston | 0.30 | 124.50 |
| 03/31/14 | Telephone conferences wilh C. Robertson and conference with R. Pinkston regarding | G. Paloian | 0.40 | 260.00 |
| 03/31/14 | Telephone conferences wilh G. Paloian and C. Robertson regarding | M. Pinkston | 0.50 | 207.50 |
| 03/31/14 | Call with G. Paloian and R. Pinkston regarding (.40); review prior correspondence and trial orders regarding (.30). | C. Robertson | 0.70 | 413.00 |
| 04/01/14 | Prepare notice of filing of transcripts of proceedings before bankruptcy court (.60); finalize same and exhibits thereto for electronic filing (.20); electronically file notice of filing (.20); prepare e-mail correspondence to counsel for Fifth Third Bank regarding same (.10). | M, Pinkston | 1.10 | 456.50 -72.00 -83.00 |
| Date | Description | Timekeeper | Hours | Value |
| 04/01/14 | Review court order regarding (.10); call with C. Robertson regarding (.20); review proposed submission to court (.20); review (.70). | C. Robertson | 1.20 | 708.00 |
| 04/02/14 | Review (.30); correspondence with R. Pinkston and G. Paloian regarding (.20). | C. Robertson | 0.50 | 295.00 |
| 04/09/14 | Conference with R. Pinkston regarding | G. Paloian | 0.20 | 130.00 |
| 04/09/14 | Conference with R. Pinkston regarding | C. Harney | 0.30 | 112.50 |
| 04/15/14 | Confirm | A. Connor | 0.30 | 88.50 |
| 04/16/14 | Conference with G. Paloian regarding | M. Pinkston | 0.20 | 83.00 |
| 04/16/14 | Call with R. Pinkston regarding | C. Robertson | 0.30 | 177.00 |
| 04/17/14 | Conference with M. Johnson regarding | G. Paloian | 0.30 | 195.00 |
| 04/18/14 | Conference with C. Robertson and G. Paloian regarding | M. Pinkston | 0.30 | 124.50 |
| 04/22/14 | Research cases regarding a (.90); draft regarding (.20); forward (.10). | C. Robertson | 1.20 ' | 708.00 -157.50 |
| 04/25/14 | Review correspondence from G. Paloian regarding (.10); review correspondence from G. Paloian regarding (.20). | C. Robertson | 0.30 | 177.00 |
| 04/29/14 | Telephone conferences wilh (.30); communications with R. Pinkston regarding (.30); review (.90). | G. Paloian | 1.50 | 975.00 |
| 04/29/14 | Review (1.80); conference with C. Harney regarding same (.10); conference with G. Paloian regarding same (.30); telephone conference with (.10). | M. Pinkston | 2.30 | 954.50 |
| Date | Description | Timekeeper | Hours | Value |
| 03/02/14 | Exchange e-mail correspondence with M. Johnson regarding | M. Pinkston | 0.10 | 41.50 |
| 03/03/14 | Analysis of (.50); interoffice conference regarding (.30); final revision to (1.30); interoffice conference with G. Paloian regarding same (.20); interoffice conference with C. Ditching regarding (.20); follow-up regarding same (.40); review (.50). | M. Johnson | 3.40 | 1,870.00 |
| 03/03/14 | Conference witn M. Johnson regarding | G. Paloian | 0.20 | 130.00 |
| 03/03/14 | Review (.80); finalize review of (1.50); review (.50); review (.50). | C. Harney | 3.30 | 1,237.50 |
| 03/03/14 | Compile/download | J. McManus | 0.20 | 57.00 -57.00 |
| 03/03/14 | Finalize (.30); coordinate filing and service of same (.20). | C. Ditching | 0.50 | 132.50 -53.00 |
| 03/04/14 | Review pleadings regarding status (.30); further (.50). | M. Johnson | 0.80 | 440.00 |
| 03/04/14 | Review | M. Pinkston | 0.20 | 83.00 |
| 03/05/14 | Review (.40); follow-up regarding (.20); analysis of (.30). | M.Johnson | 0.90 | 495.00 |
| 03/06/14 | Interoffice cinference with R. Pinkston regarding (.30); follow-up regarding same (.40); review (.40); follow-up regarding same (.10). | M. Johnson | 1.20 | 660.00 |
| 03/06/14 | Conference with M. Johnson regarding (.40); conference with M. Johnson regarding (.10). | M. Pinkston | 0.50 | 207.50 |
| 03/07/14 | Interoffice conference with G. Paloian regarding status (.10); follow-up regarding (1.00); begin review (50); follow-up regarding same (.30); review (.30). | M. Johnson | 2.20 | 1,210.00 |
| 03/08/14 | Review (.50); prepare e-mail correspondence to M. Johnson and G. Paloian regading same (.10). | M. Pinkston | 0.60 | 249.00 |
| Date | Description | Timekeeper | Hours | Value |
| 03/09/14 | Review of (.40); further review/analysis of (.40); begin review/ analysis of case law regarding same (.50); folloe-up regarding status (.60). | M. Johnson | 1.90 | 1,045.00 |
| 03/10/14 | Research regarding (.80); interoffice conference with R. Pinkston regarding status (.20); further research regarding (1.50); interoffice conference with G. Paloian and R. Pinkston regarding strategy (.70); follow-up regarding same (.30); telephone conferences with (.30); telephone conference with (.20); prepare (.80); interoffice conference with R. Pinkston regarding same (.20); telephone conferences with R. Nachman of Barack Ferrazano (.20); review (.50) | M. Johnson | 5.70 | 3,135.00 |
| 03/10/14 | Review (.50); conference with M. Johnson regarding (.20); conference with M. Johnson and C. Robertson regarding (.30) | G. Paloian | 1.00 | 650.00 |
| 03/10/14 | Conference with M Johnson regarding (.20); legal research regarding same (2.80); conference with G. Paloian regarding same (.10); conference with M. Johnson and G Paloian regarding (.50); prepare notice of (.60); telephone conference with (.10); telephone conference with chambers same (.10). | M. Pinkston | 4.40 | 1,826.00 |
| 03/11/14 | Preparation of (.50); prepare for (.50); review materials regarding status (.20); interoffice conference with R. Pinkston regarding (.40); attend court hearing (1 00); interoffice conference with G. Paloian and R. Pinkston regarding (.50); follow-up regarding same (.60); (.50); begin review (.50); follow-up regarding same (.20) | M. Jolinson | 4.90 | 2,695.00 |
| 03/11/14 | Conference with M. Johnson regarding | G. Paloian | 0.30 | 195.00 |
| Date | Description | Timekeeper | Hours | Value |
| 03/19/14 | Follow-up regarding (.30); review materials regarding same (.40). | M. Johnson | 0.70 | 385.00 |
| 03/20/14 | Review materials regarding (.20); telephone conference with (.20); follow-up regarding same (.10). | M. Johnson | 0.50 | 275.00 |
| 03/21/14 | Telephone conference with (.20); follow-up regarding same (.30); review pleadings regarding status (.30). | M. Johnson | 0.80 | 440.00 |
| 03/24/14 | Review (.40); attend court hearing (.80); follow-up regarding same (.50); telephone conference with (.20); review (.40). | M. Johnson | 2.30 | 1,265.00 |
| 03/25/14 | Review (.30); review (.20); attend court hearing before bankruptcy court (.60); interoffice conference with G. Paloian regarding status and strategy (.30) review (1.20); research regarding (.40); review (.50). | M. Johnson | 3.30 | 1,815.00 |
| 03/26/14 | Follow-up regarding (.40); interoffice conference regarding same (2.70); review pleadings regarding status (.70). | M. Johnson | 3.80 | 2,090.00 |
| 03/26/14 | conference with M. Johnson regarding (2.30); continue to prepare (.30) | M. Pinkston | 2.60 | 1,079.00 |
| 03/27/14 | Analysis of (.40); and (.30) regarding (.40). | M. Johnson | 1.10 | 605.00 |
| 03/28/14 | Further analysis regarding (.70); interoffice conference regarding same (.50); review materials regarding (.80); follow-up regarding same (.30). | M. Johnson | 2.30 | 1,265.00 |
| 03/28/14 | Continue to prepare (3.80); conference with G. Paloian regarding status (.10); review/revise (.20). | M. Pinkston | 4.10 | 1,701.50 |
| 03/29/14 | Review/analysis of draft of (1.50); review of (1.00); review of (.70); review pleading regarding strategy (.50). | M. Johnson | 3.70 | 2,035.00 |
| 03/30/14 | Further review of (.80); further revisions to same (1.00); further review of (1.00). | M. Johnson | 2.80 | 1,540.00 |
| Date | Description | Timekeeper | Hours | Value |
| 04/22/14 | Review/ revise response to R (.40); review/revise (.30); communicate with R. Angart regarding (.20); review/comment on opposition to(.50); review (.70). | G. Paloian | 2.10 | 1,365.00 |
| 04/22/14 | Prepare notice of (.20); prepare motion to (.40); conference with G. Paloian regarding same (.20); conference with J. Sowka regarding (.40). | M. Pinkston | 1.20 | 498.00 |
| 04/22/14 | Assemble (.70); prepare(.40); prepare(.50); prepare(.60); prepare(.60); prepare(.50); prepare(.60); prepare(.60); prepare(.40); prepare(.60); prepare(.50). | J. McManus | 6.50 | 1,852.50 |
| 04/23/14 | Further analysis and review of (.80); review research regarding same (.40); telephone conference with (.20); prepare (.30); review (.20); attend court hearing (.70); interoffice conference with G. Paloian regarding (.50); follow-up regarding same (.20); review (.20); interoffice conference with G. Paloian regarding same (30); further follow-up regarding same (.40). | M. Johnson | 4.40 | 2,420.00 |
| 04/23/14 | Research regarding (1.10); review (.30); telephone conference with M. Johnson regarding (.40); review/revise (.20); telephone conference with (.20). | G. Paloian | 2.50 | 1,625.00 |
| 04/23/14 | Search (1.20); revise (.70); search (.40). | J. McManus | 2.30 | 655.50 |
| Date | Description | Timekeeper | Hours | Value |
| 05/12/14 | Review of regarding status (.40); further revisions to (.90); interoffice conference with G. Paloian regarding (.20); additional (1.00); interoffice conference with R. Pinkston regarding (.40); final revision to same (.30); interoffice conference with C. Haney regarding same (.20); follow-up regarding (.70). | M. Johnson | 3.90 | 2,145.0 -135.00 |
| 05/12/14 | Review case law regarding (.30); review/revise (.40). | G. Paloian | 0.70 | 455.00 |
| 05/12/14 | Review (.30); conference with M. Johnson regarding same (.20). | M. Pinkston | 0.50 | 207.50 |
| 05/12/14 | Review | C. Harney | 0.40 | 150.00 |
| 05/12/14 | Finalize (1.20); conference with M. Johnson regarding same (.30); review edits (.30); conference with C. Ditching regarding filing same (.30). | C. Harney | 2.10 | 787.50 |
| 05/12/14 | Proofread (.80); coordinatr electronic filing of same (.30). | C. Ditching | 1.10 | 291.50 -79.50 |
| 05/13/14 | Review/analysis (1.30); further review (.80); review research regarding same (1.00); interoffice conference with B. Harper regarding (.10); revisions to (2.00); interoffice conference with R. Pinkston regarding same and regarding strategy (.70); follow-up regarding (.40); follow-up with R. Pinkston regarding (.20). | M. Johnson | 6.50 | 3,575.00 |
| 05/13/14 | Conference with M. Johnson regarding (.50); review same (.30); exchange e-mail correspondence with M. Johnson regarding (.10) | M. Pinkston | 0.90 | 373.50 |
| 05/13/14 | Conference with M. Johnson regarding (.10); research (2.80). | B. Harper | 2.90 | 957.00 |
| 05/13/14 | Assemble information for M. Johnson regarding | J. McManus | 0.30 | 85.50 |
| 05/14/14 | Further (2.00); further revisions to same (1.00); interoffice conference with G. Paloian regarding same (.20); review (.70). | M. Johnson | 3.90 | 2,145.00 |
| Date | Description | Timekeeper | Hours | Value |
| 05/14/14 | Revise (.40); conferences with M. Johnson regarding (.40); | G. Paloian | 0.80 | 520.00 |
| 05/14/14 | Cite check (.90); confer conferences with M. Johnson regarding same (.10); revise (.20); case same to be filed with the court (.20). | J. McManus | 1.40 | 399.00 -57.00 |
| 05/15/14 | Follow-up regarding (.30); review pleadings and materials regarding same (.50); follow-up regarding status (.40). | M. Johnson | 1.20 | 660,00 |
| 05/15/14 | Review/comment on | G. Paloian | 0.30 | 195.00 |
| 05/15/14 | Review | J. McManus | 0.40 | 114.00 |
| 05/16/14 | Review (.90); follow-up regarding (1.00); preparation of (1.10); follow-up with (.40); interoffice conference with G. Paloian regarding same (.20). | M. Johnson | 3.60 | 1,980.00 |
| 05/16/14 | Review | G. Paloian | 0.20 | 130.00 |
| 05/16/14 | Review | M. Pinkston | 0.20 | 83.00 |
| 05/19/14 | Interoffice conference with R. Pinkston regarding (.20); follow-up regarding same (.30). | M. Johnson | 0.50 | 275.00 |
| 05/19/14 | Conference with M. Johnson regarding (.20); conference with C. Harney regarding same (.20). | M. Pinkston | 0.40 | 166.00 |
| 05/20/14 | Review of (.40); interoffice conference with R. Pinkston regarding same (.30) follow-up regarding (.50); review pleading regarding (.30). | M. Johnson | 1.50 | 825.00 |
| 05/20/14 | Review | G. Paloian | 0.20 | 130.00 |
| 05/20/14 | Review (1.20); review (.40); prepare (2.10); conferences with R. Pinkston regarding same (.30). | C. Harney | 4.00 | 1,500.00 |
| 05/21/14 | Follow-up regarding (.40); review revisions to same (.20) ; interoffice conference with G. Paloian, R. Pinkston, C. Harney regarding same (.40); telephone conference with (.20); review (.40). | M. Johnson | 1.60 | 880.00 |
| 05/21/14 | Review draft correspondence (.20); conference with M. Johnson, C. Harney and R. Pinkston regarding (.40). | G. Paloian | 0.60 | 390.00 |
| Date | Description | Timekeeper | Hours | Value |
| 02/03/14 | Conference with R. Pinkston rsgarding (.40); conferences with Tushar V. regarding same (.10); email crrespondence with (.10); review (.10); conference with R. Lutkus rsgarding same (.10); conference call with (.50); follow-up conference with R. Pinkston rsgarding same (.40); review (.40); edit (3.40). | C. Hartley | 6.30 | 2,362.50 |
| 02/03/14 | Telephone conference with C. Robertson and R. Pinkston rsgarding(.10); run (.20); forward same to C. Robertson and R. Pinkston rsgarding(.10); retrieve/review (.10). | J. McManus | 0.50 | 142.50 |
| 02/03/14 | Review/compile (5.80); follow-up with (.20). | A. Connor | 6.00 | 1,770.00 |
| 02/03/14 | Per T. Vaidya create new (.40); configure restricted rights for same (.40). | C. Macleod | 0.80 | 176.00 |
| 02/03/14 | Document load into Ringtail for review. | K. Lemke | 3.00 | 630.00 |
| 02/03/14 | Formatted data for a production per Tushar Vaidya. | C. Seaman | 3.00 | 375.00 |
| 02/03/14 | Call with G. Paloian regarding (.30); draft email to K. Goodhart regarding (.40); review prior correspondence with regarding (.40); review spreadsheets regarding (.40); call with R. Pinkston regarding (.30); review draft letter to S. Joiner regarding (.20); review cases regarding (.90). | C. Robertson | 4.70 | 2,773.00 |
| Date | Description | Timekeeper | Hours | Value |
| 02/04/14 | Update (1.20); Multiple emails with Pinkston regarding (.40); Multiple emails with Lemark and Training and management of (4.30). | T. Vaidya | 6.30 | 1,606.50 -1,096 |
| 02/04/14 | Analysis/srtrategy regarding | J. Priebe | 0.40 | 210.00 |
| 02/04/14 | Conference call with R. Pinkston regarding | J. Priebe | 0.20 | 105.00 |
| 02/05/14 | Communication with R. Pinkston and C. Harney regarding (.40); communicate with R. Pinkston regarding (.20); review correspondence from (.20). | G. Paloian | 0.80 | 520.00 |
| 02/05/14 | Continue to prepare letter regarding (3.50); continue legal research (2.90); conference with C. Harney regarding (1.20); conference with C. Harney and G. Paloian regarding same (.20); conference with C. Harney, J. Schmidt, and, A. Mahoney regarding (.60); review letter from counsel for (.10). | M. Pinkston | 8.70 | 3,610.50 |
| 02/05/14 | Exchange email with R. Pinkston and C. Harney regarding (.20); review production (.20). | R. Lutkus | 0.40 | 166.00 |
| 02/05/14 | Analysis/strategy regarding | M. Chnstoff | 2.40 | 780.00 |