533 B.R. 632
Bankr. S.D. Ohio2015Background
- Debtor Georgia L. Carter filed Chapter 13 on August 8, 2010 and later had a confirmed plan.
- On August 6, 2013, Carter was injured in a car accident involving an uninsured driver; she retained the Firm on August 8, 2013 to pursue claims.
- Special Counsel did not begin work until August/September 2014, about a year after the Firm's retention, and then settled with Progressive and others.
- Special Counsel learned of Carter’s bankruptcy on September 23, 2014, and informed the bankruptcy attorney by email on October 17, 2014.
- Motion to Compromise filed November 10, 2014 sought approval of a $15,901 settlement with $3,300 to pay Firm/Special Counsel, which would be about 20.75% of the recovery.
- The Debtor filed the Application for authority to employ Special Counsel to prosecute the Progressive claim, but it was not filed until December 4, 2014.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether nunc pro tunc employment of counsel is appropriate. | Special Counsel seeks retroactive appointment to proceed with the claim. | Trustee/objectors require appropriate pre-approval; retroactive relief is extraordinary. | Approved nunc pro tunc employment due to equitable considerations. |
| Whether the employment complies with §327 and Rule 2014 requirements. | Special Counsel is disinterested and would have been approved originally. | Failure to comply with pre-employment procedures; notice given but not contemporaneous. | Application would have been approved but for timing; relief granted given circumstances. |
| Whether proper notice and lack of objections support the relief. | All parties in interest received notice and had opportunity to object. | No objections raised by creditors or the Trustee. | Notice and lack of objections support grant of the nunc pro tunc relief. |
Key Cases Cited
- In re McKenzie, 449 B.R. 306 (Bankr. E.D. Tenn. 2011) (discusses §327 and pre-employment requirements and screening)
- In re McDaniels, 86 B.R. 128 (Bankr. S.D. Ohio 1988) (necessity of court approval for professional employment; nunc pro tunc possible)
- In re Integrity Supply, Inc., 417 B.R. 514 (Bankr. S.D. Ohio 2009) (criteria for nunc pro tunc employment)
- In re Cooper, 263 B.R. 835 (Bankr. S.D. Ohio 2001) (limits on officious intermeddler; need for authorization)
- In re Jarvis, 53 F.3d 416 (1st Cir. 1995) (recognizes bankruptcy courts' discretionary retroactive relief)
- In re F/S Airlease II, Inc., 844 F.2d 99 (3d Cir. 1988) (discusses standards for retroactive approval)
