479 B.R. 247
Bankr. E.D.N.Y.2012Background
- Movant Corash & Hollender, PC sought approval of a $7,500 flat fee under 11 U.S.C. § 330(a)(4)(B) for Chapter 13 representation of Nicholas and Stephanie Moukazis.
- Trustee Marianne DeRosa objected, contending the flat fee exceeds customary Eastern District rates for routine Chapter 13 cases.
- Debtors paid $1,000 of the Flat Fee pre-petition; Movant billed 35.80 hours totaling $8,382.50 for the case.
- The case was straightforward: a March 2012 petition, plan filed the same month, a single 341 meeting, and a single confirmation hearing.
- The Plan provided for a step-up payment to unsecured creditors and full payment of a $6,500 portion of the Flat Fee to the movant.
- Court concluded the Flat Fee was not reasonable and awarded $5,000 as reasonable compensation under 11 U.S.C. § 330(a)(4)(B).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is $7,500 a reasonable flat fee for this Chapter 13 case? | Corash argues higher quality/overhead justify the fee. | DeRosa notes customary Eastern District fees are $3,500–$5,000 for similar cases. | No; $7,500 not reasonable. |
| Do customary fees and time expended support the flat fee approach? | Corash cites time/overhead as justification for the flat rate. | DeRosa asserts standard rates and minimal services rendered do not support the flat fee. | Not persuasive; does not justify $7,500. |
| Should public policy considerations limit fee flexibility in Chapter 13 cases? | Corash emphasizes policy interests in compensating quality representation and overhead. | DeRosa highlights need to protect debtors/creditors and avoid overcompensation that could hinder access to counsel. | Policy concerns acknowledged, but fee capped at $5,000. |
Key Cases Cited
- Dabney, 417 B.R. 826 (Bankr.N.D.Ga. 2009) (public policy and reasonableness of fees in bankruptcy)
- Wesseldine, 434 B.R. 31 (Bankr.N.D.N.Y. 2010) (public policy concerns and debtor representation impact on fees)
- Thorn, 192 B.R. 52 (Bankr.N.D.N.Y. 1995) (reasonableness bounds and minimal services doctrine)
- Busy Beaver Bldg. Ctrs., Inc. v., 19 F.3d 833 (3d Cir. 1994) (court's duty to consider public policy in awarding fees)