Trustee/attorney Fee Question

[Sevastianos]

The bk. judge 'stayed' all pending & future litigation in this Chap. 7 because I had filed a Notice of Appeal(Interlocatory) which the trustee, her atty., NOR the judge even knew existed - so when the judge found it a legitimate move he stayed all pending and future litigation in this matter.  My question is two-fold: 1. If the trustee nor her attorney have filed an Application for compensation can they now do so 0R has their opportunity been lost due to the 'STAY'?

2.  Since the case will now go to district court and then possibly US court of appeals if district court rules against me, then AFTER the court of appeals finalizes their review, whatever they determine is what is going to happen unless it is appealed to the Supreme Court, THEN, after the Crt. of Appeal,  the bankruptcy court jurisdiction has now ended and there is no way that bk judge can be involved any more on any cause, etc?  In other words the bk. judge stopped litigating the case, the case goes to dist. crt., etc. so now the bk. court is over and done with forever?  

If I'm not making myself clear let me know and I'll try to do a better job.  Thanks for your help!!!

ANSWER: Several issues.  First interlocutory appeals are by "permission" of the appellate court so if you haven't already, you need to file a motion to allow the interloc. appeal --short plain quick statement why it's interlocutory(because the decision to award fees has yet to be made and it shouldnt' be made for the reasons stated in the appeal)  and you are required to serve the notice of appeal and that motion on the trustee & the atty-- since they claim not to know about it you probably didn't serve it??  If you did no worries(certificate of service needs to show date and document served by mail, to whom & address, mailer(not you) signs it and that needs to be filed with the court too.

Next, 14 days after the appeal notice is filed you need to designate:  issues on appeal and record from the bk court on appeal(i.e. the docket numbers of the items you want the appellate court to look at)

Is there a reason why you didn't appeal to the bankruptcy appellate panel?  I believe you have one back there -- actually if you don't "opt out" from the bap by means of a separate document filed opting out, you get the bap by default -- which would be my first choice.

After this first appeal, next up is the court of appeals;  after that, the supremes can be requested to grant review but probably won't as it's not sexy enough of an issue for them;

so the court of appeals would be the end of the line.

Let's make sure your procedure is properly deployed.  Also, all of these items, motion for interloc appeal,record designation, although addressed to the appellate forum, are filed with the bk court.

You might want to inquire of the bk court clerk about whether appeals automatically go to the bap;  also look at thelocal rules of practice for the bk court for help on that point.

Good luck!

Lee

PS: Yes everything is "on hold" until the appeal is decided.

---------- FOLLOW-UP ----------

Mr. H, that was FAST. Thanks!!

All of the first part of your answer have been done - the N. of Appeal was filed on 9/2/11, all parties notified, etc. and so forth. All records  have been transferred to dist.crt since Dec. 2011.  The appeal has been accepted and approved by dist. crt. since September 2011. I'm getting my docs ready for my first brief, etc.  All your suggested procedures were followed exactly and my appeal was allowed by the district court since Sept.2011.

My query is: can these attorneys come in NOW after all of this has been done and file an App. for Comp?  Or, are they too late and they can go fly a kite!  It was my understanding they've blown their chances for compensation because 'they didn't take care of business" and in order to be paid anything, trustee fees and/or atty fees they would have had to file their App. for Comp and have it approved by the court. So they will probably try to sue me in state court, however, I did not hire the attorney, the trustee did! I did file an objection to the hiring, etc.    So,if I understand you correctly, they cannot now file an App. for Comp. and its' too late to ever file one, AND, the bankruptcy judge is out of the picture completely even after the dist. crt and the us crt of appeals is finished?  I hope so, it's pretty sad when you know more than the judge or the offending attorneys - they did not even know that an interlocutory appeal existed. When I told the court about the appeal in a hearing in Dec.(he hadn't read the docket) he asked the atty. to 'investigate' and then said to me "you may be right, I don't know'.  I have it on CD. The atty. said he would file a Mo. to Dis. my appeal but was blowing smoke.  

I did file a Motion for Sanctions against these two(trust. & her atty)  and I have found the dist crt or a US crt of appeals can enforce those sanctions, find them guilty, and these two can suffer up to $25,000 EACH if found guilty of my charges.  They've done it the old fashioned way - they've earned it!

[Avichai]

Your appeal resulted in an ouster of jurisdiction at the bankruptcy court level except as to matters necessary to perfect the appeal(i.e. grant more time to file a n/o/a, designation; that sort of thing);  no, they can't sneak in while your appeal is pending and file fee apps as the court has no jurisdiction.  Trustees are compensated based on how much they return to creditors;  if they don't collect any assets they don't get paid anything other than $65 standard no-asset-case fee.  Their attorneys typically come on board on a contingency basis -- you can look at the employment application and see what they proposed to do there;  normally courts don't set an hourly rate allowed in an employment application.  Instead out here anyway the apply a "lodestar" test meaning what are comparably experienced attorneys charging in the area per hour;  are the hours expended necessarily expended;  and hours x lodestar rate is the way fees are then calculated;  not necessarily awarded but starting point.

What, if anything, did this attorney do that benefitted the estate?  Recover assets might be one thing;  but harassing you doesn't count for anything.

Was the attorney doing something the trustee should have done without an attorney?

A good resource would be the trustee's handbook put out by the US Trustee's office and they have a "reading room" on line -- the executive office of the UST does;  fascinating what their guidelines are for trustees and it's all right there for all to see.

I think there's something in there about what the trustee is expected to do compared to when an atty is required to be hired.  Remember trustees can appear in court pro se like you're doing and don't need to hire attys for every little thing.

Probably not much help but look at that UST resource;  you can also drop a note to your local Assistant UST about the apparent abuse of the system by this trustee's attorney and get them up to speed.

We're seeing a lot of trustees out here hiring themselves as their own attorneys and double dipping the fees in small asset cases(under $5,000) and one of my colleagues is going to appeal the next fee app like this if it's granted to stop the abuse.

Good luck!  Sounds like you've got em on the run!

Lee