Opinion
Bankruptcy No. 76-123.
September 13, 1985.
DECISION ON APPLICATIONS FOR ALLOWANCE
Before the Court are applications for compensation filed by Norman G. Orodenker, Esq., of the firm of Licht Semonoff, and Thomas Rosenfield, Esq., of the firm of Rustigian Rosenfield, for services rendered as co-counsel to the official Creditors' Committee. The applicants request $10,080 plus costs, for services performed from May 3, 1976 through October 19, 1976. They tell us that substantial time was expended as co-counsel for the Creditors' Committee, and that they rendered legal services which were "highly beneficial to the within estate" and which contributed directly to "the consummation of a Plan of Arrangement bringing to the creditors and stockholders a far better return on the obligations owed . . . than could otherwise be anticipated." Based on the record, we must conclude that these representations are groundless and, at best, inaccurate.
To begin with, the claim of substantial achievement or favorable result for creditors is puzzling, since the total assets ($10,500) are not sufficient to pay administrative expenses, let alone $400,000 in claims by general creditors who will receive nothing. In addition, the attorney for the debtor, who has billable time of $24,000, will be compensated for but a fraction of his effort, all of which, incidentally, appears to have been reasonable.
Because this is a nominal asset case, the issue of the value of services performed by the applicants is quite moot. Nonetheless, pursuant to our obligation to review all applications, see Blake v. Doyle (In re Doyle-Lunstra Sales Corp.), 19 B.R. 1003 (D.S.D. 1982), and after examining the nature of the services allegedly performed, we fail to see where co-counsel's activities were "highly beneficial" to the estate, as alleged, or of any benefit whatsoever.
In this case, we are compelled to point out that courts may not allow double compensation for the same services, where attorneys are acting jointly in the same capacity, see In re Potter's Gasoline Distribution, Inc., 41 B.R. 771 (Bankr.D.R.I. 1984); In re Sapolin Paints, Inc., 38 B.R. 807, 11 B.C.D. 875 (Bankr.E.D.N.Y. 1984); In re Crutcher Transfer Line, Inc., 20 B.R. 705 (Bankr.W.D.Ky. 1982), and that it is the court's responsibility to refuse compensation for excessive, unnecessary, or duplicative hours. See In re Liberal Market, Inc., 24 B.R. 653 (Bankr.S.D.Ohio 1982). It is clear, based on the time and nature of services described in each application, that counsel have engaged in unnecessary and unproductive duplication to a degree seldom seen here. The following entries from their respective applications, although not complete, illustrate the point.
Orodenker Rosenfield
4/16/76 Attend meeting of 4/16/76 Attend meeting of informal informal Creditor's Creditor's Committee at Committee at Galilee; Galilee; review petitions review petitions 4/26/76 Review schedules; 4/26/76 Review schedules; attend attend informal meeting informal meeting of of creditors; attend creditors; attend first first meeting of meeting of creditors creditors at Bankruptcy at Bankruptcy Court; Court; letter to letter to Creditor's Creditor's Committee; Committee; prepare Election Sheet prepare Election Sheet re re Creditor's Committee Creditor's Committee 5/3/76 Attend meeting of 5/3/76 Attend meeting of creditors; creditors; letter to letter to creditors and creditors and proof proof forms; letter to Marvin forms; letter to Marvin Brill; talked with various Brill; talked with creditors various creditors 5/20/76 Attend Creditor's 5/20/76 Attend Creditor's Committee Committee meeting; meeting; talked with Marvin talked with Marvin Brill; review balance sheet Brill; review balance sheet 5/21/76 Talked with creditors 5/21/76 Talked with creditors re re meeting of meeting of Creditor's Creditor's Committee Committee 5/25/76 Attend meeting of 5/25/76 Attend meeting of Creditor's Creditor's Committee Committee 5/26/76 Attend continued 5/26/76 Attend continued meeting of meeting of Creditor's Creditor's Committee; Committee; conference conference with secured with secured creditors creditors 5/27/76 Talked with Bradford 5/27/76 Conference with Marvin Brill, Gorham, Mr. Allen and Esquire and Lloyd Rustigian Lloyd Rustigan; talked re: Clamex with Marvin Brill re Clamex 5/28/76 Talked with Marvin 5/28/76 Talked with Marvin Brill; Brill; talked with talked with members of members of Creditor's Creditor's committee committee 6/1/76 Conference with counsel; 6/1/76 Conference with counsel; attend adjourned first attend adjourned first meeting of Creditor's meeting of Creditor's Committee Committee 6/15/76 Talked with Marvin 6/15/76 Talked with Marvin Brill re Brill re Order; talked Order; talked with Anthony with Anthony Vacca Vacca 6/24/76 Talked with 6/24/76 Talked with Narragansett Narragansett Electric Electric and Marvin Brill; and Marvin Brill; attend Creditor's Committee attend Creditor's meeting; talked with Committee meeting; Bankruptcy Court; talked with talked with Bankruptcy Brian Grimes Court; talked with Brian Grimes 6/25/76 Talked with Bankruptcy 6/25/76 Talked with Bankruptcy Court; talked with Tom Court; talked with Norman Rosenfield and Marvin Orodenker and Marvin Brill; Brill; letter to all letter to all members of members of Creditor's Creditor's Committee Committee 7/6/76 Talked with Al Factor 7/6/76 Talked with Al Factor re re stockholders stockholders 7/8/76 Attend meeting of 7/8/76 Attend meeting of Creditor's Creditor's Committee; Committee; talked with Mr. talked with Mr. Grimes, Grimes, Mr. Gershkoff and Mr. Gershkoff and Mr. Mr. Wheelock Wheelock 7/20/76 Talked with Marvin 7/20/76 Talked with Marvin Brill Brill 7/22/76 Attend meeting of 7/22/76 Attend meeting of Creditor's Creditor's Committee; Committee; attend court attend court hearing; hearing; conference with conference with Marvin Brill; talked with Marvin Brill; talked Narragansett Electric and with Narragansett Marvin Brill Electric and Marvin Brill 7/28/76 Talked with Lloyd 7/28/76 Talked with Lloyd Rustigian Rustigian 8/10/76 Attend meeting of 8/10/76 Attend meeting of Creditor's Creditor's Committee Committee at Bankruptcy at Bankruptcy Court Court 8/16/76 Talked with Mr. Legare; 8/16/76 Talked with Mr. Legare; conference with Mr. conference with Mr. Legare Legare 8/17/76 Talked with Mr. Legare 8/17/76 Talked with Mr. Legare and Marvin Brill 8/19/76 Talked with Mr. Legare; 8/19/76 Talked with Mr. Legare; conference with conference with Bankruptcy Bankruptcy Judge; Judge; attend hearing attend hearing 8/26/76 Sent copy of Greenwich 8/26/76 Review Greenwich Report; Report to all members talked with Marvin Brill and of Creditor's Narragansett Electric; Committee; review same; conference with Mr. Legare talked with Marvin and Mr. Wehr; conference with Brill and Narragansett Judge; review Clamex Order; Electric; conference attend continued first with Mr. Legare and meeting Mr. Wehr; conference with Judge; revise Clamex Order; attend continued first meeting 9/9/76 Attend court hearing 9/9/76 Attend court hearing and and conferences conferences 9/17/76 Talked with Marvin 9/17/76 Talked with Marvin Brill and Brill and Mr. Wehr Mr. Wehr 9/23/76 Talked with Tom 9/23/76 Talked with Norm Orodenker Rosenfield 9/27/76 Letter and Decree re 9/27/76 Letter and Decree re Hobart Hobart from Marvin from Marvin Brill Brill 9/29/76 Talked with Tom 9/29/76 Talked with Norman Rosenfield Orodenker 10/1/76 Talked with Tom 10/1/76 Talked with Norman Rosenfield and Orodenker and creditors; creditors; letter to letter to all members of all members of Creditor's Committee Creditor's Committee 10/7/76 Attend meeting of 10/7/76 Attend meeting of Creditor's Creditor's Committee; Committee; talked with Marvin talked with Marvin Brill Brill 10/15/76 Talked with Mr. Legare; 10/15/76 Talked with Mr. Legare; talked with bank talked with bank representative; attend representative; attend meeting with purchasers meeting with purchasers and Mr. Legare and Mr. Legare
In the application to employ co-counsel we are told that the retention of two attorneys was necessary because the "contemplated proceeding required substantial negotiation, conferences and documentation with proposed investors." Application to Employ Co-Counsel For Creditors' Committee, paragraph 4, dated May 6, 1976. It appears, at least in hindsight, that there was little that one attorney, much less two, needed to do or did do to protect or enhance the interests of creditors, and whatever litigation was necessary was handled exclusively by debtor's counsel, anyway. The activities of the applicants served mostly to keep themselves abreast of what Mr. Brill was doing, and we fail to see where the estate derived any benefit from the services rendered by either applicant.
As the people interested should be aware, we review every application in every case (regardless of size) carefully, and expect officers of this Court to do the same before causing applications to be filed. Boilerplate pleadings usually assist no one, and as evidenced here, may be quite counter-productive, considering counsel's representations that they contributed to "the consummation of a plan . . . bringing to the creditors and stockholders a far better return . . . than could otherwise be anticipated." In this case, no plan was ever confirmed, creditors and shareholders received no return, and ultimately, after numerous continuances of the originally scheduled October 26, 1976 hearing, the case was converted on April 9, 1985 to one under Chapter 7, with creditors' claims in excess of $420,000 left unpaid. Accordingly, the applications for services in question are denied entirely. The request for costs in the amount of $103 is disallowed since it is unsupported and undocumented.