K BAR A RANCH, 1:22-bk-10004

The case involves a Chapter 12 bankruptcy filed by K Bar A Ranch, with First Pioneer National Bank (Creditor) asserting a $4M oversecured claim against Debtor, secured by real property valued at $9.5M.
Creditor requested approval of $49,767 in attorneys’ fees and $6.70 in costs under 11 U.S.C. § 506(b), while Debtor objected to the fees as unreasonable.
The main dispute during bankruptcy centered around the interest rate and whether a “status quo” provision (preserving prepetition loan terms) would be included in the plan.
The parties eventually settled on plan terms, including the status quo provision, leading to confirmation; all disputes except attorney fees were resolved informally, without contested hearings.
Debtor’s counsel requested only $22,655 in fees for broader representation, compared to the Creditor’s $49,000 request solely focused on Creditor issues.
The Court held an evidentiary hearing on the reasonableness of the fee application; no testimony or exhibits were introduced.

Issue	Creditor's Argument	Debtor's Argument	Held
Is Creditor entitled to fees under § 506(b)?	Yes—Creditor is oversecured and the agreement allows for fees.	Agrees entitlement but disputes reasonableness.	Yes, but only reasonable fees.
Are the requested fees reasonable under § 506(b)?	Fees were needed to protect Creditor’s position, address unique issues, and reflect increased client communication.	Fees excessive: duplicative work, unnecessary explanations, and double that of Debtor’s attorney.	Requested amount unreasonable; approves $12,500 based on comparable cases and court analysis.
Was the fee application sufficiently supported?	Asserts work was justified; provided time entries and a supplemental table.	Application failed to analyze reasonableness or apply local rules and past precedent.	Application lacked adequate detail; court fills gap but stresses future compliance with local rules.
Should the entire fee be approved as requested?	Yes; argued as reasonable and proportionate to claim size.	No; highlights duplicative, lumped, and insufficiently delegated time, and routine matter.	No; finds excessive communication and inadequate billing judgment; approves only a portion.

In re Salazar, 82 B.R. 538 (B.A.P. 9th Cir. 1987) (discussing allowance of attorney’s fees under § 506(b) for oversecured creditors)
Countrywide Home Loans, Inc. v. Hoopai, 581 F.3d 1090 (9th Cir. 2009) (§ 506(b) requirements and limitation to pre-confirmation fees)
In re Atwood, 293 B.R. 227 (B.A.P. 9th Cir. 2003) (burden of proof on applicant to show reasonableness of fees)
Ursic v. Bethlehem Mines, 719 F.2d 670 (3d Cir. 1983) (discussing appropriate delegation of work between lawyers and paralegals/associates)