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In re Mount Diablo Young Men's Christian Association

United States Bankruptcy Court, Ninth Circuit
Jul 29, 2010
10-44367-EDJ-11 (B.A.P. 9th Cir. Jul. 29, 2010)

Opinion


In re: MOUNT DIABLO YOUNG MEN'S CHRISTIAN ASSOCIATION, Chapter 11, Debtor. No. 10-44367-EDJ-11. United States Bankruptcy Court, N.D. California. July 29, 2010.

          MEMORANDUM RE MOTION FOR REVIEW OF TRANSACTION

          EDWARD D. JELLEN, Bankruptcy Judge

         The above debtor has filed a motion requesting the court to review a payment of $32, 704.04 it made to Union Bank ("Union") to cover the attorneys' fees portion of Union's demand for full payment of its secured claim herein. See Bankruptcy Code § 506(b). Union made the demand, and the debtor made the payment, in connection with the closing of a sale by the debtor of property on which Union held a lien.

         The debtor also requests the court, based on its review, to determine the amount of reasonable attorneys' fees it owes Union as part of Union's secured claim, and order Union to return any excessive portion of the fees the debtor paid.

         The debtor's motion alleges that the debtor "never received an accounting" of the fees it paid Union, and that Union refused to provide same. Debtor also alleges that "Union... has not provided any evidence of legal services upon which a determination of reasonableness can be made."

         The debtor's motion does not explain how the court is to determine reasonableness in the absence of an accounting or "any evidence of legal services." Nor does the motion state why the debtor cannot utilize the numerous tools available to a party in a bankruptcy case to obtain information. See, e.g., Fed. R. Bankr. P. 9014(c) and 2004.

         Suffice it to say that it would not be appropriate for the court to conduct discovery, formal or informal, to obtain the information the debtor lacks. Nor would it be appropriate for the court to preside at any hearings at which the court, rather than the debtor or creditor's committee, is acting as Union's adversary with respect to the issue of Union's appropriate payment out of the estate. Nor can the court engage with Union or its counsel in any exchanges of information and legal argument, or settlement discussions (all part of the normal process of dispute resolution).

The court appreciates the fact that it has an independent duty to review applications for fees filed by officers of the estate, even in the absence of an objection. In re Busy Beaver Building Centers, Inc. , 19 F.3d 833, 841 (3d Cir. 1994); In re Auto Parts Club, Inc. , 211 B.R. 29, 33 (BAP 1997). Union, however, is not an officer of the estate required to submit a fee application.

         The court will therefore issue its order denying the debtor's motion, without prejudice to any further proceedings initiated by any party in interest regarding any payments to Union that the debtor made during the course of these chapter 11 proceedings.


Summaries of

In re Mount Diablo Young Men's Christian Association

United States Bankruptcy Court, Ninth Circuit
Jul 29, 2010
10-44367-EDJ-11 (B.A.P. 9th Cir. Jul. 29, 2010)
Case details for

In re Mount Diablo Young Men's Christian Association

Case Details

Full title:In re: MOUNT DIABLO YOUNG MEN'S CHRISTIAN ASSOCIATION, Chapter 11, Debtor.

Court:United States Bankruptcy Court, Ninth Circuit

Date published: Jul 29, 2010

Citations

10-44367-EDJ-11 (B.A.P. 9th Cir. Jul. 29, 2010)