Riddick L. Bowe, 1st

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF MARYLAND
at Greenbelt
IN RE: 	:
:
RIDDICK L. BOWE, 1st 	: 	Case No. 05-41735PM
: 	Chapter 7
Debtor 	:
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - :
MEMORANDUM OF DECISION
Before the court in the Second Application of Whitford, Taylor & Preston L.L.P.
(“WT&P” and “Applicant”), for Allowance of Interim Compensation for Services Rendered and
Reimbursement for Expenses Incurred for the Period January 1, 2006 Through April 30, 2006
(the “Application”). The Application seeks interim compensation of $251,092.00 for the four-
month period and reimbursement of out-of-pocket expenses of $11,964.51. The Application is
opposed by the office of the United States Trustee and by two creditors, Judy Hart, a/k/a Judy
Bowe, and Commerce Funding Corporation (“CFC”). The matter was heard by the court at
length on March 15, 2007.
This bankruptcy case was filed under Chapter 11 on October 15, 2005, on the eve of the
enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
(“BAPCPA”). The new law, that is not applicable to this case, makes an individual’s filing of a
bankruptcy case under Chapter 11 far more difficult. This case was converted to a case under
Chapter 7 on February 2, 2007. The Debtor filed a “Schedule of Unpaid Chapter 11 Debts” upon
conversion as required by Fed. Rule of Bankruptcy Proc. 1019(5). This schedule showed an
estimated bill of $746,295.40 owed to WT&P, $128,677.44 owed to PENTA Advisory Services,
Date signed March 20, 2007
Entered: March 21, 2007 Case 05-41735 Doc 329 Filed 03/21/07 Page 1 of 5

LLC, an accountant and financial advisor, and $2,657.85 owed to Atlantic Auctions, Inc., for
storage and appraisal fees. After carefully considering the Application, the opposition, and the
record herein, as well as the possibility of an administrative insolvency in this case as the
administrative costs of this estate may exceed the amount collected by the Chapter 7 trustee, the
court defers ruling on this interim application and await a final application for all services
rendered by WT&P during this bankruptcy case since its filing October 15, 2005, under Chapter
11 through the date of conversion to a case under Chapter 7 on February 2, 2007. The court
believes that a meaningful final hearing on compensation should be close in time to the filing of
the Chapter 7 trustee’s final account.
The Debtor, Riddick L. Bowe, 1st, presented a very difficult situation as a potential
client. He is a former Heavyweight Boxing Champion of the World now 40 years old. As with
many professional athletes and entertainers, he attracted many hangers-on who appeared to have
access to his finances and acquired investment advisors who seemed to act without his best
interest in mind. Debtor’s counsel described dishonest professionals who stole large sums of
cash from him. Debtor’s Summary of Schedules reflected assets of $1,542,671.00 and debts of
$3,879,572.83. Among his assets, Debtor showed a 2001 Bentley Arnage that he valued at
$131,000.00, a 2001 Rolls Royce Parkward that he valued at $130,000.00, and a 2002 Bentley
Azure that he valued at $233,800.00. It appears that millions of dollars passed through and out
of Debtor’s hands, and, shortly before the filing of this case, he found himself with all his
income cut off, lawsuits filed against him, and property being foreclosed. The court perceives
for several reasons that the Debtor was not an easy client for WT&P. For one, he had little in the
way of documentation to supply his attorneys. For another, because of his poor treatment by
other professionals in the past, it would appear that it was not easy to obtain his confidence, and,
most likely, he was listening to other voices besides that of his attorneys.
A case under Chapter 11 involves a plan either to extend payment of debts or to make a
composition of outstanding debts that is to be funded by future income. Debtor’s only likelihood
for success of a plan depended upon what has been described as an ill-advised comeback
attempt, Daily Post (Liverpool, UK), 2005 WLNR 7123069 (May 6, 2005); Atlanta Journal-
Constitution, 2006 WLNR 14369900 (August 19, 2006). Debtor’s original Plan was replaced by
an Amended Plan filed November 20, 2006, the keystone of which was the dedication of a $1
million in future income from boxing matches. The scheduled prizefights never materialized,
and a week before the hearing on confirmation of the Amended Plan, Debtor “threw in the
Case 05-41735 Doc 329 Filed 03/21/07 Page 2 of 5

towel” and filed a Notice of Conversion to a case under Chapter 7. The court considered that
Notice, together with motions to dismiss, at a hearing on February 1, 2007, and, for the reasons
set forth in its Memorandum of Decision filed the following day, the case was converted to a
case under Chapter 7.
The Application is in perfect form and in full compliance with the Compensation
Guidelines for Professionals in this court that is attached as Appendix D to the Local Rules. The
court notes also that “billing discretion” has been used by WT&P in writing off some $88,439.05
in unbilled charges. The court will briefly go through the discussion of the 12 “Johnson” factors
described in Harman v. Levin, 772 F.2d 1150, 1152 (CA4 1985), and Barber v. Kimbrell’s Inc.,
577 F.2d 216 (CA4 1978). The court has no reason to doubt accuracy of the statement of the
time and labor expended. There is no special novelty to this case in that the Debtor is a
professional whose Plan funding would have to come from future earnings, not unlike that of a
plan filed by an architect, physician, or entertainer. One difficulty faced in this case was the
gathering of required financial information in what the court was told was an almost total
absence of records within the Debtor’s control. The amount of skill involved was not
exceptional, aside from some potentially complicated litigation. There appear to be no
opportunity costs in pressing the case, and counsel charged its customary fee. There was a time
limitation in that the case should have been filed, and was filed, prior to the amendments to the
Bankruptcy Code. The court will discuss the results obtained further on in the Opinion, and
counsel is recognized as an able bankruptcy firm. The court found nothing undesirable about the
case aside from the fact that counsel did not receive a retainer at the time of the filing of the case.
There was no previous history of relationship between the parties. There did appear to be an
extraordinary amount of time expended in the four-month period.
Nevertheless, this case went nowhere. All that was finished in this case was that the
Debtor sold some property, and used the sale proceeds to pay living expenses and, to avoid
incarceration, paid a former wife child support. Counsel spent a substantial amount of time in
running down assets and seeking the records that the Debtor was unable to produce. The court
finds that the handwriting as to the future of this case was on the wall well before the Debtor’s
election to convert was filed. There are numerous objections of over-lawyering and doing
needless work, but the court will not deal with these items individually because of the substantial
write-off made by counsel. The United States Trustee pointed out that these write-offs were not
described, making the court’s further effort to go through time entries, more difficult. The work
Case 05-41735 Doc 329 Filed 03/21/07 Page 3 of 5

done on the Plans and Disclosure Statements was fruitless. The sale of assets by the Debtor did
not necessarily benefit the estate. These funds appear to have been used for Debtor’s own
purposes.
WT&P spent substantial time dealing with the claim of Debtor’s ex-wife and avoiding
Debtor’s incarceration for contempt. Judy Hart’s counsel described this expense as being in the
nature of $80,000.00 for work done on her behalf that he, Hart’s counsel, handled on the other
side for $10,000.00. In any event, WT&P may not be compensated out of the estate for this
aspect of services described in its Application. See 11 U.S.C. § 330(a)(4)(B). The Code does
not allow payment out of the estate for such services in a case under Chapter 11 as there is no
benefit to the estate. Collier on Bankruptcy § 330.04[b][v] (15th ed. Rev. 2006) (explaining the
exception to the general rule that professional services are compensable only to the extent that
they benefit the estate for work done for individuals in limited cases under Chapter 12 and 13).
The one Johnson factor not discussed was the amounts involved and the results obtained.
The key to this Application is found in the language used by counsel on page 22 of its
Application as follows:
g. The amounts involved and the results obtained. The fees requested
by WT&P are reasonable, given the complexity and difficulty of some of the
issues involved in this case. To the extent that any progress has been made in this
case, it is a result of WT&P’s efforts before, during, and after the Application
Period. (Emphasis added)
There was little, if any, progress made in the case. Much was done was in anticipation or in aid
of litigation. Until the Chapter 7 Trustee has succeeded in, compromised, or abandoned the
litigation encompassed by this work by WT&P, the court cannot measure the results obtained.
In the final analysis of this Application, this is the most critical factor for the court to determine,
that is, the degree of success. Cf. Hensley v. Eckerhart, 461 U.S. 424, 433-434 (1983). While
counsel is not a guarantor of the success of a debtor in a case under Chapter 11, counsel cannot
be allowed prime rates for a prime failure.
In due course, at some point after the Chapter 7 Trustee has completed most of his work,
WT&P will file a final application for compensation. Considering the financial status of the
estate now, there is little point to do more on this interim application. At a later time the court
will be in a better position to measure the results obtained by the Applicant in order to reach a
decision that is fair to all parties. An appropriate order will be entered.
Case 05-41735 Doc 329 Filed 03/21/07 Page 4 of 5

cc:
Stephen B. Gerald, Esq., WT&P, Seven Saint Paul Street, Suite 1400, Baltimore, MD 21202
Lawrence R. Holzman, Esq., 6404 Ivy Lane, Suite 400, Greenbelt, MD 20770
Heather R. Sullenberger, Esq., 4113 Maple Street, Fairfax, VA 22030
Michael G. Wolff, Trustee, 15245 Shady Grove Road, Suite 465, Rockville, MD 20850
David I. Gold, Esq., United States Trustee, 6305 Ivy Lane, #600, Greenbelt MD 20770
Riddick L. Bowe, 714 Amer Drive, Ft. Washington, MD 20744
End of Memorandum
Case 05-41735 Doc 329 Filed 03/21/07 Page 5 of 5