Tag: attorneys’ fees

E.D.N.C.: Summitbridge v. Faison- No Unsecured Claim for Attorneys Fees for Under Secured Creditor

Summary:

In a Chapter 11 case, Summitbridge held a secured (but under secured) claim, which was satisfied, pursuant to the confirmation order, by tender of the collateral. Summitbridge then filed an additional unsecured, nonpriority claim for it attorneys fees, pursuant to its promissory note, in the amount of 15% of the outstanding indebtness, totaling more than $300,000. The bankruptcy court disallowed this unsecured claim.

In affirming, the district court recognized the line of cases that “reasoned that claims for post-petition attorneys’ fees are contingent, unliquidated claims which are not precluded by Section 502 and are thus allowable. See In re 804 Congress, L.L.C. Read More

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Bankr. E.D.N.C.: In re Bate Land & Timber, L.L.C.- Equitable Reduction in Attorney’s Fees

Summary:

In a long-running case, of which this is the fourth opinion from the court, the Debtor and Bankruptcy administrator objected to the attorney’s fees sought by Bate Land Company (“BLC”). The Court held that BLC was an over secured creditor under 11 U.S.C. § 506(b).

The Debtor, however, first contended that the Note provided for attorney’s fees to BLC only in the event of a default and that, since the bankruptcy was filed during the 10-day grace period after the initial missed payment, there had been not default. The Court, however, held that the contract “specifically refers to the failure to make a payment as a default, and does not condition recovery of attorneys’ fees on the expiration of the cure period or a declaration of default.… Read More

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Bankr. M.D.N.C.: In re Lucero- Payment of Administrative Expenses Following Conversion from Chapter 13 to Chapter 7

Summary:

The Court held that Harris v. Viegelahn, 575 U.S. ___, 135 S. Ct. 1829, 191 L.E. 2d 783 (2015) did not prevent a Chapter 13 trustee from paying administrative expenses funds held by the following conversion of the case to Chapter 7 pursuant to 11 U.S.C. § 1326(a)(2) and Bankruptcy Rule of Federal Procedure Rule 1019.

Commentary:

Attached to the application for fees was an affidavit from the debtor stating that she understood that the funds on hand could be returned to her but that she nonetheless wanted those funds sent to the her attorney. This makes it unclear whether the debtor’s attorney could compel the chapter 13 trustee to release funds to her in the face of an objection from the debtor.… Read More

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Bankr. W.D.N.C.: In re Pace – Disallowance of Lien against Personal Property Securing Attorney’s Fees

Summary:

In order to provide for attorney’s fees and allow for filing of a Chapter 7, Mr. Pace’s attorney took a voluntary lien against Mr. Pace’s motorcycle and boat for pre- and post-petition services.

The court reviewed this arrangement, finding that taking a lien for pre-petition services is not expressly prohibited, but strongly discouraged by the Bankruptcy Code and subject to “heightened scrutiny of the propriety of this type of fee agreement.” Under North Carolina Rule of Professional Conduct 1.8, a lien is permitted if the following safeguards are provided:

(1) the transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing in a manner that can be reasonably understood by the client;
(2) the client is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel on the transaction; and
(3) the client gives informed consent, in a writing signed by the client, to the essential terms of the transaction and the lawyer’s role in the transaction, including whether the lawyer is representing the client in the transaction.… Read More

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Bankr. M.D.N.C.: In re Styers- Motion to Dismiss as Alternative to Motion for Relief from Stay

Summary:

Chapter 13 Debtors had fallen behind on payment under their confirmed plan, wherein the mortgage held be Wells Fargo was paid directly by the Debtors. Instead of following the more customary path of seeking relief from the automatic stay, Wells Fargo instead sought dismissal of the Chapter 13 case. The Motion to Dismiss was resolved by bringing the payments “inside” the Chapter 13 plan, but the parties could not agree on the allowance of attorney’s fees in the amount of $350.00. Further, the Bankruptcy Administrator argued that Wells Fargo should instead have filed a Motion for Relief, with its required filing fee of $176.00.… Read More

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4th Circuit: Randle v. H & P Capital- Attorney’s Fees for FDCPA Claim

Summary:

Randle brought a complaint against the Defendants for violations of the FDCPA and sought certification of her case as class action. Prior to any class certification, the Defendants settled, agreeing to pay $6,000 “in full final settlement of all her claims,” plus attorney’s fees related to her individual claims. Counsel then submitted requests for $89,083.69, which was reduced by the district court to $76,876.59. The Defendants appealled, arguing that the district court abused its discretion because the attorney’s fees awarded failed to consider the lack of success in obtaining a class claim.

The Court of Appeal rejected this argument, recognizing that while a nominal damages award bears on the propriety of fees awarded, See Farrar v.… Read More

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Law Review: Budge- United States Consumer Law Attorney Fee Survey Report 2010-2011, Top 10 Cities, 2nd Edition

Summary:

This report publishes the survey results of the United States Consumer Law Attorney Fee Survey Report 2010-2011 for the ten largest U.S. cities as of the 2010 census, which are (in order): New York, NY, Los Angeles, CA , Chicago, IL, Houston, TX, Philadelphia, PA, Phoenix, AZ , San Antonio, TX, San Diego, CA, Dallas, TX, and San Jose, CA.

For a copy of the opinion, please see:

TOP TEN Cities Edition US Consumer Law Attorney Fee Survey 2010-11.pdf Read More

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Bankr. E.D.N.C.: In re Garner- Security Interest in Property taken by Attorney for Debtor

Summary:

The Debtors paid their attorney $10,000 prior to filing Chapter 11 for pre-petition services, with nothing owed to the attorneys at the time of filing. In order to secure fees for services rendered during the pendency of the case, the Debtors granted their attorneys two future advance deeds of trust on tracts of land owned by the Debtors. The Bankruptcy Administrator objected to the application to employ the attorneys, asserting that the attorneys were not disinterested persons as defined in § 101(14) and as required by § 327(a). The bankruptcy court agreed that the attorneys were not disinterested and further found that the proposed fee arrangement rearranges the priorities set forth in § 507 and § 726(b), and effectively ensures that the attorneys would be paid over any other administrative creditor in the event that a trustee is appointed, the case converts to a Chapter 7, or the case becomes administratively insolvent.… Read More

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Economics Review: Lusardi, Schneider & Tufano- Financially Fragile Households: Evidence and Implications

Abstract:

This paper examines households’ financial fragility by looking at their capacity to come up with $2,000 in 30 days. Using data from the 2009 TNS Global Economic Crisis survey, we document widespread financial weakness in the United States: Approximately one quarter of Americans report that they would certainly not be able to come up with such funds, and an additional 19% would do so by relying at least in part on pawning or selling possessions or taking payday loans. If we consider the respondents who report being certain or probably not able to cope with an ordinary financial shock of this size, we find that nearly half of Americans are financially fragile.… Read More

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N.C. Court of Appeals: Dodeka, L.L.C. v. Cobb- Standard for Attorneys’ Fees in Consumer Rights Action

Summary:

Plaintiff brought a complaint against Defendant for monies allegedly owed on a credit card.  Defendant answered and raised counterclaims, to which Plaintiff failed to reply.  Consequently,  default was entered on the counterclaims with $4,500.00 in actual damages, plus $17,912.11 in costs, including attorneys’ fees.  Defendant appealed, questioning, among other things, the reasonableness of the attorney’s fees.

The Court of Appeal  held that the standard for reviewing an award of attorneys’ fees was that “the record must contain findings of fact as to the time and labor expended, the skill required, the customary fee for like work, and the experience or ability of the attorney based on competent evidence.”  West v.  Read More

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