W.H.E. Enterprises, LLC

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re
W.H.E. ENTERPRISES, LLC, 	No. 10-10566
Debtor(s).
______________________________________/
Memorandum on Application for Compensation
_________________
The U.S. Trustee’s moved to dismiss this Chapter 11 case on grounds that the debtor had been
using cash collateral without permission, had failed to file operating reports, and was not in a position
to confirm a plan within the time limits set by the court. 	The debtor’s attorney, Gregory Orton,
appeared by telephone. At the conclusion of the hearing the debtor’s responsible individual, Jonothan
Benefield, complained to the court about the quality of Orton’s services. The court accordingly
granted the motion to dismiss but reserved jurisdiction to review Orton’s fees pursuant to § 329(b) of
the Bankruptcy Code and ordered him to file a fee statement. 	The propriety of his fees is now before
the court.
Orton received $7,500.00 before filing. His fee disclosure statement says that he would be paid
“per agreement.” There is no written fee agreement. Benefield and his wife are adamant that Orton
told him his entire fee would be $7,500.00. Orton’s application is for a total of $14,490.00, leaving a
balance of $6,990.00.
Benefield’s testimony as to Orton’s conduct was a litany of mistakes, unexplained rights and
Entered on Docket
July 20, 2010
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 10-10566 Doc# 61 Filed: 07/20/10 Entered: 07/20/10 14:07:55 Page 1 of 4

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1A cursory review of Orton’s cases filed in this district since 1999 reveals that he has filed only
three other Chapter 11 cases: one dismissed on motion of the U.S. Trustee, one converted to Chapter 7
due to failure to comply with an order of the court, and one converted to Chapter 7 due to failure to file
a plan. The court has no recollection of Orton ever obtaining confirmation of a Chapter 11 plan. The
only true test of Chapter 11 competence is the number of contested plan confirmations an attorney has
achieved. It appears that for Orton the number is zero.
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procedures, short notices, unreturned emails and phone calls, and a more or less complete lack of
guidance through the complexities of Chapter 11. These charges are consistent with conduct the court
has observed from Orton in other cases.
Benefield candidly admits that he chose Orton to represent the debtor because Orton was
cheaper than the other attorneys he consulted. It appears that Benefield now understands that in
Chapter 11 cases, like everything else in life, “bargains” rarely result in true savings. Instead of
retaining a competent, diligent attorney with the skills necessary to have a decent chance of
reorganizing, Benefield hired a marginal practitioner with no true expertise in Chapter 11 matters.1
Fixing an appropriate fee in this case is difficult despite Orton’s feckless representation of the
debtor. Some benefit was obtained by the filing in the form of temporary relief from creditor activity.
It may also be that the declining real estate market made reorganization impossible, as Orton alleges.
The court also notes that individual entries are reasonable and the billings and time entries are
generally in accordance with court guidelines. On the other hand, Orton spent at least three hours
putting out a fire he created when he filed the petition without identifying all names used by the
debtor.
The court finds that Orton has not met his burden of showing a contractual right to a fee in
excess of $7,500.00 and that the total value of his fees is less than that amount in any event. The court
finds that $900.00 of the fees were for correcting a mistake Orton made in identifying the debtor in the
petition. The court will therefore allow total compensation to Orton of $6,600.00 and order him to
Case: 10-10566 Doc# 61 Filed: 07/20/10 Entered: 07/20/10 14:07:55 Page 2 of 4

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2To clarify, the court finds that Orton is entitled to a total fee of $6,600.00. 	Since he received a
prepetition retainer of $7,500.00, he must return $900.00.
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return the sum of $900.00 to the debtor forthwith. 2
An appropriate order will be entered.
Dated: July 20, 2010
SAlan Jaroslovsky
U.S. Bankruptcy Judge
Case: 10-10566 Doc# 61 Filed: 07/20/10 Entered: 07/20/10 14:07:55 Page 3 of 4

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CERTIFICATE OF MAILING
I, the undersigned, a regularly appointed deputy clerk of the United States Bankruptcy Court for the
Northern District of California, at Santa Rosa, hereby certify:
That I, in the performance of my duties as such clerk, served a copy of the foregoing document by
depositing it in the regular United States mail at Santa Rosa, California on the date shown below, in a
sealed envelope bearing the lawful frank of the Bankruptcy Judge, addressed as listed below.
Dated: July 20, 2010 	By : 	Katie Andersen
Katie Andersen
Deputy Clerk
Jonothan Benefield
3 Lerner Dr.
Calistoga, CA 94515
Case: 10-10566 Doc# 61 Filed: 07/20/10 Entered: 07/20/10 14:07:55 Page 4 of 4