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New Cases For the Week of November 1, 2004 -
November 5, 2004
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November 5, 2004 |
Case |
Court |
Holding |
In re Hansen
(DBN Subscription Required) |
Bankr. N.D. Ill. |
A debtor has an absolute right to convert from Chapter 7 to Chapter 13 so long as the debtor is eligible to be a debtor in Chapter 13. A debtor's schedules are presumptive evidence of the debtor's liabilities on the petition date. If the schedules show that the debtor is ineligible for Chapter 13 on the petition date, postpetition reductions in the amounts of the debtor's liabilities can not make the debtor eligible for Chapter 13, since eligibility is measured from the petition date. |
In re Worldwide Direct, Inc.
(DBN Subscription Required) |
Bankr. De. |
There is no such thing as "generally accepted legal auditing principles" in connection with review of a fee application. Where a fee auditor refuses to reveal the allegedly proprietary methods utilized in conducting a fee audit, his report cannot be admitted as an expert report because there is no ability to review the propriety of the methodology. Where "lumped" time relates to only one category of work, it is not necessarily objectionable. Merely labeling services as "clerical" is not dispositive. An inquiry must be conducted into whether such services are billed to non-bankruptcy clients. Time will not be disallowed for legal research. "It is inconceivable that counsel would be expected to represent its client without performing research on legal issues." Because the use of temporary contract professionals to staff complex projects has become pervasive in the legal industry, a law firm employed by the estate can contract with such professionals (who are not employees of the law firm) without engaging in unauthorized fee splitting so long as the contract professionals operate under the close and direct supervision of firm employees. Moreover, additional disclosure of the use of such contract professionals is not required. However, the estate law firm cannot charge more to the estate for the use of such contract professionals that the cost of paying the professionals plus any demonstrable additional overhead incurred by the firm. |
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November 3, 2004 |
Case |
Court |
Holding |
In re Focus Media Inc.
(DBN Subscription Required) |
9th Cir. |
In an adversary proceeding, a lawyer can be deemed to be a client's implied agent to receive service of process when the lawyer repeatedly represented that client in the underlying bankruptcy case, and where the totality of the circumstances demonstrates the intent of the client to convey such authority.
Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc., 527 U.S. 308 (1999), does not bar the issuance of a preliminary injunction freezing assets where fraudulent conveyance or equitable causes of action are pleaded in the bankruptcy context |
In re Hixon
(DBN Subscription Required) |
8th CIr. |
Breach of fiduciary duty and constructive trust are affirmative defenses. |
In re Liberate Technologies
(DBN Subscription Required) |
Bankr. N.D. Ca. |
Although a debtor’s business is
unsuccessful, dismissal of the debtor's voluntary Ch. 11 case is appropriate, where the debtor has cash
well in excess of its liabilities and does not need bankruptcy
protection to avoid wasteful liquidation of its business assets. |
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November 1 , 2004 |
Case |
Court |
Holding |
In re Hercules Enterprises
(DBN Subscription Required) |
9th Cir. |
Bankruptcy court may not adjudicate subsequent dischargeability of sanction imposed on non-party participant in bankruptcy proceeding. |
In re Hajje
(DBN Subscription Required) |
Bankr. N.D. Tex. |
Rule 11 sanctions were warranted against a debtor's attorney who filed a motion to recuse a Ch. 7 trustee (based upon alleged racial/ethnic prejudice) without conducting a reasonable investigation onto the facts asserted in the motion to recuse. |
In re Fibermark, Inc.
(DBN Subscription Required) |
Bankr. Vt. |
Where a professional fee applicant affirms that it bills its nonbankruptcy clients for reasonable CALR usage charges, such charges are reimbursable in bankruptcy cases. Travel charges are allowed at 1/2 of the timekeeper's normal hourly rate. Paraprofessional time devoted to administrative activities such as mailing or delivering
papers, photocopying, word processing, and organizing files constitutes overhead expenses not compensable form the estate. "After hours support" is overhead time not compensable form the estate. |
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