Frank E Nicol and Mary Rose Nicol

1 Involuntary Chapter 7 cases were commenced against Mary Rose Nicol (Case No. 08-
11556) and Frank E. Nicol (Case No. 08-11555) on February 5, 2008. On February 27, 2008,
each of the Debtors moved to convert their cases to cases under Chapter 11. On April 14, 2008,
the two cases were substantively consolidated, the lead case being designated Case No. 08-
11555. On July 17, 2008, upon the Debtors’ motion, the consolidated case was re-converted to
one under Chapter 7.
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF MARYLAND
at Greenbelt
IN RE: 	:
:
FRANK E. NICOL 	: 	Case No. 08-11555PM
MARY ROSE NICOL 	: 	Chapter 7
:
Debtors 	:
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - : 	CONSOLIDATED
IN RE: 	:
:
MARY ROSE NICOL 	: 	Case No. 08-11556PM
: 	Chapter 7
Debtor 	:
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - :
MEMORANDUM OF DECISION
Before the court is the Application for Allowance of Compensation (“Application”) of
Laura Margulies & Associates, LLC (“Counsel”), for compensation for services rendered to the
Debtors, Frank E. Nicol and Mary Rose Nicol, for the period from March 14, 2008, to July 11,
2008. The Application covers the period when the Debtors were in a case under Chapter 11.1
Counsel first billed the Debtors on March 14, 2008, and filed a Notice of Appearance on March
27, 2008. Counsel seeks allowance of compensation of $21,324.00 and reimbursement for out-
Date signed November 13, 2008
Entered: November 14, 2008 Case 08-11555 Doc 218 Filed 11/14/08 Page 1 of 5

of-pocket expenses of $147.28. The Rule 2016(b) Disclosure Statement filed March 27, 2008
(#20), discloses that Counsel received a retainer of $15,000.00, and that Counsel’s hourly fee
was $350.00 for attorneys and $95.00 for paralegal services.
This consolidated case truly went nowhere. The Debtors’ sojourn in Chapter 11 was ill-
advised and doomed to failure. The Debtors’ Schedules reflected the ownership of three parcels
of real property, ownership of the equity in ten limited liability companies that owned parcels of
real property, three limited liability companies that appear to be shells, and two corporations of
no stated value.
On April 9, 2008, Countrywide Home Loans, Inc. moved for relief from the automatic
stay (#29) as to the Debtors’ residence, and on April 24, 2008, another secured creditor moved
for relief from the automatic stay (#43) to proceed to enforce a lien on the Debtors’ Bethany
Beach, Delaware property. On April 28, 2008, Washington Mutual Bank (“WAMU”) filed a
motion for relief from the automatic stay (#46) as to property held in the name of an LLC located
at 1911 8th Street, N.W., Washington, D.C. The following day, yet another creditor moved for
relief from the automatic stay (#50) as to another LLC’s holding at 566 Newcomb Street, S.E.,
Washington, D.C. Counsel filed timely brief responses to these motions to the effect that, while
the Debtors could not admit or deny the allegations as to the failure to make payments under the
loans, the properties were necessary for an effective reorganization and that the Debtors had
equity in the properties. On May 16, 2008, WAMU filed a motion for relief from the automatic
stay (#70) accompanied by a proposed consent order for property in Washington, D.C. held by
another LLC. Orders were subsequently entered with the Debtors consenting to the relief sought
as to the motions filed at #43, #46 and #70. On June 19, 2008, WAMU filed a motion for relief
from the automatic stay (#94) as to still another LLC-owned parcel.
On July 11, 2008, in apparent recognition of the futility of their situation, the Debtors
filed a motion to re-convert the consolidated case back to a case under Chapter 7. The case was
filed prior to the holding of a meeting of creditors pursuant to 11 U.S.C. § 341(a), and quite
obviously, a Plan and Disclosure Statement were never filed. The court is faced with
determining what is reasonable final compensation for the services rendered to the Debtors by
Counsel during their failed attempt at reorganization.
In fixing the reasonable compensation for actual, necessary services rendered by Counsel
to the Debtors to be allowed under 11 U.S.C. § 330(a)(1), the court is guided by such cases as
Harman v. Levin, 772 F.2d 1150, 1152 n. 1 (CA4 1985); In re Courtois, 222 B.R. 491 (BC Md.
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1998); and In re Bernard Hill, Inc., 133 B.R. 61, 69-70 (BC Md. 1991). These cases adopt the
criteria originally appearing in the leading case of Johnson v. Georgia Highway Express, Inc.,
488 F.2d 714, 717-718 (CA5 1974), in determining the reasonableness of the compensation
sought, bearing in mind that in all such cases the burden of proof remains with the attorney. See
In re A.H. Robins Co., Inc., 86 F.3d 364, 373 (CA4 1996).
Before making the lodestar analysis of the Application under the Johnson criteria, the
court has some preliminary observations. First, Ms. Marguiles is a well-experienced bankruptcy
attorney. Her hourly fee of $350.00 is fair in this case, assuming the efficient use of time
expected of such counsel. The charge of $1,166.67 seems excessive for preparing boiler plate
pleadings such as the Notice of Appearance, Disclosure of Compensation, Motion to Extend
Time, Application to Employ Attorneys and Motion to Consolidate Cases. Orders for Joint
Administration are granted as a matter of course, and orders for consolidation usually follow the
absence of objection after notice to all creditors. The court is surprised by a charge of $466.67
for research on factors for consolidating the two cases. The law is straightforward on this issue.
See generally In re Bunker, 312 F.3d 145 (CA4 2002); FED . R. BANKR . PROC . 1015; LOCAL
BANKR . R. 1015-1. There are charges aggregating $4,725.00 for preparing the Schedules and
Statement of Financial Affairs. While this appears excessive, the court takes counsel at her
word. But, the charges for amending the Schedules of $5,279.15 are, to use the vernacular, out
of sight.
The court will now do a lodestar analysis.
1. 	Time and labor expended. The court has no reason to question the statement of time
expended by Counsel.
2. 	Novelty and difficulty of questions raised. There appears nothing that is novel or
difficult in this consolidated case. Aside from assembling information, Counsel’s main task was
to conduct a holding operation.
3. 	Customary fee for like work. Counsel’s charges are within the range charged by
lawyers in this area.
4. 	Skill required to properly perform legal services rendered. What was done in this
case for the Debtors could have been performed by any member of this Bar with ordinary skill.
5. 	Preclusion of other employment. This is not a factor.
6. 	Whether fee is fixed or contingent. Counsel in cases under Chapter 11 always face
the risk of their clients not being able to pay them for services rendered or that the court may not
Case 08-11555 Doc 218 Filed 11/14/08 Page 3 of 5

allow the amount of compensation sought. Here, Counsel was protected in part by the large
retainer.
7. 	Time limitations imposed. Other than the requirements of filing a response in 30
days to motions filed under 11 U.S.C. § 362(a) and to file Schedules promptly, there were no
significant time limitations.
8. 	Amount in controversy and results obtained. The Debtors scheduled approximately
$9.8 million in property and $11.3 million in debt. The case is now in Chapter 7. They will
emerge with their debts discharged and their exempt property that appears to have a total value
of less than $9,000.00. While Counsel is not a guarantor of the success of cases under Chapter
11, this case appeared early on not likely to lead to any successful result. Counsel states in
support of this Application that her work will result in the Chapter 7 Trustee having a better
understanding of this case.
9. 	Experience, reputation and ability of attorney. Counsel is an experienced and well-
regarded attorney who generally represents consumer debtors in this court.
10. Undesirability of the case. This is not a factor.
11. Nature and length of professional relationship with clients. Counsel had no
relationship with the Debtors prior to the employment in this case.
12. 	Attorney fee awards in similar cases. As stated above, the hourly fee sought is
within the range of fees allowed attorneys in individual cases under Chapter 11. However, in
some cases under Chapter 11, particularly where the results have been as unfavorable as here,
the court has allowed 0% to 80% of the fees sought.
Counsel’s representation resulted in little or no benefit to the Debtors or to the estate.
After consideration of all the factors set forth above, the court will allow final compensation to
Counsel for the Debtors in the sum of $15,000.00 and reimbursement of out-of-pocket expenses
of $147.28. Counsel may apply the retainer of $15,000.00 to the allowed fee and is allowed
$147.28 as a Chapter 11 administrative expense under 11 U.S.C. § 726(b).
An appropriate order will be entered.
cc: 	Frank E Nicol and Mary Rose Nicol
1000 Tucker Lane
Ashton, MD 20861
Case 08-11555 Doc 218 Filed 11/14/08 Page 4 of 5

Laura J. Margulies
Laura Margulies & Associates, LLC
6205 Executive Blvd.
Rockville, MD 20852
First United Bank and Trust
c/o Roger Schlossberg, Esq.
134 West Washington Street
P.O. Box 4227
Hagerstown, MD 21741-4227
Roger Schlossberg
134 West Washington Street
P.O. Box 4227
Hagerstown, MD 21741-4227
Cheryl E. Rose
12154 Darnestown Road
Box 623
Gaithersburg, MD 20878
Lynn A. Kohen
U.S. Trustee Office
6305 Ivy Lane, Suite 600
Greenbelt, MD 20770
End of Memorandum
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