Hayward & Assoc v. Comerica Bank

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

No. 19-10514

BAILEY TOOL & MANUFACTURING COMPANY,

Debtor

HAYWARD & ASSOCIATES P.L.L.C.,

Appellant

v.

COMERICA BANK,

Appellee

-------------------------------------------------
HUNT HINGES, INCORPORATED

Debtor

HAYWARD & ASSOCIATES P.L.L.C.,

Appellant

v.

COMERICA BANK,

Appellee
-------------------------------------------------
CARAFELLI METALS, INCORPORATED,

Debtor

United States Court of Appeals
Fif th Circuit
FILED
February 27, 2020

Lyle W. Cayce
Clerk
Case: 19-10514 Document: 00515324386 Page: 1 Date Filed: 02/27/2020

No. 19-10514
2
HAYWARD & ASSOCIATES P.L.L.C.,

Appellant

v.

COMERICA BANK,

Appellee
------------------------------------------------
BAILEY SHELTER, L.P.,

Debtor

HAYWARD & ASSOCIATES P.L.L.C.,

Appellant

v.

COMERICA BANK,

Appellee

Appeal from the United States District Court
for the Northern District of Texas
USDC No. 3:17-CV-2857
USDC No. 3:17-CV-2870
USDC No. 3:17-CV-2872
USDC No. 3:17-CV-2873

Before KING, COSTA, and HO, Circuit Judges.
PER CURIAM:*

*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5
TH
CIR. R. 47.5.4.
Case: 19-10514 Document: 00515324386 Page: 2 Date Filed: 02/27/2020

Hayward & Associates, P.L.L.C. (“H&A”) provided bankruptcy-related
legal services to four interrelated entities—Bailey Tool & Manufacturing Co.,
Hunt Hinges, Inc., Cafarelli Metals, Inc., and Bailey Shelter, L.P. Throughout
the jointly administered proceedings, H&A worked to advance all four
bankruptcies. H&A also performed additional bankruptcy-related work,
including securing debtor-in-possession financing and initiating adversary
proceedings, for the three operating debtors—Bailey Tool, Hunt Hinges, and
Cafarelli Metals. Bailey Shelter was not party to either the financing
transactions or the adversary proceedings.
After nearly a year of joint administration under chapter 11, the
bankruptcy court converted all four bankruptcy proceedings to chapter 7,
dissolved joint administration, and appointed a chapter 7 trustee. At the
chapter 7 trustee’s request, the bankruptcy court imposed a deadline for
parties-in-interest to file chapter 11 administrative-expense claims. H&A
timely filed a fee application in each of the four bankruptcy proceedings.
Comerica Bank—the primary creditor of the operating debtors and the holder
of an unsecured guaranty from Bailey Shelter—filed a limited objection to the
fee application. After an evidentiary hearing, the bankruptcy court awarded
H&A $346, 042.50 in fees and $24,594.22 in expenses. The award reflected all
of H&A’s requested fees and expenses except for $6,712.50 in fees incurred
preparing the fee application after the bankruptcy proceedings were converted
to chapter 7. Additionally, the bankruptcy court found Bailey Shelter not
responsible for bankruptcy services not performed for it. Thus, the court held
Bailey Shelter liable for only $41,529.99, or approximately 12%, of the awarded
fees and $6,148.55, or approximately 25%, of the awarded expenses. The three
operating debtors were held equally liable for the remainder of the fees and
expenses. The district court affirmed the award.
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No. 19-10514
4
H&A contends that the bankruptcy court erred in three respects: (1) the
court did not hold the debtors jointly and severally liable for H&A’s fees and
expenses; (2) the court determined certain portions of H&A’s legal services
were not “likely to benefit” Bailey Shelter; and (3) the court did not award H&A
fees for preparing the fee application after the chapter 11 bankruptcy
proceedings were converted to chapter 7 proceedings.
We have reviewed the briefs, the applicable law, and relevant parts of
the record, and we have heard oral argument. Neither the district court nor
the bankruptcy court committed reversible error. The judgment is affirmed,
essentially on the basis explained by the bankruptcy court in its August 30,
2017 Order.
Case: 19-10514 Document: 00515324386 Page: 4 Date Filed: 02/27/2020