Opinion
BK 11-14829
08-17-2023
In Re: Pasquinelli Homebuilding, LLC, et al., Debtor(s).
(Jointly Administered)
Chapter 7
FINDINGS OF FACT AND CONCLUSIONS OF LAW IN SUPPORT OF AN ORDER ON THE FOURTH INTERIM APPLICATION FOR ALLOWANCE OF COMPENSATION AND REIMBURSEMENT OF EXPENSES TO KUTCHINS, ROBBINS &DIAMOND, LTD., AS THE ACCOUNTANT TO THE CHAPTER 7 TRUSTEE, ALEX D. MOGLIA (DOCKET NO. 1444)
HON. JACQUELINE P. COX, UNITED STATES BANKRUPTCY JUDGE
| Total Fees Requested: $10,183.75 | Total Costs Requested: $0.00 |
| Fees Disallowed: $357.50 | Costs Disallowed: $0.00 |
| Total Fees Allowed: $9,826.25 | Total Costs Allowed: $0.00 |
| Total Fees and Costs Allowed: $9,826.25 |
This matter comes before the Court on the Fourth Interim Fee Application of Kutchins, Robbins &Diamond, Ltd. ("KRD"), as accountant to the Chapter 7 trustee (the "Trustee"), for compensation for services rendered and reimbursement of expenses incurred for the period August 1,2022 through June 30,2023 (the "Fourth Application") (Dkt. No. 1444). It appearing to the Court that (i) it has jurisdiction over the matters raised in the Fourth Application; (ii) proper and adequate notice of the Fourth Application has been given and no further notice is necessary; and (iii) upon consideration of the Fourth Application and the record, and after due deliberation, for good cause shown, IT IS HEREBY ORDERED that: the Fourth Application's request for fees is disallowed in the amount of $357.50.
The disallowance in the amount of $357.50 is for the following time entries:
Date
Staff
Task
Hours
Amount
Rate
05/24/2023
West, Lois
Prepare workpapers for 2022 year end. Summarize receipts and disbursements for 2022 for each entity and post activity to trial balance. Begin preparation of 1120.
6.00
$1,950.00
$325.00
05/25/2023
West, Lois
Prepare federal and states corporate returns for IL, IN, SC and NC for 2022. Update disclosure information and attach to returns.
5.00
$1,625.00
$325.00
I. Rationale for the Disallowed Fees
Bankruptcy courts have the "independent authority and responsibility to determine the reasonableness of all fee requests, regardless of whether objections are filed." See In re Wildman, 72 B.R, 700,705 (Bankr. N.D.Ill. 1987) (citations omitted); see also In re Vancil Contracting, Inc., No. 06-71254,2008 WL 207533, at *2 (Bankr. C.D. Ill. Jan. 25,2008) (citations omitted). Section 330 of the Bankruptcy Code governs compensation and provides, inter alia, that the court may award to professionals "reasonable compensation for actual, necessary services" rendered by such professionals. In re Wildman, 72 B.R. at 707 (citing 11 U.S.C. § 330).
1. Lumping
"The standard in this District for compensable time entries has been for over thirty years that the applicant must account for its time in minimum increments of tenths of an hour." In re Direct Media Power, Inc., No. 16BK36934, 2018 WL 4726012, at *3 (Bankr. N.D.Ill. Sept. 28, 2018), aff'd, No. 18 C 7397, 2019 WL 4601736 (N.D. Ill. Sept. 23, 2019) (citing In re Wildman, 72 B.R. at 708-09, 726).
The court may impose a ten percent penalty for "lumping." In re Wildman, 72 B.R. at 709 ("Applicants may not circumvent the minimum time requirement or any of the requirements of detail by "lumping" a bunch of activities into a single entry... . Each type of service should be listed with the corresponding specific time allotment.") (citations omitted)); see In re Direct Media Power, Inc., 2019 WL 4601736, at *3 (citations omitted). For this reason, fees are reduced by 10 percent each for the time entries above (i) on May 24, 2023, for 6.00 hours of work at $325 per hour, for a total of $1,950.00 in fees and (ii) on May 25, 2023 for 5.00 hours of work $325 per hour, for a total of $1,625.00, for a total reduction of $357.50. See Fourth Application (Dkt. No. 1444), Ex. A, p. 2.
II. Allowed Fees and Expenses
In light of the foregoing, it is HEREBY ORDERED that:
1. KRD's Fourth Application (Dkt. No. 1444) is granted in part, and denied in part.
2. KRD is allowed and awarded, and the Trustee is directed to pay, compensation in the amount of $9,826.25, and reimbursement of expenses in the amount of $0.00 (together, "Compensation and Reimbursement"). The total Compensation and Reimbursement awarded is $9,826.25.
3. The Compensation and Reimbursement awarded shall be allocated amongst the Debtors in accordance with the Court's Order dated November 2, 2021 (Dkt. No. 1303).
4. The Trustee is authorized and directed to pay all Compensation and Reimbursement that has not otherwise been paid through interim monthly fee statements out of any undedicated funds on hand.
5. This Order is entered without prejudice to further requests for compensation detailed within the Fourth Application and not included in the Compensation and Reimbursement in this Order and/or from the Fourth Application period.