Opinion
Bankruptcy Case No. 10-40743-JDP
01-09-2013
In re: The Leed Corporation, Debtor.
MEMORANDUM OF DECISION
On November 9, 2012, attorney Nathan M. Olsen filed his First Application for Interim Compensation per 11 U.S.C. § 331. Dkt. No. 691. In the application, Olsen requests approval by the Court for payment of $100,441.25 in compensation, and $328.19 in expenses, in representing the chapter 11 Debtor The Leed Corporation during the course of this bankruptcy case. The application is supported by Mr. Olsen's affidavit, which includes a detailed itemization of the services provided, and the time expended in doing so, and his explanation for the basis for his request for fees and costs. Dkt. No. 692.
On December 3, 2012, Mitchell R. Campbell filed the sole objection to Olsen's application. Dkt. No. 701. In the objection, Campbell, referring to himself as a "creditor", argues that Olsen should not be paid the fees requested computed on an hourly basis, because Olsen had agreed to be paid a contingent fee based solely on amounts recovered in the litigation in which he represented Debtor, and that because, in Campbell's opinion, "there was a net loss and no gain for the estate" as a result of Olsen's services. Id. at 8. In sum, Campbell believes Olsen's fee request is excessive.
On December 12, 2012, the Court conducted a hearing on Olsen's application, and Campbell's objection thereto, at which both Olsen and Campbell appeared and argued. At the conclusion of the hearing, the Court took the issues under advisement, and directed Olsen to give notice of his application on additional parties in the case. Notice was properly given, Dkt. No. 705; no other objections have been filed.
Counsel for the U.S. Trustee also appeared at the hearing on Olsen's fee application. Other than the notice concerns, the U.S. Trustee has expressed no opposition to Olsen's fee request.
This decision resolves the issues raised by Campbell's objection to Olsen's application. Simply put, the Court finds and concludes that the application should be granted and the objection overruled. See Fed. R. Bankr. P. 7052, 9014. Here's why:
1. Campbell lacks standing to object to Olsen's application because Campbell will suffer no adverse pecuniary impact as a result of the outcome of the dispute.
As noted, Campbell asserts in his objection that he is a creditor in this case. Earlier in the bankruptcy case, Campbell filed a proof of claim, but Debtor objected to its allowance, and sued Campbell to determine his status. After much litigation, the parties resolved their differences via a compromise evidenced by a stipulation which, among other things, determined treatment of Campbell's claim. Dkt. No. 639. Other than the property to be distributed to Campbell via the stipulation, Campbell agreed to waive "any and all" further claims in the bankruptcy case. Id. at 6. The terms of the parties' stipulation was then incorporated in Debtor's Fifth Amended Chapter 11 Plan. Dkt. No. 654 at 18. Campbell voted in favor of confirmation of that plan, see Ballot No. 107, Amended Ballot Summary, Dkt. No. 673, and after notice and a hearing, the Court eventually confirmed the plan in an order which Campbell also expressly approved. See Order Confirming Chapter 11 Plan, Dkt. No. 681 at 3.
The point of this recitation is simple: Campbell is bound by the terms of the confirmed plan, 11 U.S.C. § 1141(a), and therefore, Campbell will receive no further distributions from Debtor under the plan. As a result, Campbell's rights will not be impacted, unfavorably or at all, by the Court's decision concerning Olsen's fee application.
The standing doctrine limits those who may appear and be heard by a court in a proceeding to those parties with a direct stake in a proceeding's outcome. See Sierra Club v. Morton, 405 U.S. 727, 731-32 (1972); In re JohnsManville Corp., 68 B.R. 618, 624 (Bankr.S.D.N.Y.1986). Whether a party has a sufficient "direct stake" in a bankruptcy proceeding is most often based on whether the party has an actual pecuniary interest in the outcome of the controversy. See Duckor Spradling & Metzger v. Baum Trust (In re P.R.T.C., Inc.), 177 F.3d 774, 777 (9th Cir.1999) (citing Fondiller v. Robertson (In re Fondiller), 707 F.2d 441, 442 (9th Cir.1983)); Abbott v. Daff (In re Abbott), 183 B.R. 198, 200 (9th Cir.BAP1995); In re Stone, 03.2 I.B.C.R. 134,135 (Bankr.D.Idaho 2003).
In this case, Campbell has no standing to object to Olsen's fees because he has no actual pecuniary interest in the outcome of this contest.
2. Olsen's requested compensation is proper.
The Court acknowledges that, even absent Campbell's objection, the Court has an independent duty to review the reasonableness of Olsen's fee request. 11 U.S.C. § 330(a)(1); Lobel & Opera v. United States Trustee (In re Auto Parts Club, Inc.), 211 B.R. 29, 33 (9th Cir. BAP 1997) (citing Busy Beaver Bldg. Ctrs), 19 F.3d at 841. The Court has done so in this case. Based upon this Court knowledge of and familiarity with these proceedings, it is apparent that Olsen performed extensive, competent, necessary, valuable services for Debtor in this case. Moreover, his services are well-documented, and the fees he requests are amply justified in his affidavit and otherwise in this record. In particular, there is nothing in the record restricting Olsen's right to request an hourly fee, nor limiting him to some sort of contingent fee in this case. An hourly fee is a reasonable approach to compensating Olsen in this case. Any argument by Campbell to the contrary lacks merit.
In the exercise of its discretion, the Court concludes that the amount requested by Olsen for compensation, together with the amount requested for reimbursement from expenses, is reasonable and will be approved. A separate order will be entered approving Olsen's application.
____________
Honorable Jim D. Pappas
United States Bankruptcy Judge