IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF KANSAS
ALBERT L. GILLILAND, EILENE M. GILLILAND,
ORDER ON ATTORNEY FEES
This matter is before the Court on the final application for fees and expenses for William L. Needler & Associates, Ltd., former counsel for the former debtors-in-possession. The debtor, the Farm Credit Bank of Wichita, and the United States Trustee have all filed objections. The Court has reviewed the total time spent on the case from April 6, 1992, to April 3, 1993, and in accordance with its previous decision in In re Smith, No. 83-40427 (Dec. 10, 1984), motion to modify and amend denied, Jan. 30, 1985, finds as follows.
The applicant has requested fees in the amount of $12,845.00. The Court has considered the objections and Mr. Needler's response. With these arguments in mind, the Court reviewed the application and makes the following findings.
Approximately 16.5 hours were billed for preparing amended disclosure statements and plans, and asking for extensions of time to file them. A review of the documents ultimately filed discloses that the amendments retained substantial portions of the original plan and disclosure statement. The primary changes were: (1) to alter the stated amounts of the Farm Credit Bank's secured and unsecured claims; (2) to add a description of the security held by various creditors; (3) to include an exhibit identifying sales the debtors had relied on to estimate values for purposes of their plan; (4) to change the treatment of unsecured creditors by giving them any profits the debtors might make during the first seven years of the plan; and (5) to include in the disclosure statement a one-page narrative containing certain postpetition information. The Court believes these limited changes do not justify nearly all the time billed and will disallow 12 of these hours as neither reasonable nor necessary.
In addition, certain entries are inadequately documented, including those for 5/8/92, 6/25/92, 7/20/92, 7/22/92, 7/28/92, 9/6/92, 9/23/92, and 2/1/93. The 5/8/92 entry contains a description for a repetitive task that is not allowable and lumps it with another task so that the time spent on each task cannot be determined. The 6/25/92 entry concerns preparation of an unidentified motion and order. The remaining 1992 entries bill for telephone calls without indicating their purpose or subject. The 2/1/93 entry also lists phone calls with no disclosed purpose and lumps them with other tasks so the time spent on each cannot be determined. The Court will disallow a total of 4.7 hours for these entries. Other entries also lump questionable descriptions with permissible ones in one compound entry, but the Court has relied on other information in related entries to infer the missing information.
Finally, the Court has considered the quality of the work Mr. Needler performed in this case. Clearly, his services provided little benefit to the either the debtors or the creditors. The debtors ultimately hired new counsel who felt compelled to withdraw the reorganization plan Mr. Needler had filed. The debtors had to incur additional expense with their new counsel, some of which duplicates Mr. Needler's charges. The debtors have now voluntarily converted the case to a chapter 7 liquidation. Despite the low quality of his work here, Mr. Needler asks to be paid at an hourly rate of $175, which is in the upper end of the range of rates allowed by this Court for this time period. The Court finds that Mr. Needler's time in this case should be compensated at the rate of $100 per hour, a rate in the lower middle of the range this Court allows and more in keeping with the quality of his work for the debtors.
For these reasons, the Court has reduced the 61.15 hours of work time by 16.7 hours, and multiplied the result by $100 to arrive at $4,445.00 as the proper award for Mr. Needler's work time. The Court will allow all his hours of travel time but only at the rate of $50 per hour, for a total of $1,225.00 for that time. The total fees allowed are therefore $5,670.00.
Reimbursement of expenses in the amount of $2,524.15 was also requested. The Court finds the following deductions to be made from this figure. The Court considers ordinary photocopy and postage charges to be a part of counsel's office overhead, and has disallowed them except for mass mailings required by the Bankruptcy Code and Rules. All facsimile and "UPS" (presumably United Parcel Service) charges have been disallowed because counsel offered no explanation of the need for them. Total reimbursable expenses allowed are $1,388.00.
The total sum awarded is therefore $7,058.00. Since Mr. Needler has received a retainer of $7,100.00 from the debtors and their son, he has received $42.00 more than this award. This amount is so small that the Court will not now order him to disgorge it. However, the fees and expenses awarded are allowed as an administrative expense of the chapter 11 phase of this case and Mr. Needler is only entitled to be paid pro rata with other expenses of equal priority. Should the estate prove unable to pay such expenses in full, Mr. Needler may be required to disgorge amounts paid by the debtors to reduce his recovery to reflect the status of this award.
IT IS SO ORDERED.
Dated at Topeka, Kansas, this _____ day of March, 1994.
JAMES A. PUSATERI
CHIEF BANKRUPTCY JUDGE