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M.D.N.C.: Carolina Farm Credit v. Shore- Finality of Order Regarding Attorneys’ Fees

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By Ed Boltz, 21 July, 2019

Summary:

Carolina Farm Credit filed secured claims in the Shore’s Chapter 12 case, including attorney’s fees calculated at 15% of the outstanding balance. The Shores objected that such amounts were “not proper” under 11 U.S.C. § 506 and that N.C.G.S. § 6-21.2(2) did not preclude the bankruptcy court to review whether such amount was reasonable. Recognizing the split of authority the bankruptcy court declined to approve a flat 15% fee without reviewing a documented Application for Attorneys Fees, providing Carolina Farm Credit 14 days to file such.

Rather than disclose the actual billing records, Carolina Farm Credit instead appealed. The District Cour, however, first reviewed whether this was a final order, looking at the following criteria:

(1) The impact of the matter on the assets of the bankruptcy estate;
(2) The preclusive effect of a decision on the merits;
(3) Whether the interests of judicial economy will be furthered; and
(4) Whether the order finally determines or seriously affects a party’s substantive rights; or
(5) Whether the order will cause irreparable harm to the losing party or waste judicial resources if the appeal is deferred until the conclusion of the bankruptcy case.

Based on these factors, the district court held that this was not a final order and remanded to the bankruptcy court for the review of Carolina Farm Credit’s Fee Application.

Commentary:

Subsequent to the orginal bankruptcy order, Mr. Shore has died. It appears that, with the refusal by the district court to hear the appeal, has may have lead to a re-opening of negotiations in this case.

For a copy of the opinion, please see:

Carolina-Farm-Credit-v.-Shore-Finality-of-Order-Regarding-Attorneys’-Fees-1Download

For a copy of the original bankruptcy court opinion, please see:

Carolina-Farm-Credit-v.-ShoreDownload

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