Case No. 13 B 14126
AMENDED FINDINGS OF FACT AND CONCLUSIONS OF LAW IN SUPPORT OF ORDER GRANTING APPLICATION OF QUARLES & BRADY LLP, ATTORNEYS FOR TRUSTEE, FOR ALLOWANCE OF FINAL COMPENSATION AND REIMBURSEMENT OF EXPENSES
| || |
TOTAL COSTS REQUESTED:
TOTAL FEES REDUCED:
TOTAL COSTS REDUCED:
TOTAL FEES RESTORED:
TOTAL COSTS RESTORED:
TOTAL FEES ALLOWED:
TOTAL COSTS ALLOWED:
TOTAL FEES AND COSTS ALLOWED: $116,461.05
The time and expense entries have been underlined to reflect disallowance in whole or in part. The basis for each disallowance is reflected by numerical notations that appear on the left of each underlined entry. The numerical notations correspond to the enumerated paragraphs below.
(2) Unreasonable Time
The Court denies the allowance in part of compensation for the following task since the professional or paraprofessional expended an unreasonable amount of time on this task in light of the nature of the task, the experience and knowledge of the professional performing the task, and the amount of time previously expended by the professional or another on the task. In re Pettibone, 74 B.R. 293, 306 (Bankr. N.D. Ill. 1987) ("The Court will determine what is the reasonable amount of time an attorney should have to spend on a given project... An attorney should not be rewarded for inefficiency. Similarly, attorneys will not be fully compensated for spending an unreasonable number of hours on activities of little benefit to the estate."); In re Wildman, 72 B.R. 700, 713 (Bankr. N.D. Ill. 1987) (same).
As to the time devoted to the preparation of the fee application itself, the Court denies the allowance of compensation that is disproportionate to the total hours in the main case. In re Wildman, 72 B.R. 700, 711 (Bankr. N.D. Ill. 1987) ("In the absence of unusual circumstances, the hours allowed by this Court for preparing and litigating the attorney fee application should not exceed three percent of the total hours in the main case."); In re Spanjer Bros., Inc., 203 B.R. 85, 93 (Bankr. N.D. Ill. 1996) (compensation limited to 5%). See also In re Pettibone Corp., 74 B.R. 293, 304 (Bankr. N.D. Ill. 1987) (citing Coulter v. State of Tennessee, 805 F.2d 146, 151 (6th Cir. 1986) (in non-bankruptcy cases., compensation for preparation and litigation of fee petitions limited to 3-5% of the hours of the main case)).
(4) Insufficient Description
The Court denies the allowance of compensation for the following task since the description of the time entry fails to identify in a reasonable manner the service rendered. In re Pettibone, 74 B.R. 293, 301 (Bankr. N.D. Ill. 1987) ("A proper fee application must list each activity, its date, the attorney who performed the work, a description of the nature and substance of the work performed, and the time spent on the work. [Citation omitted] Records which give no explanation of the activities performed are not compensable."); In re Wildman, 72 B.R. 700, 708-9 (Bankr. N.D. Ill. 1987) (same).
The Court may impose a ten percent penalty for "lumping." In re Wildman, 72 B.R. 700, 709 (Bankr. N.D. Ill. 1987) ("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, [citation omitted]. Each type of service should be listed with the corresponding specific time allotment").
(8) Trustee Work Can Not Be Compensated As Professional Services
"The Trustee cannot effectively expand the maximum limits of Section 326(a) by hiring other people to perform his duties for him, whether they are paralegals, attorneys, accountants or other professional persons, and utilize the potentially unlimited scope of Section 330 as a basis for award of reasonable compensation." Boldt v. United States Trustee (In re Jenkins), 130 F.3d 1335, 1341 (9th Cir. 1997) (quoting In re Prairie Cent. Ry. Co., 87 B.R. 952, 959 (Bankr, N.D. Ill. 1988)).
(11) Overhead Costs are Non-Compensable
The Court denies reimbursement for fees or expenses that are overhead costs. Expenses which are overhead are not compensable because they are built into the hourly rate. See In re Wildman, 72 B.R. 700, 731 (Bankr. N.D. Ill. 1987). Overhead, for bankruptcy purposes, includes "all continuous administrative or general costs or expenses incident to the operation of the firm which cannot be attributed to a particular client or cost." In re Convent Guardian Corp., 103 B.R. 937, 939-40 (Bankr. N.D. Ill. 1989) (quoting In re Thacker, 48 B.R. 161, 164 (Bankr. N.D. Ill. 1985)).
(12) Clerical Work Not Compensable
The court disallows the compensation of clerical or stenographic employees of the professional for the performance of routine clerical or administrative activities in the normal course of the professional's business, such as photocopying, secretarial work, or routine filing. Such activities are not in the nature of professional services and must be absorbed by the applicant's firm as an overhead expense. In re Dimas, LLC, 357 B.R. 563, 577 (Bankr. N.D. Cal. 2006) (citing Missouri v. Jenkins, 491 U.S. 274, 288 n. 10 (1989)). See also In re Chellino, 209 B.R. 106, 114 (Bankr. CD. Ill. 1996) (Paralegal, but not "clerk" services entitled to compensation at an hourly rate; clerk activities are overhead of the professional); Souza v. Miguel, 32 F.3d 1370, 1375 (9th Cir. 1994) (Trustee not entitled to reimbursement or compensation of overhead expenses such as secretarial, stenographic, clerical, and routine messenger services). Dated: September 23, 2014
Eugene R. Wedoff
United States Bankruptcy Judge
Image materials not available for display.