At a hearing on October 7, 1981 this Court considered applications of various parties involved in the above-captioned cases for allowances of compensation and disbursements. By a previous order of this Court, allowаnces were fixed for all parties except for the law firm of Weil, Gotshal & Manges (“Weil”), counsel for the seven bank creditors of the Debtors (the “Banks”). Weil’s application was held for this separate consideration to exаmine the appropriateness of allowances under Bankruptcy Code § 503(b)(4), 11 U.S.C., to counsel of a creditors’ committee which is not the official Creditors’ Committee. Recognizing the authorization for such allowances under the Code, the ability of this estate to pay such allowances, the absence of objections to such allowances, and Weil’s substantial contribution to the successful reorganization of the Debtors, this Court allows the payment to Weil оf $115,000.
Weil seeks compensation in the amount of $95,969.90 plus disbursements of $19,-030.10 for services rendered from March 10, 1980 to August 31, 1981. Weil’s apрlication, which the Court commends for its detail, indicates that 1135 hours were expended during the period, 25 percent оf which time was expended by Weil partners. The average hourly rate for Weil’s requested allowance is less than $85.00. The applicant has been previously paid by their clients, the Banks, and the amount awarded by this Court will be refunded to the Banks.
From the inception of these cases, Weil has actively participated in virtually every aspect of thе reorganization process. Weil was retained on January 15, 1980 by the Banks, which had extensive financial interests in the Debtоrs. After the Debtors’ March 18, 1980 filing of their Chapter 11 petitions, Weil aided the securing of inter-company cash advances among the Debtors, facilitated the operation of the Banks as an organized creditors group before thе Creditors’ Committee was appointed, and generally oversaw the relatively smooth, cooperative, аnd productive progress of these cases. Later in these cases, Weil’s efforts to reconcile the Debtors and creditors and to negotiate and consummate the reorganization were instrumental in the promulgation of the Plan of Reorganization. The Plan provides two options to creditors: immediate payments equal to 60 perсent of their claims or payments over time of 100 percent of their claims with interest. Throughout the proceedings Wеil has represented the Banks. Nonetheless, Weil’s involvement in these cases, its expertise, and the services it has rendered have made a substantial contribution to the successful reorganization of the Debtors.
Section 503(b) of the Bankruptcy Code authorizes allowances of compensation for counsel to the Banks. In Chapter 11 casеs, section 503(b)(3)(D) allows reimbursement of expenses for a “committee representing creditors.” Subsection (4) allows rеasonable compensation for services rendered by an attorney of an entity which can receive еxpenses under subsection (3). 11 U.S.C. § 503(b)(3), (4). Such compensation was not permitted in Bankruptcy Act Chapter XI cases.
See, e.g., In re FAS International, Inc.,
The policy aim of authorizatiоn of such compensation is to promote meaningful creditor participation in the reorganization prоcess.
See In re National Lock Co.,
Section 503(b)(3) and (4) authorizes compensation for legal services rendered in making a substantial contribution to a Chapter 11 case. 11 U.S.C. § 503(b)(3), (4). This is so even if the services rendered by counsel are for its client. The cоrrespondence of Weil’s self-interest in serving its clients, the Banks, and the interests of the Debtors in a successful reorganizаtion, does not bar compensation to Weil from the Debtors. Otherwise, creditor participation in reorganizаtion might be discouraged. The appropriate test of compensable services is whether they substantially contributed to the successful result.
In re Consolidated Motor Parts,
Services which substantially contribute to a case are those which foster and enhanсe, rather than retard or interrupt the progress of reorganization.
In re Investor Funding Corp., Id.
at -,
citing, In re Interstate Stores,
This Court emphasizes that the Debtor’s estate is well-able to pay the allowances granted with no impairment of other creditors. The Court also notes not only the absence of objeсtion to Weil’s application but rather a warm recommendation by the Debtors and the Creditors’ Committee that it be allowed.
For the foregoing reasons, this Court awards the applicant compensation of $95,-969.90 and disbursements of $19,030.10.