QSR Steel Corporation, LLC

UNITED STATES BANKRUPTCY COURT
DISTRICT OF CONNECTICUT
HARTFORD DIVISION
In re:
QSR Steel Corporation, LLC,
Debtor.
Chapter 11
Case No. 24-20562 (JJT)
Re: ECF Nos. 438, 527
MEMORANDUM OF DECISION AND ORDER APPROVING IN PART
AND DENYING IN PART FINAL APPLICATION FOR COMPENSATION
Before the Court is the Final Application for Compensation (Application, ECF
No. 438) of the Debtor’s Accountant, CBIZ, Inc. (CBIZ). The Court previously
approved in part and denied in part the Application, but provided for the Debtor to
file a supplemental objection and for CBIZ to respond (Preliminary Order, ECF No.
527).1
After the Debtor filed its Supplemental Objection on September 17, 2025
(ECF No 557), counsel for CBIZ appeared and requested additional time in order to
file responsive papers. Following a stipulation of the parties, CBIZ filed an offer of
proof on October 10, 2025 (ECF No. 583), with the Debtor responding one week later
(ECF No. 594). After a review of the parties’ submissions, the Court determines that
no further hearing is necessary.
The Debtor rightly notes that CBIZ’s2 retention application (ECF No. 71)
states that “[t]he maximum amount of compensation shall be $100,000, subject to
1 The Court assumes the parties’ familiarity with the Preliminary Order and the history discussed
within it.
2 Then known as Marcum LLP.
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increase if necessary and approval by the Court.” But in its interim application—
filed by Debtor’s counsel—CBIZ sought compensation in the amount of $109,680.
With the Debtor’s support, the Court approved the interim application (ECF No.
384) and the Debtor paid CBIZ the full amount requested.
The Debtor now complains that CBIZ should not have received more than
$100,000 in compensation, despite supporting the interim application and paying
the full amount.3 Additionally, the Debtor argues that CBIZ’s Application (which
would include an additional $24,840 in compensation) should be denied because it
exceeds the cap and CBIZ failed to perform several tasks outlined in its retention,
including the failure to file 2024 taxes. Although the Debtor has stated that it is
engaging other professionals to complete these tasks, it has delineated no damages
with particularity.
The Debtor also complains that CBIZ has failed to account for a $20,000
retainer that was provided prepetition. In its response, CBIZ states that the
retainer was used to pay down in part outstanding invoices for prepetition work.
But the checks used to pay the retainer were issued postpetition. CBIZ’s application
stated that it had “agreed to advise and assist the Debtor in its chapter 11 cases
under a pre-petition retainer the Debtor arranged to provide in the amount of
$20,000.00[.]” Although the retainer was not paid until after the case was
commenced, CBIZ’s application explicitly noted that such was for work in the
3 Although the Court could interpret these actions as a waiver of any argument against such
additional compensation being necessary, the Court need not make such a determination for reasons
discussed below.
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Chapter 11 case.4 Because the retainer was not earmarked for prepetition debts—
and CBIZ was fully compensated otherwise—CBIZ must return it.5
As for the additional $24,840 CBIZ seeks in the Application, the Court,
sensitive to the integrity and reliability of its orders, will enforce the cap and deny
any further compensation.6 The Court will reaffirm the approval of interim fees in
the amount of $109,680, but will require the disgorgement of $9,680 as a reasonable
estimate of the amount the Debtor will pay to complete its 2024 tax returns and
other tasks left discerningly incomplete by CBIZ.7 Accordingly, it is hereby
ORDERED: This Order supersedes the Preliminary Order; and it is further
ORDERED: The Application is approved with respect to the $109,680 that
were approved in the Court’s prior order approving compensation but denied with
respect to the $24,840 of additional compensation sought in the Application; and it
is further
4 The Debtor argues that this application of funds was a preference. But a preference requires a
transfer before the petition. 11 U.S.C. §547(b)(4). The application of funds by CBIZ more closely
resembles an unauthorized postpetition transfer. See 11 U.S.C. § 549. It may also have violated the
automatic stay. See 11 U.S.C. § 362(a). Because the Court will order the disgorgement of the $20,000,
no further action need be taken on this account.
5 The prepetition invoices make CBIZ a prepetition creditor. Given that the proof of claim deadline
has long since passed (ECF No. 11), the Court will not allow CBIZ to file any claim for any
prepetition debts. The Court further notes that the application of the retainer to any prepetition fees
was neither disclosed by CBIZ (or its predecessor) nor approved by this Court.
6 Cf. Brown Media Corp. v. K&L Gates, LLP, 854 F.3d 150, 163 (2d Cir. 2017) (“We are mindful that
bankruptcy proceedings are a forum where finality of court orders is particularly important[.]”)
(citation and internal quotation marks omitted).
7 Irrespective of fault, CBIZ would not necessarily be compensated further for performing any of the
incomplete tasks. That the Debtor will now need to have others perform the work warrants a modest
return of funds.
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ORDERED: CBIZ shall return $29,680 to the Debtor within fourteen (14)
days of this Order, representing disgorgement of the $20,000 retainer and $9,860 of
compensation previously paid; and it is further
ORDERED: CBIZ shall certify its compliance with this Order on the docket of
this case within twenty-one (21) days of the issuance of this Order.
Date: October 27, 2025
Hartford, Connecticut
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