535 B.R. 348
Bankr. D. Idaho2015Background
- Debtor Walker Land & Cattle, LLC filed a Chapter 11 petition on November 15, 2013.
- Wells Fargo required audited financial statements; Brower was employed as auditor to address this requirement.
- Radford, Brower’s attorney, was hired to assist Brower and to represent her; Radford was not retained as an estate professional.
- Brower submitted a Final Application seeking $38,797.25 in fees and $7,735 for Radford’s fees; the UST objected to the expenses portion.
- Court approved Brower’s employment but denied reimbursement of Radford’s fees as a necessary expense under 11 U.S.C. §330(a)(1)(B).
- The court ultimately sustained objections to Radford’s fees and approved Brower’s compensation, with Radford’s costs denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Radford’s legal fees are reimbursable as an expense under §330(a)(1)(B). | Brower | UST/Debtor | Not reimbursable; not necessary to complete Brower’s audit. |
Key Cases Cited
- In re Am. Preferred Prescription, Inc., 218 B.R. 680 (Bankr.E.D.N.Y. 1998) (reimbursement of counsel fees as expense approved where related to defense of retention)
- In re Geneva, Steel Co., 258 B.R. 799 (Bankr.D.Utah 2001) (expense reimbursement for counsel defending retained professional)
- In re Borders Grp., Inc., 456 B.R. 195 (Bankr.S.D.N.Y.2011) (expense reimbursement for counsel related to retention/fee applications)
- In re Crafts Retail Holding Corp., 378 B.R. 44 (Bankr.E.D.N.Y.2007) (per se rule denying reimbursement of non-retained professional’s legal fees as expenses)
- In re Specialty Plywood, Inc., 160 B.R. 627 (9th Cir. BAP 1993) (analyzed reimbursement of legal fees; later withdrawn; supports necessity standard)