*1 that, corporate pro- if it as exist the dissolution statute Beazer insists even liabilities, protection. including its vides it no all of ALT’s sumed liabilities, liabilities ceased those CERCLA sum, we hold that Beazer succeeded to years three after under Delaware law to exist ALT’s CERCLA liabilities and liable as It thus concludes ALT’s dissolution. “owner” of the wood treatment facilities. Beazer as CERCLA liabilities whatever agreement expired liquidation sumed V. CONCLUSION in 1960. We conclude that Beazer liable as ALT’s has mis conclude that Beazer We successor and that Alcoa and CBI are not is, It relevant Delaware law. read the Therefore, operators. liable as we will affirm course, corpo Delaware true a dissolved judgment of the district court. years three after its ration ceases to exist that a cannot there dissolution and creditor corpo it to enforce a bring against suit Liq City Investing Co. obligation.
rate See Co., v. Cas.
uidating Trust Continental (Del.1993). This does not
A.2d
mean, however, entity separate a that where corporation of a dissolved
has received assets ENGEL, In re: Debtor. liabilities, William corporate a credi and assumed its bring a to enforce that tor suit HANTMAN; FERRARA & Robert separate against continuing en obligation Hantman, Appellants, J. tity. Supreme Court of Delaware so The City Investing, at 1191. 624 A.2d held v. court there concluded that creditor of ALVAREZ; Jesus Antonio Theodore J. corporation could file a a dissolved Delaware Liscinski, Jr., Trustee; United more than against liquidating claim trust Trustee. States years corporation’s after the dissolu three No. 96-5256. tion, liquidating trust had as where corporation’s liabilities. Because sumed Appeals, United States Court corporation “opt[ed] to dissolving had Third Circuit. entity separate legal to further its establish efforts,” that enti liquidation id. at Argued Nov. corpora at time ty [the “was existence Sept. Decided contingent liability ... matured and at tion’s] ]claim,” [ asserted its time[the creditor] 1197, § 278 of Delaware’s General Cor id. at against the
poration Law did not bar suit
liquidating trust. presented
If with our we believe the Supreme Court would allow Alcoa
Delaware press against claims Beaz-
and CBI to their liquidity City involved in
er. Like the trust entity, with
Investing, ongoing Beazer is an separate
an existence from the dissolved cor- corporate assets
poration, which received corporate obligations, and which ex-
assumed the time Alcoa and CBI’s
isted both time those claims arose and at the
CERCLA
parties Though their claims. asserted
prevents being ALT from sued Alcoa and date, continues at this late since Beazer
CBI *2 (argued),
Michael R. Perle Michael R. Perle, P.C., City. New York Hantman, Robert J. Hantman & Associ- *3 ates, City, Appellants. New York (argued), A. Nicolette Jeanette A. David Perkins, Oradell, NJ, Odynski, Nicolette & Alvarez, Appellee, Jesus Antonio as Ad- Prosequendum ministrator and as ad Admin- Alvarez, istrator of the Estate of Xiomara Engel, Xiomara also known as Deceased. Liscinski, Jr., Lanfrit, J. Liscin- Theodore Rosenwasser, P.C., Somerset, NJ, ski & Trustee, Appellee, Liscinski. Theodore J. BECKER, GARTH, Before: McKEE and Judges. Circuit THE OPINION OF COURT GARTH, Judge: Circuit question ap- we must answer on this The peal appointment special is whether Bankruptcy counsel under of the special requires that Code counsel’s services be from estate funds benefit to the where no We hold that 330 of has been achieved. requires that services Code by special counsel benefit the es- rendered tate before from estate funds Hence, affirm the district be authorized. we order, affirmed the bank- court’s which had denying compensation to ruptcy court’s order special counsel.
I. Engel In was convicted 1985William wife, his former Xiomara Alvarez.1 murder of upheld his Jersey Superior Court The New conviction, trial noting that “the voluminous In fairly guilt.”2 of defendants’ record reeks Alvarez, Antonio the Administra- Jesus Alvarez, filed a tor of the estate of Xiomara against Engel. wrongful death action N.J.Super. Engel, 592 A.2d v. Herbert were arrested State 1. William and his brother denied, charged (App.Div.), of Xiom- 130 N.J. contract murder cert. tried, convicted, subsequently (1991). ara. Both were 614 A.2d imprisonment. Herbert and sentenced to life prison. died 17, 1994, day, May the bank- dispute over his The next settled ruptcy approving court issued an order partnership with another broth- interest settlement, as counsel. er, to that retention of Hantman Pursuant Richard. pertinent part: paid more than 17 Order reads Engel is to be $5 William monthly million, installments of payable is, day May, 17th It on this $43,000, pay- with a balloon approximately Ordered, proposed that the Debtor’s reten- year in the 2004. He is ment of million $4.2 Hant- tion of the law firm of Ferrara and monthly install- million also to receive $1 man, Avenue, Company Bergen Trust $16,666.66. ments of 806, Jersey City, Building, Suite New Jer- herein, sey, counsel be and liability wrongful death ac- *4 hereby approved; same is and it is further April in 1993. tion was established Ordered, compensation spe- to such 1993, post- hopes securing in in the Late by cial counsel shall be determined this for mur- from his conviction conviction relief upon proper application. Court der, sought services of Robert Engel the added). 17,1994 (emphasis May Order Hantman, firm Ferrara & Hant- of the law Engel paid In a retainer of 1994, 6, January Engel for man.3 On filed $30,000 to Hantman. In estate bankruptcy, retaining the firm of Chapter 11 1994, September discovering after (Wasserman) Wasserman, as Jurista & Stolz made, payment had been the Alvarez estate debtor-in-possession. Engel counsel for as compel Hantman filed a motion to to dis- 21, 1994, when issue of On March Subsequent gorge the retainer. to an Octo- by Hantman’s retention was first raised Jur- 13, hearing disgorgement on the ber firm, bankruptcy ista of the Wasserman motion, bankruptcy court ordered Hant- that criminal defense services court warned 31, disgorge man to the retainer on October payable from the estate. be Engel appealed the order to the dis- 13,1994, court, debtor-in-possession En- April trict court On the district affirmed Wasserman, applied through bankruptcy for bank- gel order of the court. ruptcy approval of his retention of 31, 1995, On Hantman filed his first 14, special April Hantman as counsel. On application provided interim fee services Nicolette, attorney for David A. Engel’s counsel in criminal case. estate, bankruptcy
Alvarez wrote to the sought The fees the amount of objecting proposed to Hantman’s retention. $32,- $258,667.00, and costs the amount argued He that the criminal defense services 791.33. perform that Hantman would would benefit July year more than one Engel personally, bankruptcy but sought Hantman to be retained as that estate funds He contended Engel, Engel’s liability in counsel for could not be used to for such criminal wrongful death action was established at defense He also reminded the services. 15, 1996, million. March New On $5.154 warning given on court of the Jersey Superior Engel’s peti- Court denied 21,1994. March post-conviction tion for relief and his motion 19, 1994, April Hantman reviewed Ni- On for new trial. objections. eolette’s September holding hearing After on 16, 1994, application,
On
1995 on Hantman’s fee
the bank-
ruptcy
the services which
telephone
held a
conference to discuss the
court found that
proposed
provided
Hantman
criminal
retention of
and the ob- Hantman had
jections
by
Yablonsky
provided
case
no benefit to the bank-
raised
Nicolette.
had
not,
firm,
Nicolette,
estate,
therefore,
ruptcy
the Wasserman
on behalf
and could
estate, participated
paid
funds. Hantman filed a
Alvarez
estate
reconsideration, which was like-
conference call.
motion for
filed,
However,
appeal
law firm no
3. When the notice of
Robert J.
Ferrara & Hantman.
Appellants’
principal
longer
Br. at 4.
Hantman was a
in the law firm of
exists.
retention
bankruptcy court. On al’s
327 does not
by the
establish
wise denied
right
to be
20, 1995,
from the
December
Approval
327 estab-
of fees
opinions on the denial
issued
attorney
employed
lishes
that an
reconsideration,
the follow-
motion
in-possession,5
debtor
and not that
21,1995,
entered an order
ing day, December
employment will therefore or thereafter be
request.
denying
fee
compensated
Compensa-
from estate funds.
court,
appealed
to the district
that denial
tion from the
infra,
as we discuss
the December
1995 order
affirmed
depends
on the second look taken
April
bankruptcy court on
by §
court as mandated
April
appeals
from the
a determination of “benefit-to-the-estate.”
This
court.
court has
order
the district
Any
pursuant
debtor-in-possession
jurisdiction
appeal
to 28
over
—in
158(d).
case
receive court
—-must
attorney
profes
other
employ
or
review of the district court’s
Our
permitted
sional.
he is not
Otherwise
disposition
plenary.
authorized
counsel. This is
retain
true
legal interpretations
subject
are
court’s
regardless
of the source of
review,
findings
factual
plenary
*5
attorney
attornеy
An
engaged.
so
whose
er
court are reviewed
clear
§
employment
approved
enjoys
is
327
under
ror,
bankruptcy court’s
re
and the
decisions
presumption
compensation
no
that his
will be
awarding of fees are
garding the
reviewed
paid
§
from the
330.
estate under
Even
Zolfo, Cooper Co.
for abuse of discretion.
&
compensation is to come from some source
253,
(3d
Co., 50 F.3d
257
v. Sunbeam-Oster
estate, employment
than
other
of an at
Cir.1995).
torney by
debtor-in-possession
must still
approved by
court.6 An
II.
attorney
employment has not
whose
been
approved
required
§
under
327 can be
to
A.
compensation
provid
return
for the services
argument on
The essence of Hantman’s
debtor-in-possession,7
to the
even though
ed
327(e)
§
appeal is
under
es-
that “an order
they
paid
parties
by
and
were
third
not
right
legal
tablishes a
the estate.8
implicit
argues that it is
estate.”4 He
court,
A
even
though
appointment
special counsel that
is a
there
327,
§
approved
has
employment under
must
“benefit-to-the-estate.”
again
any application for
once
review
com
reject
argument,
pensation.
statute
We
The text of the
makes
profession-
approving
that an
of a
this clear.
review must be made
hold
This
under
in-possession]
Appellant's
required
4.
at
not
when his
are
Br.
fees
paid by
parties
third
do not come from
funds
estate.”),
belonging
aff'd,
§
the estate has been benefited
when
services,
1103(a), 330;
2014(a)
[per-
pay for the beneficial
Rules
and is to
compensation
taining
requirements imposed
§
to come
disclosure
under
329
debtor-in-possession
seeking
outside the estate. Sec-
trustee
from some source
approval],
§
provides
[pertaining
applica-
that after “notice to
tion 330
compensation
parties in
and to the United States
tion for
from the estate under
interest
330],
may
[pertaining
§
...
hearing
the court
trustee and
§
professional person employed
payments
court’s examination
award ...
to a
under
compensa-
attorney].”12
This con-
section 327 ...
reasonable
made
debtor
actual, necessary
cept
expressed by
writing
ren-
was best
the court
tion for
services
dered,”9
the estate.10
Corp.,
which
In re Johns-Manville
Thus, hearing argument on dis- Hantman made similar at the June 1995 retainer, $30,000 port in Hantman’s of his motion reconsideration gorgement of court, application: that the the fee “[I]t district Wasserman conceded denial of denying premature Fer- approval guarantee § did not that to enter initial 327 in paid Application Hantman’s Fee based would be from the estate: rara and Hantman Harris morning part assumption [of arguing you not on the “We are before not, Superior deny Jersey will bankruptcy judge] might Court] the New [the [post-' pow- for a in the motion new trial point proceedings, some have $30,000 jurisdiction relief] criminal case.”18 say er and the that the conviction 5, 1995, R., (emphasis Hr’g, Interim Fee 14. June at 6 Denial of Ferrara Hantman’s Tr. added). added). Application)(emphasis Indeed, 330(a)(4) § in as amended added). (emphasis 15. at 7 Id. prohibiting anticipated in have such occasions (Brief R., Opposition 16. Ex. at 11 to Motion were payment from estate funds unless services Require Ferrara & Hantman to Return Retain- "reasonably likely to benefit the debtor's estate.” added). Debtor)(emphasis hy er Paid 330(a)(4) part: provides pertinent Section compensation not court shall allow "[T]he Id. reasonably likely that were ... ... services estate." to benefit debtor’s (Memorandum R., Sup- Ex. at 7 of Law in added). 330(a)(4)(A)(1994)(emphasis § port Court’s of Motion Reconsideration of Thus, argument urged upon the application bank- court until Hantman’s fee was ruptcy point Hantman at that was court reviewed. We hold that not that it had been determined once and for § in holding ap- did not err all that the estate had been benefited at the proval per- established was granting § time of the order Hantman Hantman, mitted to retain and not approval, paid and that Hantman would be would be from estate funds Rather, from the estate. Hantman was con- provided criminal defense services to be tending yet court did not Engel. regarding enough have information the out- deny come of the criminal case to fees. B. the instant In Thus, Hantman successfully cannot main- clearly in holding correct tain that the denial of his fee Hantman, regardless of how he was to be § 330 was inconsistent with his reten- ,327
paid, approval § required before he could § tion as counsel under 327. Nor can employed by Engel debtor-in-posses contend that the cоurt’s find- sion, holding and in that fees could not be ing that provided Hantman’s services had no pursuant to showing awarded absent a benefit to clearly erroneous. fact, of benefit to the estate. the bank ruptcy specifically referred to our Ar in explaining necessity kansas decision per before could First, reject we argu
form services on behalf: ment that court’s denial of felt—and case it’s not clear on the 330 was inconsistent record, is, every and I think it I—in approving 327 order his retention. hearing up. that this has issue come But I Apart from the fact that reexamination of inappropriate have felt that was to use Hantman’s services for “benefit-to-the-es affirmatively estate funds to defend or to required tate” was the bank try prove a—a criminal matter. And ruptcy not, court made clear that it was yet said, look, consistently I have denying fees under revoking also its extent that following, Section § 327 order of retention.21 Code, says you can’t do being work without authorized. And I under which the circumstances think good there’s law that that is at least approved of Hantman’s re to be considered in—in Ar- Arkansas—the tention, addition, reveal that the extent, kansas case. To that I’ll allow 1994 order was well within the discretion of just them going to work. I’m to allow *8 court, though even might the court later money.19 them the deny application for fees under 330. Questions bankruptcy pay The court by to who would Hantman— had been advised Engel individually20or the estate—how much Wasserman and Hantman that there were when, paid, Hantman would be pay and were sufficient funds to all Engel’s creditors appropriately by deferred obligations, and including the fees to be R., 1, 1-H, Proceedings, Apr. Ex. Tr. of Engel resented then and later that 19. himself had 1995, at 21. ample discharge obligations. funds to all See infra, text and n. 22. retained, sought 20. At the time Hantman to be Engel’s liability the amount of to the estate of 21.Thus, during hearing the October 1994 Hence, yet Alvarez had though to be determined. al- $30,000 retainer, disgorgement Was- established, liability the fact of had been asked, reversing serman "Is Court the Order yet Engel’s it was not known how much of bank- responded, of Retention?” The ruptcy might exposed wrongful estate to the Indeed, says judgment. "No. The Order of Retention death he can do the Hantman himself—and Wasserman, prepared presented says who and work. The Order of Retention En- makes an gel's application Hantman—rep- for retention of when it’s all done." J.A. 127.
575 bankruptcy court circum- Nor did the reach its by Hantman.22 Under the sought conclusion, that was not the action of the bank- entitled of this ease stances monies, casually. In its December not exceed its discretion. estate ruptcy court did opinions carefully meticulously the court analyzed three-part standard which Duque, from In 48 evolved re B.R. 965 Second, did (S.D.Fla.1984), French, In 139 485 re B.R. finding that Hantman’s clearly err in (Bankr.D.S.D.1992), re United ease no Engel’s produced criminal services God, B.R. 50 Church Ministers to the estate.23 benefit (Bankr.E.D.Pa.1988), holding before that 15, 1996, Judge Harris denied On March Engel in representing services of Hantman trial, motion a new as well as Engel’s counsel, as criminal did not benefit the es- relief, in untimely petition postconviction tate. there had never been that show that terms The standard to which the post-conviction The any chance relief.24 referred, provided: been of “benefit-to-the-estate” has thus issue Engel rest. The view put attorney’s employment 1. The be in must trial, given new Harris’s deci- obtain a estate, the best interest of sion, obviously fanciful: property means of estate is threatened Brady Maryland, both and the for services is real. Em- [v. need [B]ecause ployment 10 L.Ed.2d cannot be based on some S.Ct. U.S. (1963) Washington, ‘hypothetical speculative benefit.’ ] [v. Strickland L.Ed.2d 466 U.S. 104 S.Ct. provide Special counsel must a benefit (1984) inquire probable analyses into ] estate, merely personal to the outcomes, by I begin on trial em effects benefit the debtor. benefit complete my conclusion: phasizing this by gauged needs of estate and whether ... reading of record demonstrates directly it is related the debtor overwhelming evidence faced possession’s performance of un- duties guilt.25 bankruptcy code. der the “Engel received a The court concluded regarding Issues debtor’s constitution- superior defense in a trial environment right al to counsel are of concern to rights.”26 The scrupulously honored his forum and not bank- the criminal properly anticipated such a ruptcy court. finding that Hantman’s services result Application of that standard to situa- matter had not benefited the criminal inexorably led to the court’s tion consistently instant it is clear that there has maintained In the 22. Hantman estate, obligations, will be all sufficient to its a reason- neither actual benefit nor will adverse of his fees have no to be of benefit able likelihood See, e.g., impact on the creditors. his Certifica- provided gained criminal defense services 10, 1995, tion of Oct. at J.A. 52. Engel. mea 23. The issue of when that benefit should be Opinion, Engel, v. Indictment 24. State Order sured, i.e., per the services have beеn Div., (N.J.Super. Ct. Law No. S-570-85-01 undertaken, they are need formed or at the time 15, 1996). March *9 330, as us this case. Section not concern in services, provides amended in that noted, petition “Engel filed his As Harris estate, compensable be "rea from the must to years post-conviction relief almost nine likely sonably to benefit estate.” 11 years judgment of after the conviction” —four 330(a)(4)(A)(ii)(I). ser Cases have held that filing. at 46-47. deadline for Id. vices, estate, compensated must to be from the See, provided to have actual benefit the estate. 25. Id. at 2. Kutner, e.g., Rubner & P.C. v. United States Trust (In Inc.), F.2d 1321 ee re Lederman Enter. 997 26. Id. at 51. Cir.1993); (In (10th v. re Alca Canatella Towers la), (9th Cir.1990). F.2d 99 918 576 application.27
denial of Hantman’s fee defense services which did not benefit the disputes estate. No one warning that such a finding bankruptcy court’s that Hant- was issued the course of the March estate, not benefit the man’s services did colloquy, bankruptcy spe- court short, clearly not erroneous. was cifically giving warning recalled still another May telephone conference: III. telephonic This Court hearing held a on argues that he was not objection of the estate of Ciamara [sic] 17,1994 prior warned at time Engel May on 1994. The Court stated that the bankruptcy retention order court that paid Ferrara & Hantman not could bankrupt would not allow from the from estate funds. The Court entered an cy estate for the criminal defense services he order which held that the debtor could providing Engel, and that he has counsel, but, quote, retain consequence. argues harm as a He suffered “Compensation for such counsel given that he no effective had been notice of by shall be determined this Court concerning payment the court’s reservations proper application.”29 funds, equities that opinion In the which he filed on December require paid the situation thus that he be 20,1995, bankruptcy judge repeated from the estate. telephonic court hearing “[t]his held on the argument Hantman made this before both objection of the Estate of Xiomara Alvarez bankruptcy and district courts. Both 1994. The court F stated that & rejected argument, courts as do we. paid H could not be from estate funds.”30 outset, At the we observe the denial of Nicolette, Attorney represented who the Ad- bankruptcy fees court was correct: estate, ministrator of supported Xiomara’s bankruptcy judge did have the au- judge’s fully, although recollection Ya- thority disregard the “benefit-to-the-es- blonsky of the Wasserman firm did not recall Thus, requirement tate” 330. as the the court’s statement.31 Hantman, bankruptcy responded court “I Hantman claims sympathetic your am plight, but I am imprecise retention order ambigu- bound the law.”28 ous. Even if agree, were to we and we do Even we were to assume that the Bank- not, accept we Hantman’s asser- ruptcy permitted bankruptcy Code court tion that imprecision because of an in an arguments to take account of Hantman’s court, bankruptcy order of the he should be not, prejudice, reliance and we could on this accept from estate funds. To his claim record, hold that Cooper ignore would be & Co. v. Zolfo rejecting abused its argu- discretion those Co., (3d Sunbeamr-Oster F.3d Cir. ments. 1995),in which we held that the burden rests with, begin To it was not unreasonable for applieant[for “on the to ensure that feеs] conclude, did, court to as it explicitly *10 counsel for was not in the best interest of estate, concluding, "[s]uch determination is J.A. 71.
577 sup- attorneys who siderable contact with refers to documents an order that that interests, representing his and who application of for reten- were plied support present those is- implicitly adopt any warnings set were when were terms tion does circumstances, documents, that sued. Under these we supporting forth in the hard-pressed conclude the bank- to that “particular to terms is not bound the court reject- ruptcy court abused its discretion in those compensation” unless conditions paid he ing Hantman’s claim that should be explicitly stated the relevant terms are § 330 because he had not received order.32 bankruptcy notice of the court’s effective bankruptcy ignore if the could Even warnings. express of “benefit-to-the-es- mandate 330, thereby give imposed Finally, although tate” note that Hant- we prejudice, it was Hantman’s claim of application properly fee credit man’s 330 de bankruptcy nied, not unreasonable for court’s our affirmance of district infer, despite April impact the fact Hantman does on order of 21,1994 present March discus- against neither at the make En- claim Hantman 16,1994 May sion, party funds, confer- gel’s nor a estate personal as distinct from call, attorneys Although losing Wasserman ence he has labored funds. —who represen- cause, de acting through as Hantman’s were when viewed lens facto rele- informing Hantman of all Jersey Superior tatives —were Judge New Court who de concerning proposed developments Engel’s petition post-сonviction vant re nied by Engel. lief, retention can look to Engel though Hantman still — payment.34 not to the estate —for Indeed, application fee Hantman’s detailed did not We hold engaged frequently he tele- shows denying fee abuse its discretion Hantman’s phone correspondence with Was- and written application. very attorneys subject serman tention, place these took one of calls 22, 1994, day the first on March IV. given.33 His also
warning was thoughtful charges Judge McKee’s dissent 19,1994, April that on reviewed shows having given no us with consideration objections that had made in a letter Nieolette on the Hantman’s reliance containing explicit April a letter 1994. He is also court’s order warning. reminder March argument that the persuaded Hantman’s its 17th order least court revoked thus access to at had direct compensation, bankrupt- it denied Hantman’s one document which reflected the (16) months cy con- sixteen later. warning, March some court’s (review added). Yablonsky to Zolfo, (emphasis of letter from F.3d 4/22/94 court) February through 33. From Yablonsky) (telephone conference with 4/25/94 application reveals numer- Hantman’s fee (review Yablonsky) of letter from 5/9/94 Yablonsky telephone con- conversations with ous (review Yablonsky; tele- of letter from 5/12/94 cerning the terms of retention: retention and Yablonsky) phone with conference Yablonsky) (telephone conference with 2/23/94 Yablonsky). (telephone with conference 5/13/94 Yablonsky) (telephone conference with 2/24/94 (review Yablonsky) letter from 2/26/94 opinion. Appendix also to this See Yablonsky) (telephone conference with 3/3/94 (letter Yablonsky) 3/7/94 34.Thus, rulings argument (telephone Yablоnsky) conference with 3/15/94 placed have him Yablonsky) (telephone conference with 3/22/94 contingency representing Engel Yablonsky) position on a (telephone conference with 3/28/94 basis, rules, (telephone Yablonsky) mis- conference with ethical is also in violation of 3/29/94 Yablonsky) (telephone court, again, conference with placed. has decid- 3/30/94 (review Yablonsky) of letter 4/7/94 not be will ed Yablonsky) (telephone conference 4/13/94 did not for services that benefit (review objections of Nicolette’s 4/19/94 § 330. See retention) *11 578 that the requisite finds it “obvious found as a to
McKee that the services Hantman court determined funds. ... were ‘in the best interest of
was to offer Finally, good has dissent offered no began that “Hantman his the estate’” and why analysis proceed reason should post-conviction pursuant efforts to seek relief Bucks, County Swietlowich v. 610 F.2d of (em- to Dissent at 582 that determination.” (3d Cir.1979), ease, non-bankruptcy added). phasis rather than under the 328 of relevant 328(a) Bankruptcy Code itself. Section al- however, arguments, fail The dissent’s modify the court deny lows and even explain take account or to that Hantman into previously approved terms and conditions of applied for fees for more than one hundred employment “if such terms and conditions prior entry hours of services rendered prove improvident to have in light been of May 1994 order. These services developments capable being anticipat- not of in outlined Hantman’s fee evi fixing ed at time of the of such terms and rely dence fact that Hantman on did not 328(a) (West conditions”.35 11 U.S.C. performing before ser order substantial 1993). Engel. working vices Hantman was approval long before the Here the appropriately —without — 17, 1994 May ever order was entered. finding based denial of fees on its Hantman’s services had not benefited the however, importantly, More the numerous Thus, there was no reason for the telephone which conferences have been de- engage 328 analysis. 33, swpra, Appendix in note and in tailed fiat, Congressional §§ As matter of opinion, this establish Hantman was operate together even after an attor- telephone in constant with communication ney has approved per- been concerning firm Wasserman the status of mit the court deny to alter or fees if it is months 17th retention before determined that no benefit to the estate re- order was entered. sulted the retention. facts, together with Those Hantman’s ad- objections of mitted review Nicolette’s to his y. retention, satisfy us that Hantman’s claimed will April We affirm the 1996 order of 17th reliance on order Hant- court, the district affirmed Decem- purported man’s lack knowledge that he ber funds, would not be from estate cannot denying application. Hantman’s fee carry day. Certainly, view record, agree we cannot McKee court abused its discre- Appendix denying tion application, Hantman’s fee significant leading events to this in- provided once it found Hantman had no appeal may stant be enumerated date as finding supported by benefit the estate —a follows: and, thus, clearly evidence record —January 1994. Engel filed for Indeed, erroneous. the dissent no ex- offers Chapter bankruptcy.
planation as to purported how Hantman’s trump —February reliance on 17th order can 1994. Hantman had a express the unequivocal telephone mandate conference with Daniel J. Ya- § 330 that “benefit to the blonsky estate” must be of Wasserman re: retention. 328(a) provides 35. Section that the trustee or the ed under such terms and conditions (such possession Engel) debtor employment, conclusion of such such terms may employ with the court’s ... a prove improvident and conditions to have been professional person under section ... 327 ... light developments capable being reasonable terms and conditions of anticipated fixing time of of such employment Notwithstanding ... such terms terms and conditions. conditions, compen- the allow 328(a)(West 1993). 11 U.S.C. compensation provid- sation different from the *12 24, were not in the interest had a criminal services —February Hantman 1994. estate, the court of remind Yablonsky re: telephone with conference 21,1994, its March caution to effect. retention. 19, —-April Hantman 1994. reviewed 26, —February 1994. Hantman re- objections Nicolette’s retention. Yablonsky re: re- from viewed a letter 22, —April Hantman a 1994. reviewed tention. Yablonsky letter 3, a tele- 1994. Hantman had —March court. Yablonsky re: re- phone conference with 25, —April 1994. Hantman had a tele- tention. phone Yablonsky with re: conference 7, a let- 1994. Hantman wrote —March status of retention. Yablonsky retention. ter to re: 9, —May Hantman a 1994. reviewed 10, wrote to 1994. Hantman —March Yablonsky letter from re: retention. retention, Yablonsky of re: Wasserman 12, —May Hantman reviewed a 1994. Engel’s into discussing his research retention, Yablonsky letter from re: criminal case. telephone a conference Hantman had 15,1994. had a tele- —March subject. Yablonsky ón the same with Yablonsky re: re- phone with conferеnce 13, —May 1994. Hantman had a tele- tention. Yablonsky phone with re- conference re: 21, In a discussion with —March 1994. tention. attorney, Engel’s Jurista Was- Steven 16, —May Telephone hearing 1994. Stolz, serman, regarding the Jurista & firm Yablonsky of the Wasserman with approving of Ferrara & possibility of Alvarez, Nicolette, attorney for employed as to be court warned that work, bank- criminal counsel to do criminal defense funds ser- ruptcy cautioned that criminal payable from the estate. payable out of the would not be vices 17, —May approved Order of re- 1994. tention of Ferrara & Hantman 22,1994. Hantman had tele- —March counsel, “compensation providing Yablonsky re: re- phone conference with special counsel shall be determined such tention. [bankruptcy] proper by this Court n —March 28,1994. Hantman had tele- application.” Yablonsky re: re- phone conference with 27, $30,000 —May 1994. tention, with and a minute conference Hantman from to Ferrara & retainer Engel to “discuss case.”. funds. 29, had a 24 1994. Hantman —March Hearing on motion 1994. —October with Ya- telephone conference minute At this disgorge Alvarez to retainer. blonsky re: retention. hearing, which occurred Hantman had anoth- —March 1994. wrongful death had liability for Alvarez’s telephone conference with er minute established, main- Wasserman been Yablonsky re: retention. estate had sufficient tained —April 1994. Hantman reviewed a However, the creditors.' funds to all Yablonsky re: retention. letter payment of coun- would not allow matter as an —April Engel, through Was- in the criminal 1994. sel fees serman, priority. applied administrative Hant- Hantman. to retain Ferrara & —October repayment telephone disgorgement man conference had ordered $30,000. Yablonsky re: retention. 31,1995. appli- First interim fee Nicolette, —May
—April
David A.
of Ferrara & Hantman.
cation
wrote to
attorney for the Alvarez
court af-
object to Hant-
district
—June
bankruptcy court’s order
ground
firmed
proposed
man’s
retention
$30,000
quiring disgorgement
court observed
given early
it had
warnings
Hantman.
and consistent
that criminal
*13
compensable
defense services were not
28, 1995. The
—June
United States
from the estate.
objected
portion
to that
Trustee
of fee
application seeking reimbursement
BECKER,
concurring.
Judge,
Circuit
provided
services
before
Judge
and,
Garth has written an incisive
I
approval
retention.
believe, ultimately
opinion,
correct
in which I
application in
entirety
Denial of fee
its
not,
join.
however,
I do
believe that
objection.
mooted
as
Judge
result is
clear as
Garth believes it
—July,
Engel’s liability wrong-
be,
a fact
that strongly
counsels
$5,154
action
ful death
established
Bankruptcy
should,
Judges
as a matter of
million.
fairness, explicitly
fundamental
persons
warn
—September
Hearing
on fee
327(e)
whose retention is authorized under
31,1995
application May
bank-
before
they
of the risk that
will
compensated
not be
court,
ruptcy
empha-
at which the court
they
produce
do not
a benefit to the estate.
only
sized that
services that benefit the
I
separately
write
to advance this view.
opposed to
services that bene-
Hantman’s argument proceeds from the
compensable
Engel personally,
fit
are
premise that
when the
Court
judge
from the estate.
noted that
appointment,
authorized his
knowing full well
telephone
in the
conference of
(to
purpose
attempt
his
to set aside
1994 he had
warned
the estate
conviction),
criminal
it impliedly found Hant-
pay
performed
would not
for services
in man’s services to be in
best
interest of
considering
the criminal case.
a mo-
(because
the estate
supported
the conviction
place
appoint
tion to
a trustee in
judgment against him,
the civil
and that
debtor-in-possession Engel,
judge
estate).
judgment was a debt of the
That
expressed
Engel
the belief that
me
seems to
to be a reasonable conclusion.1
squandering estate monies. At
Garth,
Judge
Unlike
I
do
find that the
hearing
again represented
Wasserman
paragraph
final
17 order made
estate would be able to
all
clear the risk
appointment.
inherent
creditors.
Rather, I
ambiguous,
find the order
and be-
Opinions
—December
filed on lieve that the October
proceedings
under-
application,
denial of fee
and on motion
ambiguity
score the
as I
demonstrate
reconsideration. The
margin.2
precisely,
Honor,
1. More
order
allow Hantman's
Mr. Nicolette:
I
Your
think that under
appointment,
here,
the court must have found that the
specifical-
circumstances
Your Honor
representation was "in
best
ly stating
interest of the
we
when
had the
and the
327(e). By
allowing
motion,
estate.” 11 U.S.C.
hearing on the
could not be
then,
appointment,
court seems
have
paid from the assets of the estate.
"reasonably
found that Hantman’s services were
say?
The Court: What does the order
estate,"
likely to
finding
benefit
debtor's
ambiguous.
Mr. Nicolette: The order is
necessary
for the
to allow
The Court: What does the order—the order is
327(e).
attorney appointed pursuant
an
Id.
ambiguous.
330(a)(4)(A)(ii)(I).
(The
рrovision
cited
says
Mr. Nicolette: The order
he will come
gave
330 was added after the events that
rise
application.
back and file an
However,
to this case.
the consensus is that the
Application.
The Court:
Yes. And I'll make a
provision merely
existing judi-
a codification of
determination then.
practice
precedent.)
cial
Perhaps
J.A.
merely
at 121.
the court was
peating
questioning
or
Nicolette’s statement.
example,
exchange
2. See for
between Nico-
However moments earlier Wasserman had ar-
lette,
counsel,
gued
Administrator’s
Bank-
as follows:
ruptcy
Honor,
suggested
Court. When Nicolette
Mr. Wasserman: Your
Mr. Hantman
believed,
believe,
court that it had indicated that Hantman's com-
your
as did we
order
pensation
personal-
encompassed
come
retention ar-
____
ly,
rangements
court referred to the
He
believed
$30,000
itself.
appropriate.
retainer was
He
pressure
Bankruptcy Judge
Judge
opin-
on the
at a time
By
Garth’s
my concurrence
non,
that,
ion,
ambiguity vel
acknowledge
new
case is
and there
hurdle
had to overcome
second
adequate
be neither the time nor an
pursu-
establishing
a benefit to
judgment.
for an
record
informed
Section
that I doubt that
ant to
330. I also note
are, understand,
signed
orders
often
Hantman;
indeed, I
favor
equities
here
prepared
colloquy
much
forms without
suspect
finding
fact
would result
Thus,
policy,
deliberation.
as matter of
ex
that,
many
during
conversa-
conclusion
post
preferable.
would seem
determination
Wasserman,
alerted
tions with
support
policy
Such
considerations
that he would not be
risk
position.3
Garth’s
*14
I
that the likelihood
the estаte.
also believe
explicit
Notwithstanding
analysis,
this
an
paid in
that Hantman would be
event
Spe-
appointees
in
alert
seems
order.
assets)
his
(given
of
was
the size
327(e)
appointees
§
purpose
will
cial
under
Finally,
strongest motivating factor.
Hant-
prior experience
often
individuals with no
7, 1994,
by
when the
man knew
October
with no famil-
courts and
filed,
disgorgement
motion for
practices
iarity
the
of
with
and culture
the
327(e)
§
to
appointment might be insufficient
They may
up investing
bar.
end
benefit,
proof of
him to fees without
entitle
huge
appointed
a
amount of time on their
and,
representation,
in-
continuing
in
rounds, only
compensation.
to
be denied
costs
his own risk.
curred those additional
view,
said,
my
it is
fair for the
prob-
All
institutional fairness
the
judge, upon making
special purpose ap-
a
governed by
cases
lem that will affect future
327(e),
precedent
large
§
for me.
clear
pointment
our
here looms
to make
to
appointee
non-payment
risks
the
the
of
or
basically at issue is whether the
What is
payment if it
determines that
reduced
later
required
to
Bankruptcy Judge should
not
the estate did
benefit.4
professional’s
that a
make the determination
likely
services will benefit
benefit the es-
observations,
Judge
in
With these
I concur
(see
1)
supra n.
or after those
tate
before
opinion
judgment
in
of
Garth’s
the
the
Requiring a
services have been rendered.
court.
is
to
precedential finding ex ante much fairer
McKEE,
Judge, dissenting.
probably puts
undue
Circuit
appointee,
the
but
1988),
tirelessly
pursuing
attorney’s
performed
in
is
wherein an
unethical conduct
has
denying compensation
post-conviction
was a factor in
to file the motion
about
bankrupt
personally
right
estate. The court
I
believe that he had a
convicted murder's
relief.
reject
rejoinder.
rely upon
thought
appeared to
The court
to
fact
he
it was
here
the
the
appropriate....
performed
"I’m not
sure that Mr. Wasserman’s
He’s
the services.
stated:
so
argument
wrong.
amount
is
There's
certain
of
*
*
*
Court,
ambiguity
there
is
in
Order of
question
no
ac-
no
but that there was
unethical
argument
one
I can make is that the
But the
attorney
interpretation
[as
here
there had been
case law is that
tion
of
Code
representing
in
Ministers
this
Heidnik
Church
kind of retention and
of
this
of
of
added).
(emphasis
special
appropriate
God].” J.A. at 119
of
counsel
where
kind
sought
being
would be in the best
the relief
328(a),
§
language
So too does the
of 11 U.S.C.
your
of
estate. And I
to
interest
submit
Judge
gives
power to
which
al-
unquestionable
that if
con-
Honor
it’s
compensa-
from the
low
different
certainly be
viction were overturned it would
§ 327
and condi-
tion decreed under
if the terms
best interest of the Debtor’s estate. And
appointment proved
tions
to have been
point
argue
I
whether at this
he
think to
about
developments
improvident
light of
not antici-
disgorge
to
and then make an
should have
fixing
pated
time
of such terms and
at the
application
already
services
rendered
provision, incidentally, does
This
conditions.
on that
then have Your Honor rule
apply
appointments
apply
it does
to all
hut
he’s
to file the motion that has
about
supporting
§
appointments
further
upon
prepa-
been based
hundreds
hours
Judge Garth.
going
be a
ration in an estate where there’s
gross
inequitable.
$7 million
would be
Indeed,
330(a)(4) “likely
§
rejoinder
phraseology
J.A.
included
at 116-118. Nicolette's
estate,”
prospec-
suggests
analogy
attempted
re
to benefit the
which
to In
United Church determination,
God,
(Bankr.E.D.Pa.
that result.
tive
seems to counsel
However, Hantman claims that neither Hantman argues that these excerpts show *19 that, bankruptcy debtor’s counsel nor the while there have been some confu- him warned that he would not be sion about employment, allowed the terms of his he compensation from the debtor’s estate. Dan- was never compen- told that he would not be Yablonsky, debtor, partici- iel counsel for the bankrupt’s estate, sated from the and the 1994, pated May the contrary conference call. negate conversations do not the de- He has regarding filed a certification that termination that his services were a benefit call which he “I do not implicit states: recall to the estate that the 330(a) U.S.C. 503 allows administrative ex- awarded under section as an administra- However, penses. negate expense that section does not tive under section and section 330(a) consideration specifically provides compensation of section 330 as 11 503(b)(2) specifically compensation persons appointed allows those under section 327. line, profession- wait in even with all of the that he continued He thus contends order. als. and order authorization rely that deny not thereafter the court could argues at This can J.A. 115-116. comment be inter- per- compensation for he the work him all preted Engel mean that must his authorized em- in furtherance formed personal Hantman’s services out of his funds. 327(e). ployment under bankruptcy Engel that “Mr. The stated pay,” the pay. can not that will How- opinion denying Hantman’s motion In its ever, remainder of the comment the indicates reconsideration, bankruptcy court the bankruptcy that court would allow com- the risk that Hantman assumed stated pensation out of estate funds. The latter non-compensation because he was “warned inescapably conclusion flows from the court’s 17,1994, early May repeatedly that[his] as as “priority”. reference paid to be out of the counsel fees were not Although bankruptcy estate.” J.A. ambiguity concerning The source bankruptcy court be- do not doubt that the compensation is also evidenced he that had that Hantman understood lieved hearing during exchange later be- risk he would not be Nicolette, counsel, warned about the been tween Administrator’s all, compensated at even the court. When Nicolette agrees the circumstances sur- that suggested to the court that the court indicat- ambiguous. rounding appointment are compensation ed that Hantman’s would come early was aware as as While debtor’s counsel personally, bankruptcy court that itself. court referred to order paid to be not allow Hantman’s fees Honor, I Mr. Nicolette: Your think undisputed it is from the debtor’s here, under the circumstances Your Honor telephone party Hantman was not a specifically stating appli- we had addition, call that date. conference on motion, hearing cation on the nothing in the record that before there he not be from the of the could assets that debtor’s counsel told us that establishes substance say? The the order Court: What does statements at either the March court’s The ambiguous. Mr. Nicolette: order is hearings. or the Yablonsky’s knowledge or- imputes The What does order —the Garth Court: Hantman, impossible ambiguous. on this but that is rec- der is ord, beyond appellate it is our function. says The come Mr. Nicolette: order will application. back file an Moreover, transcript the October I’ll Application. Yes. And The Court: 1994, hearing disgorgement on the retainer make a determination then. pres- suggests that Hantman was motion See or as a witness. ent either counsel transcript Admittedly, the J.A. at 120-21. fact, 14,1994, J.A. at 107-29. In October indicate whether the does not hearing regarding disgorgement Hant- simply repeating questioning court was guidance clear provides man’s retainer little ambiguity. Nicolette’s statement about generally. issue However, had moments earlier Wasserman ambigu- court’s comments were argued as follows: at best. comment is illustrative. ous One Honor, Hant- Your Mr. Mr. Wasserman: believe, believed, your man as did we thought The issue before me—and telephone encompassed an order this is what was resolved arrangements____ tention He' believed if it was not clear conference and $30,000 retainer my difficulty then as well—that if it’s *20 available, performed tire- appropriate. was He has are Mr. can there funds file the lessly pursuing and is about to difficulty priority. here Is he pay. The is person- $30,000 post-conviction relief. I fig- motion for think that’s entitled —I rely right ure, ally that he had up going it front or he believe is not — upon thought appro- justified fact that he it was under benefit to the estate. priate____ performed He’s the services. my That’s view.
[*] [*] [*] J.A. at argument But I the one can make is that Further, notes, Judge Becker see con- interpretation by of the Code case law curring opinion at May is that pay- this kind of retention and the authorizing Hantman’s retention is it- ment of this kind of counsel is ambiguous. self While that order did men- appropriate being sought where the relief payment, tion only it it mentioned insofar as would be in the best interest of the estate. compensation to note that would be deter- I your And submit to Honor that it’s un- upon application. However, mined an questionable that if this conviction were order did reference application, certainly overturned would be in the which was annexed to the order best interest of the Debtor’s estate. And I included a fee referring schedule. argue think to point about whether at this application, annexed May 17 order states disgorge have should and then make good “and appearing cause for the therefrom application an already for services ren- making of this application Order.” The stat- dered and then have Your Honor rule on ed affl 8: “The respectfully Debtor submits when he’s about to file the completely that it is appropriate both motion that has been based hundreds the retainer ongoing and the cost post- of his preparation of hours of in an estate where conviction property relief out of of the es- going there’s to be a gross million $7 tate.” may understand that the order well inequitable. “boilerplate” have been in form and content J.A. at rejoinder 115-118. Mr. Nicolette’s and that may well simply have attempted analogy included to In re Unit signed generic language acting upon God, ed Church swpra, Ministers Engel’s application. However, that does not attorney’s wherein an unethical conduct was language Indeed, void the of the order. we denying compensation a factor in from a parties documents, hold to the contents of all bankrupt convicted murder’s estate. The language the time. The 17 order appeared reject rejoinder. The advised, well have been ill but that does “I stated: am not sure that Mr. Was not make the go away, 17 order nor argument serman’s wrong. There’s a cer it a legal nullity. render tain ambiguity amount in the Order Court, and question there is no but preceding The respective recitation of the there was no unethical action here there [as positions parties concerning whether had been attorney representing Heid Hantman knew or only should have known is nik in Church Ministers God].” J.A. at of added). offered because I believe that there is a (emphasis This is a recog clear legitimate dispute about Hantman’s knowl- nition court that the order edge that his would not come ambiguous. from the estate. I do not think that issue Finally, when the spoke here, can be decided and should be decided about whether the 1994 order al- only upon opinion, remand. In his Judge compensation, lowed the court seemed to lim- appears Garth to conclude that Hantman it its comments to the retainer: early 21, 1994, knew as as March that he Honor, Mr. Wasserman: Your can I ask compensated would not be from estate as- point for a of clarification? Is the court sets. Majority Becker, See reversing the Order of Retention? his concurring opinion, expresses view, equities may Court: No.... did not make a favor determination, Hantman, Wasserman, Mr. but also that proper that he after a fact- to a finding process, entitled retainer. I’ll reconsider Hantman would be found to on the any application issue of when he have known that he was not to makes it but I believe that it has to be opinion funds. See Concurring at 581. *21 may distinguishable I that my correct believe is colleagues well be Both of Zolfo However, we not fact- issue an score. are the situation here. The here is not that function the trial ambiguity approved compen- That is the of as to an rate of finders. 330(a)— given I see is the proper inquiry and what under sation —a that there candid concession propriety court’s initial appointment. but the position, in Hantman’s arguable merit Thus, some not as that I am convinced offers Zolfo record, the as estab- not believe that I do colleague any as In guidance my us is. far, conclusively as a determines lished so event, question. I we need not reach that do when, if, law or Hantman had matter of suggest ambiguity that resolved not the be knowledge that actual constructive either I against that for or Hantman. believe from the compensation would not come his given opportunity should an to be part majority opinion, In IV of the prove upon extent to which he relied that Hantman could not Judge Garth notes order, May any that such reliance was upon May 17 order because have relied in view reasonable of all circumstances representation he has billed the estate surrounding appointment representa- and date. purportedly undertaken before that (but to) including, certainly not tion limited judge factor This is a that 17,1994 order. remand, it clear- upon consider is would scrutiny I cannot that re- conclude weigh heavily against that ly a factor would special compensa- quired when counsel seeks however, not, position. I do 330(a) permits a tion under de novo review deny supports to think that decision implicit question of the retention (including reim- all prior versal of a order under with- expenses) under the ratio- all bursement any analysis. pre- But equitablе out that is bankruptcy court. Absent nale used happened cisely what here. expenses and explanation, “pre order here, and, remedy certainly appropriate most deducted compensation” could Swietlowich, claimed, may indeed, they required the one the total fees so convince the is to remand that the even really upon inquiry into the appropriate Hantman never relied conduct an can all) However, (if analy- at all. that is the 17 order at to which Hantman reason- degree performed sup- order, must be ably sis that believe court’s 17th relied bankruptcy court’s do port actions. any prejudice extent of and the circumstances, that, these believe subsequent not court’s have resulted from the justi- actions court’s can implicit reversal of that order. Remand by relying upon a de statute, law, novo review fied required our case and the 327(e) appointment using Hantman’s section driving Congressional policy enactment in hindsight purportedly found refraction 330, Congress con- enacting In 330(a). section professional want to that no would cerned setting, so it included work concerning ambiguity The discussion professionals competent to ensure that support May 17th is offered order get adequate compensation for ser- particular position, but demon- Busy bankrupts. re vices rendered legitimate argument is a strate there (3d Cir.1994). Beaver, 19 F.3d 849-50 ambiguity the order create that the could Thus, once coun- it seems me that could be impression that estate funds 327(e), he or appointed section sel is Garth, counsel. used assump- right proceed under the she has ambigu- conceding while professional his or labors tion that her ous, resolving any ambiguity believes at a expenses compensated will be reasonable fly face of our Hantman’s favor would can establish to the extent that counsel rate Cooper & Co. v. Sunbeam- decision Zolfo (3d a reasonable Co., Cir.1995), performed the work was F.3d Oster professional manner consistent with holding that a fee Judge Garth reads §in Those factors enumerated resolving has factors applicant the burden reviewing court to ensure ambiguity Majority in an order. See allow *22 billed, spent, expenses hours in- sight time analysis reconsideration absent an un- reasonable, and consistent der curred were Swietlowich. attorney’s undertaking to assist the es- example, appoint-
tate. For counsel 327(e) ought charge
ed under not to $2,000 compensate
estate a fee of him or trying
her to recover an asset worth
$1,000.
I realize 330(a)(4)(A)(ii)(I) (II)
§§ preclude authorizing compensation
court from for ser- “reasonably likely
vices that were not estate; necessary benefit the debtor’s MARTIN, Appellant, Keefe M. case”, however, the administration of the v. provisions usually apply believe those will properly appointment more to an DANA CORPORATION 327(a) where there has been no initial de- proposed termination that services will No. 96-1746. benefit the estate. In the rare situation United Appeals, States Court of where counsel is authorized under Third Circuit 327(e), and counsel engages then in a representation course of or conduct that is Sept. beyond scope authorization, of his or her operate subsection would also to limit or SLOVTTER, Present: Judge, Chief prevent compensation from the estate. How- BECKER, STAPLETON, MANSMANN, ever, is not our cannot GREENBERG, SCIRICA, COWEN, 330(a) Congress conclude that intended NYGAARD, ROTH, LEWIS, ALITO. allow for a appointment de novo review of an McKEE, Judges. Circuit previously authorized under with no analysis further than occurred here. suggest
I do not that a remand here would mean that Hantman automatically receives ORDER every requested cent that appli- in his fee SLOVITER, Judge. Chief cation. contrary, On the the amount of his compensation will only by be limited not A majority of judges the active having extent to which he can establish that he voted, it is reasonably relied 17th order ORDERED that the Clerk of this Court 330(a). but also criteria set forth in vacate July the order filed granting Moreover, to the extent that funds remain rehearing en banc and refer the case to the after debts of properly the estate are dis- original panel panel rehearing, origi- charged, be able to recover panel having nal so voted. some or all of his fees from personally. That certainly be a relevant consider-
ation of the in determining extent, any, what Hantman will prej- (in by denying
udiced him recovery whole or part) bankrupt’s from the mean,
A however, remand does
original appointing him under section
327(e) cannot nullity by be rendered a hind- The Notes his interim had filed fee with explain “Payments court, to a Reports § 329 that court potential attorney provide then, debtor’s serious opportunity pass upon “have an protection provisions of creditor evasion performed work and make a determination laws, potential of and serious respect to what believe is the real attorney, overreaching the debtor’s is, issue, and that best interests the es- of subject scrutiny.” careful should tate.”15 vein, scrutiny by mandated In a similar Wasserman’s brief attorney- $30,- under 330. The opposition disgorge stricter still to the motion to ap such Hantman —whose employment explained as retainer proved fees from who seeks plain made ultimate deci court had that the § 330 that his the estate under must show on entitlement the estate sion fees from necessary services were made in the case: would not be until later benefited supra, despite approval n. 10 see ruling objection “In on initial raised 327(e). In re of See his retention the retention of criminal Alvarez to Johns-Manville, Arkansas, supra; In re su that, counsel, this Court made clear as with pra. counsel, the retention the ultimate issue the allowance are re [sic] Indeed, ap- fees although argues by the Court until the conclusion served peal the issue whether his services arguing the case.”16 that Hantman should in the interest of estate was decided were $30,000 required to retain not be return the approved special counsel when he was er, contending that Wasserman —far in the proceedings before already the “best interest” determination had courts, bankruptcy and district members grant been made court’s decision agreed question firm Wasserman that the issue of actually bene- whether services —maintained
Notes
notes the terms and condi- that Hantman had received effective applicant notice tions if the expects them to be that estate funds would not for criminal early point.” established at that We stated explained 27.The extremely fact sensitive decision and is one extensively criminal conviction had been is within the discretion of the through including Supreme Ct., viewed Op. Bankruptcy (Ap- court.” Dec. Jersey; Court of New A14). before benefit pellant’s Br. at possibly could accrue to the Engel’s criminal conviction would have to be J.A. 169. overturned; Engel acquit- would then have to be ted at a judgment new criminal trial and the civil J.A. 202. against him would also have to be overturned. Finally, applied Duque J.A. 19. analysis employing and determined that criminal