Thomas Clayton Ballard and Elizabeth Dail Ballard, 13-03948

Debtors filed Chapter 11 on June 24, 2013 and sought to employ Trawick H. Stubbs, Jr. and Stubbs & Perdue, P.A. as counsel.
The Firm received a pre-petition retainer of $11,200 and had $16,716.94 in pre-petition fees owed at petition date.
The Firm executed a $100,000 future advance promissory note secured by a future deed of trust to cover pre- and post-petition fees.
The Bankruptcy Administrator objected that the Firm was not a disinterested professional under 11 U.S.C. §327(a).
The Court followed Duffus & Associates and limited pre-petition fees to a narrow scope related to petition preparation, to sustain disinterestedness.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Firm is disinterested under §327(a).	Ballard argues the Firm’s pre-petition debt disqualifies it.	Firm contends pre-petition services related to petition preparation do not negate disinterestedness.	Yes, limited pre-petition debt may permit disinterestedness with constraints.
Whether pre-petition fees can be included for disinterestedness.	Debtors acknowledge pre-petition fees but seek allowance.	Fees primarily for petition preparation should be allowed if narrowly scoped.	Pre-petition debt must be modest and tightly scoped to petition preparation.
What conditions govern the employment grant.	N/A	N/A	GRANTED subject to review of First Application for Compensation and possible waiver/hearing of objectionable pre-petition fees.

In re Duffus & Associates, P.A., No. 05-03886-8-JRL (Bankr. E.D.N.C. Aug. 8, 2005) (approved pre-petition debt must be modest and tied to petition preparation to remain disinterested)
Shuck v. Seminole Oil & Gas Corp., 963 F.2d 368 (4th Cir. 1992) (footnote supports leeway where debt is related to debtor's bankruptcy)
Harold & Williams Development Co. v. U.S. Trustee, 977 F.2d 906 (4th Cir. 1992) (outline of disinterestedness and bankruptcy objectives)