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533 B.R. 632
Bankr. S.D. Ohio
2015
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Background

  • 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)
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Case Details

Case Name: In re Carter
Court Name: United States Bankruptcy Court, S.D. Ohio
Date Published: Jul 8, 2015
Citations: 533 B.R. 632; 2015 WL 4116676; Case No. 10-59509
Docket Number: Case No. 10-59509
Court Abbreviation: Bankr. S.D. Ohio
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