George Walton's Gold and Diamond Company, Inc, 632 B.R. 693

Debtor George Walton’s Gold & Diamond Co. filed Chapter 7 after the owner’s death; substantial jewelry inventory remained on the premises.
Trustee retained attorney William Artus the day after the petition; Artus billed $400/hr and sought $30,220 in fees and $235.20 in costs.
Trustee decided to keep inventory in the store safe pending an online auction; Artus assisted in arranging and obtaining approval for the auction.
The U.S. Trustee (UST) objected to 24.54 hours ($9,780) of Artus’s billing as noncompensable administrative work (inventory coordination, insurance, auction logistics, security/travel, photographing).
The court previously approved uncontested portions ($20,440.00 + costs); this decision addresses the challenged 24.54 hours.
The court disallowed most challenged time as trustee duties not legal services, but allowed 3.2 hours ($1,280) for early case meetings and a buyer-call.

Issue	U.S. Trustee's Argument	Artus / Trustee's Argument	Held
Whether attorney fees may be charged for inventory/insurance/auction coordination and other routine estate administration	Time spent coordinating inventory, insurance, auction, securing premises, and travel (24.54 hrs) are administrative trustee duties and thus noncompensable	Tasks were done at the Trustee’s request and necessary to protect estate; counsel should be paid	Sustained: majority of challenged entries are nonlegal trustee duties and not compensable under §§ 327/330; disallowed most fees.
Whether early case meetings and limited communications are compensable legal work	Objected to some early entries as administrative	Early meetings and a call were necessary to understand and manage the representation and to deal with a potential buyer’s counsel	Overruled in part: allowed 3.2 hours ($1,280) for initial meetings (April 7 & 9) and a June 23 call; all other challenged time disallowed.

In re Garcia, 335 B.R. 717 (B.A.P. 9th Cir. 2005) (attorneys compensable only for services requiring expertise beyond ordinary trustee duties)
In re Perkins, 244 B.R. 835 (Bankr. D. Mont. 2000) (attorney may not be paid for performing trustee fiduciary duties)
In re Crutcher Transfer Line, Inc., 20 B.R. 705 (Bankr. W.D. Ky. 1982) (same principle disallowing fees for trustee functions)
In re McKenna, 93 B.R. 238 (Bankr. E.D. Cal. 1988) (distinguishing legal services from routine administration)
Unsecured Creditors’ Comm. v. Puget Sound Plywood, Inc., 924 F.2d 955 (9th Cir. 1991) (compensability depends on whether services are legal rather than administrative)
In re Virissimo, 354 B.R. 284 (Bankr. D. Nev. 2006) (threshold inquiry: were services legal services?)
In re Meade Land & Dev. Co., 527 F.2d 280 (3d Cir. 1975) (attorneys not entitled to compensation for assuming trustee duties)
In re Lexington Hearth Lamp & Leisure, LLC, 402 B.R. 135 (Bankr. M.D.N.C. 2009) (routine estate administration is generally a trustee duty)