The amendments have reversed that analysis, providing for a preliminary calculation of reasonable compensation from the commission percentage under §326(a), subject to court review for reasonableness pursuant to §§ 330(a)(1) and (7). See,e.g., In re Healy, 440 B.R. 834 (Bankr. D. Idaho 2010); In re McKinney, 383 B.R. 490 (Bankr. N.D. Cal. 2008). The Bankruptcy Appellate Panel in In re Salgado-Nava analyzed section 330(a)(7) and its interplay with Section 326's statutory commission.
[T]he amount of any award of compensation to a trustee must be reasonable based on the extent and value of the trustee's services. See In re Healy, 440 B.R. 834, 83536 (Bankr. D. Idaho 2010); In re Coyote Ranch Contractors, LLC, 400 B.R. 84, 94-95 (Bankr. N.D. Tex. 2009). Accordingly, a trustee's request for compensation may be reduced or denied if the services expended were not in the interests of the estate.
See 11 U.S.C. §§ 326, 330(a)(3), (7). Nonetheless, the amount of any award of compensation to a trustee must be reasonable based on the extent and value of the trustee's services. See In re Healy, 440 B.R. 834, 835-36 (Bankr. D. Idaho 2010); In re Coyote Ranch Contractors, LLC, 400 B.R. 84, 94-95 (Bankr. N.D. Tex. 2009). Accordingly, a trustee's request for compensation may be reduced or denied if the services expended were not in the interests of the estate.
See In re Luedtke, No. 07–70924, 2011 WL 806003 *3 (Bankr.C.D.Ill. Feb. 28, 2011) (“Courts ... have consistently held that Chapter 7 trustee compensation remains subject to court review for reasonableness. See, e.g., In re Clemens, 349 B.R. 725 (Bankr.D.Utah 2006); In re Ward, 366 B.R. 470 (Bankr.W.D.Pa.2007); In re Mack Properties, Inc., 381 B.R. 793 (Bankr.M.D.Fla.2007); In re McKinney, 383 B.R. 490 (Bankr.N.D.Cal.2008); In re Phillips, 392 B.R. 378 (Bankr.N.D.Ill.2008); In re Healy, 440 B.R. 834 (Bankr.D.Idaho 2010); In re B & B Autotransfusion Services, Inc., 443 B.R. 543 (Bankr.D.Idaho 2011)”). Despite having reached the consensus that the commissions must still be found to be reasonable, courts do not agree on what “reasonable” means.
See, e.g., In re B & B Autotransfusion Servs., Inc., 443 B.R. 543, 550 (Bankr.D.Idaho 2011); In re Healy, 440 B.R. 834, 835–36 (Bankr.D.Idaho 2010); In re Ward, 418 B.R. 667, 675–78 (W.D.Pa.2009); In re Coyote Ranch Contractors, LLC, 400 B.R. 84, 94–95 (Bankr.N.D.Tex.
As of the date of this Decision, there are no controlling appellate decisions that alter the law as set out in B & B Autotransfusion.B & B Autotransfusion analyzed and relied on well-respected treatise authorities and on a number of cases decided since 2005, including In re Healy, 440 B.R. 834 (Bankr.D.Idaho 2010). In this prior decision, the Court relied on In re McKinney, 383 B.R. 490 (Bankr.N.D.Cal.2008), for a “methodology for determining reasonableness with an eye on the statutory cap.”
The addition of § 330(a)(7) has lead some chapter 7 trustees — although not the Trustee here — to argue that the maximum percentage commissions set forth in § 326 are now the fixed percentages which should be routinely allowed in virtually every case. Courts having considered such arguments have, however, universally rejected them and have consistently held that Chapter 7 trustee compensation remains subject to court review for reasonableness. See, e.g., In re Clemens, 349 B.R. 725 (Bankr. D. Utah 2006); In re Ward, 366 B.R. 470 (Bankr. W.D. Pa. 2007); In re Mack Properties, Inc., 381 B.R. 793 (Bankr. M.D. Fla. 2007); In re McKinney, 383 B.R. 490 (Bankr. N.D. Cal. 2008); In re Phillips, 392 B.R. 378 (Bankr. N.D. Ill. 2008); In re Healy, 440 B.R. 834 (Bankr. D. Idaho 2010); In re B B Autotransfusion Services, Inc., ___ B.R. ___, 2011 WL 144907 (Bankr. D. Idaho Jan. 18, 2011). In determining the full impact of the addition of § 330(a)(7) to the Code, this Court must start by giving plain meaning to the language of the statute.
The question of the allowance of Trustee compensation under § 326 and § 330 was recently addressed by this Court. In re Healy, 2010 WL 3719916 (Bankr.D.Idaho Sept.16, 2010). This prior decision of the Court frames the issue and establishes the basis upon which Trustee's Application is reviewed.
The questiOn Of the allOwance Of Trustee cOmpensatiOn under § 326 and § 330 was recently addressed by this COurt. In re Healy, 2010 WL 3719916 (Bankr. D. IdahO Sept. 16, 2010). This priOr decisiOn Of the COurt frames the issue and establishes the basis upOn which Trustee's ApplicatiOn is reviewed.