In Re Yankee Seafood Corp.

53 B.R. 285 (1985)

In re YANKEE SEAFOOD CORPORATION, Bankrupt.

Bankruptcy No. 76-123.

United States Bankruptcy Court, D.Rhode Island.

September 13, 1985.

DECISION ON APPLICATIONS FOR ALLOWANCE

ARTHUR N. VOTOLATO, Jr., Bankruptcy Judge.

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 informal             4/16/76   Attend meeting of informal
Creditor's Committee at Galilee;                 Creditor's Committee at Galilee;
review petitions                                 review petitions
4/26/76   Review schedules; attend informal      4/26/76   Review schedules; attend informal
meeting of creditors;                            meeting of creditors;
attend first meeting of creditors                attend first meeting of creditors
at Bankruptcy Court;                             at Bankruptcy Court;
letter to Creditor's Committee;                 letter to Creditor's Committee;

prepare Election Sheet                           prepare Election Sheet
re Creditor's Committee                          re Creditor's Committee
5/3/76    Attend meeting of creditors;           5/3/76    Attend meeting of creditors;
letter to creditors and proof                    letter to creditors and proof
forms; letter to Marvin Brill;                   forms; letter to Marvin Brill;
talked with various creditors                    talked with various creditors
5/20/76   Attend Creditor's Committee            5/20/76   Attend Creditor's Committee
meeting; talked with Marvin                      meeting; talked with Marvin
Brill; review balance sheet                      Brill; review balance sheet
5/21/76   Talked with creditors re               5/21/76   Talked with creditors re
meeting of Creditor's Committee                  meeting of Creditor's Committee
5/25/76   Attend meeting of Creditor's           5/25/76   Attend meeting of Creditor's
Committee                                        Committee
5/26/76   Attend continued meeting of            5/26/76   Attend continued meeting of
Creditor's Committee; conference                 Creditor's Committee; conference
with secured creditors                           with secured creditors
5/27/76   Talked with Bradford                   5/27/76   Conference with Marvin Brill,
Gorham, Mr. Allen and Lloyd                      Esquire and Lloyd Rustigian
Rustigan; talked with Marvin                     re: Clamex
Brill re Clamex
5/28/76   Talked with Marvin Brill;              5/28/76   Talked with Marvin Brill;
talked with members of                           talked with members of
Creditor's committee                             Creditor's committee
6/1/76    Conference with counsel; attend        6/1/76    Conference with counsel; attend
adjourned first meeting                          adjourned first meeting
of Creditor's Committee                          of Creditor's Committee
6/15/76   Talked with Marvin Brill re           6/15/76    Talked with Marvin Brill re
Order; talked with Anthony                       Order; talked with Anthony
Vacca                                            Vacca
6/24/76   Talked with Narragansett              6/24/76    Talked with Narragansett
Electric and Marvin Brill; attend                Electric and Marvin Brill; attend
Creditor's Committee                             Creditor's Committee
meeting; talked with Bankruptcy                  meeting; talked with Bankruptcy
Court; talked with                               Court; talked with
Brian Grimes                                     Brian Grimes
6/25/76   Talked with Bankruptcy                6/25/76    Talked with Bankruptcy
Court; talked with Tom Rosenfield                Court; talked with Norman
and Marvin Brill;                                Orodenker and Marvin Brill;
letter to all members of                         letter to all members of
Creditor's Committee                             Creditor's Committee
7/6/76    Talked with Al Factor re               7/6/76    Talked with Al Factor re
stockholders                                     stockholders
7/8/76    Attend meeting of Creditor's           7/8/76    Attend meeting of Creditor's
Committee; talked with Mr.                       Committee; talked with Mr.
Grimes, Mr. Gershkoff and                        Grimes, Mr. Gershkoff and
Mr. Wheelock                                     Mr. Wheelock
7/20/76   Talked with Marvin Brill               7/20/76   Talked with Marvin Brill
7/22/76   Attend meeting of Creditor's           7/22/76   Attend meeting of Creditor's
Committee; attend court                          Committee; attend court
hearing; conference with                         hearing; conference with
Marvin Brill; talked with                        Marvin Brill; talked with
Narragansett Electric and                        Narragansett Electric and
Marvin Brill                                     Marvin Brill
7/28/76   Talked with Lloyd Rustigian            7/28/76   Talked with Lloyd Rustigian
8/10/76   Attend meeting of Creditor's           8/10/76   Attend meeting of Creditor's
Committee at Bankruptcy                          Committee at Bankruptcy
Court                                            Court

8/16/76   Talked with Mr. Legare; conference     8/16/76   Talked with Mr. Legare; conference
with Mr. Legare                                  with Mr. Legare
8/17/76   Talked with Mr. Legare and             8/17/76   Talked with Mr. Legare
Marvin Brill
8/19/76   Talked with Mr. Legare; conference    8/19/76    Talked with Mr. Legare; conference
with Bankruptcy                                  with Bankruptcy
Judge; attend hearing                            Judge; attend hearing
8/26/76   Sent copy of Greenwich Report         8/26/76    Review Greenwich Report;
to all members of Creditor's                     talked with Marvin Brill and
Committee; review same;                          Narragansett Electric; conference
talked with Marvin Brill and                     with Mr. Legare and
Narragansett Electric; conference                Mr. Wehr; conference with
with Mr. Legare and                              Judge; review Clamex Order;
Mr. Wehr; conference with                        attend continued first meeting
Judge; revise Clamex Order;
attend continued first meeting
9/9/76    Attend court hearing and               9/9/76    Attend court hearing and
conferences                                      conferences
9/17/76   Talked with Marvin Brill and           9/17/76   Talked with Marvin Brill and
Mr. Wehr                                         Mr. Wehr
9/23/76   Talked with Tom Rosenfield             9/23/76   Talked with Norm Orodenker
9/27/76   Letter and Decree re Hobart            9/27/76   Letter and Decree re Hobart
from Marvin Brill                                from Marvin Brill
9/29/76   Talked with Tom Rosenfield             9/29/76   Talked with Norman
Orodenker
10/1/76   Talked with Tom Rosenfield             10/1/76   Talked with Norman
and creditors; letter to all                     Orodenker and creditors; letter
members of Creditor's Committee                  to all members of Creditor's
Committee
10/7/76   Attend meeting of Creditor's           10/7/76   Attend meeting of Creditor's
Committee; talked with Marvin                    Committee; talked with Marvin
Brill                                            Brill
10/15/76  Talked with Mr. Legare;                10/15/76  Talked with Mr. Legare;
talked with bank representative;                 talked with bank representative;
attend meeting with                              attend meeting with
purchasers and Mr. Legare                        purchasers 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.