In re United Telemanagement Corporation
I. Introduction
This matter is before the Court on the Interim Application of Christine B. Hill, as Attorney for Trustee, for Allowance of Compensation and Reimbursement of Expenses for the Period 8/20/24 Through 1/12/26 (Docs. #15 and #44) (Doc. 55) (the “Interim Fee Application“). The Interim Fee Application included a Notice of Interim Fee Application with twenty-one (21) day response period, in accordance with Local Bankruptcy Rule (“LBR“) 9013-1(a)(1)(C), and was served on all creditors and parties in interest pursuant to Federal Rule of Bankruptcy Procedure (“Bankruptcy Rule“) 2002(a)(6). There were no responses. Ms. Hill seeks the allowance of
II. Background
As referenced in the Interim Application, the Chapter 7 Trustee, Eileen K. Field (the “Trustee“), filed the Trustee‘s Application to Employ Special Counsel Christine B. Hill (Doc. 15) (the “First Application to Employ“) on September 24, 2024. The First Application to Employ asked that Ms. Hill be employed “as speciаl counsel for the Trustee, because there exist the possibilities of fraudulent transfer(s), preferential payments, and allegations of misappropriation of funds, embezzlement, and/or conversion, in connection with this bankruptcy estate.” First. Appl. to Employ at 1. It further provides that Ms. Hill‘s rate will be $275.00 an hour, “subject to the Court‘s approval.” Id. The Trustee “requested that an Order be entered authorizing the Trustee to employ Christine B. Hill as special counsel for the Trustee as set forth above.” Id. There was no mention of the date from which the Trustee was asking the Court to approve Ms. Hill‘s employment or whether Ms. Hill had already performed any work. On October 21, 2024, the Court entered the proposed Order Granting Trustee‘s Application to Employ Special Counsel (Doc. #15) (Doc. 18), which simply said the First Application to employ was granted.
On October 6, 2025, the Trustee filed a second Trustee‘s Application to Employ Special Counsel (Doc. 44) (the “Second Application to Employ“), “to expand the authority of previously appointed special counsel to the Trustee, Christine B. Hill, Esq., . . . for the purpose of filing an adversary proceeding to request a declaratory judgment regarding the limits of liability оn a policy of insurance issued by the Cincinnati Insurance Company covering occurrences of theft against the Debtor.” Second Appl. to Employ at 1. Again, Ms. Hill‘s proposed hourly rate was $275.00, “subject to the Court‘s approval.” Id. And again, there was no mention of the date from which the Trustee wished this expanded authority to take effect. There was no opposition and on November 12, 2025, the Court entered a proposed Order Granting Trustee‘s Application to Employ Special Counsel (Doc. #44) (Doc. 49), which similarly simply said the Second Application to employ was granted.
In the meantimе, there has been a fair amount of activity in this case, and the prior two adversary proceedings initiated by the Trustee (prior to the most recent adversary with The Cincinnati Insurance Company), by and through Ms. Hill, have been settled and closed. See Field
III. Analysis
A. Allowance of Interim Fees and Expenses
There are several issues the Court identified in reviewing this Interim Fee Application. First, neither the First nor Second Application to Employ, nor the Orders entered thereon, state an effective date for Ms. Hill‘s employment. This now matters because she is seeking approval for attorney fees starting on August 20, 2024, which was just over a month before the First Application to Employ was filed, and neither the First nor Second Application to Employ request a specific or retroactive date of approval of employment or justification therefore. Moreover, the default rule set forth in LBR 2014-1(e), which applies when a trustee engages themselves or their law firm as attorney, provides that “the employment shall be effective as of the date the application was filed, unless otherwise ordered by the court.” The Court has applied this same approach in chapter 11 cases such that if the parties do not explain whether the counsel or other professional they seek to employ has already done work and why, and why а retroactive date of employment is justified, the employment, if approved, will be from the date of the filing of the application, which is consistent with case law. See 3 Collier on Bankruptcy ¶ 327.03[3] & n.41 (16th ed.) (“The prevailing approach is that a bankruptcy court should grant retroactive retention orders only in extraordinary or exceptional circumstances to deter attorneys and other professionals from general nonobservance of section 327.“).
Accordingly, the analogous default under LBR 2014-1(e) and the case law would be that the earliest date from which fees can be approved is September 24, 2024. In this case, however, because: (1) this only concerns one month of work, specifically 5.175 hours of work; (2) it appears,
Second, the Court undertook to replicate Ms. Hill‘s calculation of the hours worked on this matter but could not calculate her total of 98.925 hours. Sometimes this occurs because of no charging travel time or making other adjustments to an invoice. But no matter how many times the Court did the calculation it could only identify a total of 98.70 hours, such that this is the number of hours it will consider for approval. Given that all the time is billed at the same hourly rate this is a very minor reduction of 0.225 hours (13.5 minutes) from the total 98.925 hours claimed.
Third, it is common practice to bill in tenths of an hour. See
Fourth, it is unclear what amount of travel time was not charged as it does not appear to be reflected in the attached Fee Schedule, although some of the time descriptions for which time is charged still include a description of travel. For example, looking at the first time entry dated December 16, 2024, it is unclear what amount of time was to “[t]ravel to and from UTC offices in Dayton for conference” as opposed to the conference time once in Dayton. This is in comparison to entries dated June 19, 2025 and July 14, 2025, which were solely for travel to and from Dayton that was not charged. The Court presumes that the above-referenced conference lasted for 2.4 hours and that the travel time not charged is not reflected in the Fee Schedule; however, it would be clearer if the travel time not charged was identified separate from the non-travel time charged so that there is no confusion as to whether the time charged still inсludes travel, but is backed out in the total.
Even absent any objections to the Interim Fee Application, the Court has an independent duty to review the fees and expenses sought. See, e.g., In re Spear, 636 B.R. 765, 769 (Bankr. S.D. Ohio 2022) (Humphrey, J.) (citing Cupps & Garrison, LLC v. Rhiel (In re Two Gales, Inc.), 454 B.R. 427, 432-33 (B.A.P. 6th Cir. 2011); In re Busy Beaver Bldg. Ctrs., 19 F.3d 833, 841 (3d Cir. 1994)). After reviewing the time entries attached to Counsel‘s Interim Fee Application, as well as the docket of this chaptеr 7 case and the related adversary proceedings, because all of the time, excluding travel time, was charged at the approved hourly rate of $275, and in accordance with the analysis set forth in the governing Sixth Circuit case law,3 the Court finds the fees and expenses are both reasonable and necessary, and hereby approves the allowance of the requested fees and expenses pursuant to
Although payment of interim fees may be awarded in chapter 7 liquidations under
The Interim Fee Application does not expressly state whether Ms. Hill is seeking to be paid her interim compensation and rеimbursement of expenses now and, if so, what the basis is for doing so in advance of a final distribution. She does represent that “[a] final application for further work and reimbursement of expenses is expected in connection with possible enforcement of the terms of the James and Tammie Hague settlement agreements and the continued prosecution of the case of Field v. The Cincinnati Insurance Company.” Interim Fee Appl. at 3. At this time there is no indication that the Trustee has determined whether the projected future administrative expenses and assets of the estate are such that select administrative expensеs can safely be paid now without creating a situation in which disbursed funds might have to be clawed back in order to make a pro rata distribution amongst administrative claimants. In other words, the Interim Fee Application does not state a basis upon which the Court is comfortable approving the immediatе payment of Ms. Hill‘s fees and expenses prior to a final distribution in this chapter 7 case that is anticipated to “take a period of years” to be resolved. See 3 Collier on Bankruptcy ¶ 331.06[1][a] (stating that “[w]hether payment of interim compensation is appropriate in a chapter 7 case will depend on sеveral factors, including” (a) the availability of funds; (b) the amount of other administrative expense claims “of the same or higher priority that might exhaust available funds;” (c) “the continuing need for funds to pay future necessary administrative expenses likely to be incurred in completing the administration of the case;” and (d) the “inability to file a final fee application in the near future.” (citing In re Com. Consortium of Cal., 135 B.R. 120, 124-25 (Bankr. C.D. Cal. 1991))).
IV. Conclusion
Accordingly, it is hereby ORDERED that the Interim Fee Application is hereby GRANTED as set forth in this Order and the Court awards attorney fees and reimbursement of expenses to Christine B. Hill, Esq. pursuant to
However, it is further hereby ORDERED that such amounts awarded shall not be paid from the estate unless and until the Trustee determines, based on the factors identified in this Order, that payment of the awarded fees and expenses to Ms. Hill will have no impact on the ability of the Trustee to рay all chapter 7 administrative expenses in full and can be safely paid prior to the final distribution of the estate‘s assets, and the Trustee files a motion and provides appropriate notice and opportunity to object to this determination with a supporting analysis of the projeсted administrative expenses and available estate assets, as well as the projected timing to a final distribution.
IT IS SO ORDERED.
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