Parkview Care and Rehabiliation Center, Inc.

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NEW YORK
---------------------------------------------------------X
In re:
Chapter 11
Parkview Care and Rehabilitation Center, Inc.
Case No. 08-71867-dte
Debtor.
---------------------------------------------------------X
MEMORANDUM DECISION AND ORDER
Appearances:
Genser, Dubow, Genser & Cona, LLP
Attorneys for Genser, Dubow, Genser & Cona, LLP
By: Jack Genser, Esq. and Kenneth Kern, Esq.
445 Broad Hollow Road, Suite 19
Melville, New York 11747
Duane Morris LLP
Attorneys for the Debtor
By: Walter J. Greenhalgh. Esq. and Gia G. Incardone, Esq.
744 Broad Street, Suite 1200
Newark, NJ 07102
Ruskin Moscou Faltisckek PC
Attorneys for the Official Committee of Unsecured Creditors
By: Michael S. Amato, Esq.
1425 RXR Plaza, East Tower, 15th Floor
Uniondale, NY 11556-1425
Department of Justice
Attorneys for the Office of the United States Trustee
By: Alfred Dimino, Esq.
560 Federal Plaza
Central Islip, New York 11722
Case 8-08-71867-dte Doc 352 Filed 09/07/10 Entered 09/07/10 15:13:49

2
Before the Court is the final application for compensation for Genser, Dubow, Genser &
Cona, LLP (“Genser”) for their work as special counsel (the “Final Application”) on behalf of
Parkview Care and Rehabilitation Center, Inc. (the “Debtor”). The Final Application seeks fees
in the amount of $112,361.90 and expenses in the amount of $4,112.61 (collectively, the “Fee
Request”). 	The Final Application also seeks compensation of $2,118.62, which represents fees
that were held back from Genser’s First Interim Fee Application. A written objection was filed
by the Debtor, and a hearing was held before the Court on July 29, 2010 (the “Hearing”), after
which the Court took the matter under submission.
This Court has jurisdiction over this core proceeding pursuant to 28 U.S.C. §§ 157(b) and
1334(b), and venue is proper pursuant to 28 U.S.C. §1409(a). 	The following constitutes the
Court’s findings of fact and conclusions of law as mandated by Fed. R. Bankr. P. 7052.
BACKGROUND:
On April 16, 2008 (the “Petition Date”) the Debtor filed a voluntary petition for relief
under chapter 11. The Debtor operates a residential nursing care facility located in Massapequa,
New York, and has been operating for over thirty-seven years. 	On May 23, 2008 the Debtor
filed an application to employ Genser as Special Counsel to the Debtor to handle specialized
non-bankruptcy litigation including, but not limited to, collection matters, Medicaid/Medicare
matters, guardianships, and health insurance disputes. 	No opposition was filed to the Genser
retention, and on June 26, 2008, the Court entered an Order authorizing the retention and
employment of Genser under section 327(e) of the Bankruptcy Code (“Code”) nunc pro tunc.
Genser filed a First Interim Fee Application on October 31, 2008, in which it sought
compensation for the period of April 16, 2008 through August 14, 2008. 	Genser requested
$21,186.25 in fees and $704.12 in expenses. At a hearing held on December 9, 2008 the Court
Case 8-08-71867-dte Doc 352 Filed 09/07/10 Entered 09/07/10 15:13:49

3
awarded Genser 90% of its fees, in the amount of $19,067.63, and all of its expenses. 	Genser
filed a Second Interim Fee Application on May 26, 2009, but withdrew it after being informed by
the Debtor that the Debtor would object to the application and also was terminating its
relationship with Genser. 	Thereafter, on August 26, 2009 the Debtor filed an application to
substitute 	the 	law 	firm 	of 	Wolf, 	Haldenstein, 	Adler, 	Freeman 	and 	Herz, 	LLP 	(“Wolf
Haldenstein”) for Genser as special counsel, and on November 3, 2009 the Court entered an
Order authorizing the Wolf Haldenstein retention.
On April 5, 2010 Genser filed the instant Final Application seeking fees in the amount of
$112,361.90 and expenses in the amount of $4,112.61 for the fee period of August 15, 2008
through February 8, 2010 (the “Final Compensation Period”).1 According to the time records
provided to the Court, the total time spent by Genser’s attorneys and paraprofessional during the
Final Compensation Period was 488.97 hours. 	Genser acted on behalf of the Debtor in the
following areas:
(1) Collection 	Matters 	– 	Genser 	worked 	on 	collecting 	on 	resident/patient 	accounts
receivables;
(2) Guardianship Matters – Genser represented the Debtor with various petitions for
guardianship in situations where the Debtor has not secured a payment source for a
resident/patient and family members are either uncooperative or unavailable;
(3) Creditors' Petitions – Genser represented the Debtor in connection with various creditors'
petitions in situations where the Debtor is owed moneys from the estate of a deceased
resident/patient;
(4) Reimbursement Issues – Genser represented the Debtor with advice on various issues
concerning 	third-party 	reimbursement, 	such 	as 	from 	the 	Medicare 	and 	Medicaid
programs;
(5) Medicaid Issues – Genser represented the Debtor in connection with the preparation,
filing and support of applications for medical assistance under the Medicaid program.
1 Genser represented to the Court in its papers and at the Hearing that any services that it performed after it was
substituted out for Wolf Haldenstein’s retention were done only as necessary to attend to time sensitive issues, and
only constituted approximately 20 hours.
Case 8-08-71867-dte Doc 352 Filed 09/07/10 Entered 09/07/10 15:13:49

4
(ECF Docket No. 270).
The Debtor filed an objection to the Final Application. While acknowledging that certain
matters handled by Genser were complex, the Debtor maintains that many were simple collection
matters, and that Genser failed to conduct a cost/benefit analysis when determining how to
proceed, resulting in higher than necessary fees and expenses. 	The Debtor requests that the
Court reduce the fees requested in the Final Application due to the “minimal benefit” to the
Debtor’s estate. 	Genser’s filed a reply to the Debtor’s objection (the “Reply”) and vigorously
disputed the Debtor’s characterization of Genser’s services.
In support of its argument that Genser failed to do a cost/benefit analysis, the Debtor
directs the Court’s attention to five of the approximately twenty-two matters that Genser worked
on for the Debtor. In the first matter the Debtor states that Genser billed the Debtor $72,000.00
to only collect $75,000.00, which represented approximately half of a $137,688.16 patient care
bill. Genser states that during its pursuit of the claim, which was in its “infancy” when the firm
got the file, Genser discovered that the Debtor’s accounts department had failed to properly
invoice the matter. Debtor was unable to provide Genser with necessary evidence or a witness
that could support the Debtor’s claims against the defendant. Genser states that it was in
constant contact with the Debtor during the litigation and always took into consideration the fees
expended on the matter.
As to the second collection matter, the Debtor complained that Genser incurred
$4,257.00 in fees in an attempt to collect on an unpaid patient care bill of $5,499.00 that
ultimately Genser was unable to recover and advised the Debtor to write off. However, in its
Reply, Genser says that the Debtor is incorrect as to the amount billed and that Genser only
Case 8-08-71867-dte Doc 352 Filed 09/07/10 Entered 09/07/10 15:13:49

5
billed $409.47 for the matter, and that the only work done post-petition was correspondence sent
to the Debtor requesting the authority to close the case.
With the third collection matter, the Debtor claims that a settlement offer was made by
the defendant in the matter that Genser rejected out of hand without ever communicating the
offer to the Debtor. Furthermore, the Debtor complains that although Genser billed $12,768.00
for the matter, it did not recover any portion of the bill for benefit of the Debtor’s estate. Genser
states that in this matter it was successful in getting meritless counterclaims against the Debtor
dismissed, and that when it received offers to settle the litigation, it was the Debtor that rejected
the offers. As for the proposed settlement offer that the Debtor asserts Genser never
communicated to the Debtor, Genser states that when it received the offer it informed the
defendant in that matter that Genser was not optimistic that the Debtor would accept the
settlement. Genser maintains that this was not a rejection of the offer, but was a negotiation
tactic.
With respect to the fourth matter, the Debtor complains that Genser billed the Debtor
$18,217 in fees for obtaining information from the patient or the patient’s family/representatives
that was necessary to complete a Medicaid application. Additionally, in that matter the court
handling the proceeding awarded Genser fees that Genser did not immediately turn over to the
Debtor in violation of the Code until after receiving specific demands from the Debtor about the
procedures for compensation required by the Code. Genser maintains that its billing was
appropriate as its work in the matter was for both a guardianship proceeding and securing
Medicaid benefits for the patient. Genser’s states that its efforts resulted in the Debtor receiving
over $154,000.00 in full reimbursement of the patient’s account. As to the issue with the fees
that were not immediately turned over, Genser cites its unfamiliarity with the Code, and states
Case 8-08-71867-dte Doc 352 Filed 09/07/10 Entered 09/07/10 15:13:49

6
that once it was informed as to the compensation procedure set forth in the Code it turned over
the fees.
The final matter that the Debtor complains of relates to Genser’s fees in completing a
Medicaid application for an individual patient. Genser charged the Debtor $10,956.00 for the
matter, but Debtor only recovered $22,343.22 from Medicaid, wiping out approximately half of
the value to the Debtor’s estate. Genser asserts that the fees charged were appropriate for the
work performed, which included filing and processing the Medicaid Application, which required
Genser communicating with federal and state agencies due to the patient’s failure to provide any
of the necessary documentation and resulted in the Debtor receiving funds from Medicaid as
opposed to receiving nothing at all.
There were two other issues that the Debtor raised in its objection. The first was that
Genser’s billing was inconsistent since its First Interim Fee Application had the billing in fifteen
minute increments, and the Final Fee Application had the billing in ten minute increments.
Genser asserts that it modified its billing practices to be in accordance with the Bankruptcy
Rules. The Debtor also states that Genser failed to comply with its contractual requirement to
furnish the Debtor with monthly status reports, and that Genser excessively billed the Debtor
approximately $2,000 for one of the reports. However, Genser states that it was the Debtor’s
administrator that asked Genser to refrain from the monthly status reports in order to keep costs
down, and that the administrator informed Genser that the reports could be given verbally.
Genser cites to five other cases that it worked on for the Debtor as evidence of how
Genser’s performance has resulted in significant awards that benefited the Debtor’s estate. In the
first collection matter cited by Genser, Genser recovered $217,812.00 for the Debtor and billed
the Debtor $23,880.24, approximately 11% of the amount recovered for the Debtor. The second
Case 8-08-71867-dte Doc 352 Filed 09/07/10 Entered 09/07/10 15:13:49

7
collection matter cited by Genser states that Genser recovered $185,500.00 from Medicaid for
the Debtor and only billed the Debtor $3,292.24. In the third collection matter that Genser cited
to, Genser recovered $77,655.20 for the Debtor and billed $9,235.95. Genser was able to collect
$45,006.42 owed to the Debtor and billed a nominal fee of $1,582.27, which was approximately
3% of the amount recovered. In the final matter cited by Genser, it was successful in getting
$260,000.00 from Medicaid for the Debtor that only resulted in a bill to the Debtor in the amount
of $4,785.78.
The Court notes that the Official Committee of Unsecured Creditors (the “Committee”)
filed a written objection to the Final Application, but orally withdrew its objection at the
Hearing. Additionally, at the Hearing the Office of the United States Trustee informed the Court
that it had no objections to the Final Application. 	This leaves the Debtor as the only objecting
party.2 At the conclusion of oral arguments, the Debtor requested additional time to file further
written objections. 	The Court granted the request and gave the Debtor ten days for further
submissions, and also provided Genser with ten days to file a reply. The Court notes that the ten
day period has elapsed for both parties, and the Court has not received any additional papers.
Thus, the Court will proceed based upon the papers that were submitted in advance of the
Hearing and the record of the Hearing.
DISCUSSION :
Section 330 of the Code provides that a bankruptcy court can award “reasonable
compensation for actual, necessary services” that have been rendered by a professional of the
estate as well as actual and necessary expenses. 11 U.S.C. §§ 330(a)(1)(A) and (B) (2010).
Bankruptcy judges “have wide discretion in fixing the amount of attorney fees to be awarded in
2 1199 SEIU United Health Care Workers East (the “Union”) and 1199SEIU Greater New York Funds (the “Funds”)
filed a reservation of rights to object to the Final Application, but they have not raised any formal objections.
Case 8-08-71867-dte Doc 352 Filed 09/07/10 Entered 09/07/10 15:13:49

8
proceedings before them.” In re Waxman, 148 B.R. 178, 181 (Bankr. E.D.N.Y. 1992). Before
determining “the reasonableness of the service, the Court must make a threshold inquiry into its
necessity.” In re Keene Corp., 205 B.R. 690, 696 (Bankr. S.D.N.Y. 1997) (internal citations
omitted). A majority have held that if a service benefits the estate, then it would be “necessary.”
Id. (citing In re Engel, 190 B.R. 206, 209 (Bankr. D.N.J. 1995)). According to the Code, a
bankruptcy court’s inquiry into the reasonableness of compensation shall include, but is not
limited to:
(A) the time spent on such services;
(B) the rates charged for such services;
(C) whether the services were necessary to the administration of,
or beneficial at the time at which the service was rendered toward
the completion of, a case under this title;
(D) whether the services were performed within a reasonable
amount of time commensurate with the complexity, importance
and nature of the problem, issue or task addressed;
….
(F) 	whether 	the 	compensation 	is 	reasonable 	based 	on 	the
customary 	compensation 	charged 	by 	comparably 	skilled
practitioners in cases other than cases under this title.
See 11 U.S.C. §330(a)(3)(A-F). Furthermore, when determining the reasonableness a court
“must not penalize attorneys by viewing the efforts of counsel with the benefit of ‘20/20
hindsight.’” In re Korea Chosun Daily Times, Inc., 337 B.R. 758, 767 (Bankr. E.D.N.Y. 2005)
This Court has previously noted that when making a determination as to whether fees are
reasonable, the Second Circuit will consider, inter alia, the following:
(1) the time and labor required; (2) the novelty and difficulty of the
questions; (3) the level of skill required to perform the legal
service properly; (4) the preclusion of employment by the attorney
due to acceptance of the case; (5) the attorney’s customary hourly
rate; (6) whether the fee is fixed or contingent; (7) the time
limitations imposed by the client or the circumstances; (8) the
amount involved in the case and the results obtained; (9) the
experience, 	reputation, 	and 	ability 	of 	the 	attorneys; 	(10) 	the
“undesirability” of the case; (11) the nature and length of the
Case 8-08-71867-dte Doc 352 Filed 09/07/10 Entered 09/07/10 15:13:49

9
professional relationship with the client; and (12) awards in similar
cases.
In re Schackner, 2010 Bankr. LEXIS 1224, *10 (Bankr. E.D.N.Y. Apr. 6, 2010) (quoting Arbor
Hill Concerned Citizens Neighborhood Ass’n v. County of Albany, 522 F.3d 182, 186-90 (2d Cir.
2007), which held that courts should consider the factors in Johnson v. Ga. Highway Express,
Inc., 488 F.2d.714 (5th Cir. 1974)). However, the pertinent test “is an objective one” which
considers “what services a reasonable lawyer or legal firm would have performed in the same
circumstances.” In re Keene Corp., 205 B.R. at 696.
The Debtor raises a serious charge in its contention that “[a]t all times, Genser Dubow
failed to weigh the costs and benefits to initiating or continuing certain litigation based upon the
likelihood of success or recovery, resulting in an overall failure to handle the Debtor’s cases in a
cost-effective manner.” (Debtor’s Objection at 2). However, the Court disagrees.
It is clear from a review of the time records submitted that Genser expended time and
labor in its efforts on behalf of the Debtor. 	The Debtor references five matters that Genser
worked on, of approximately twenty-two, in support of its arguments. 	However, as shown
above, Genser has provided the Court with credible reasons as to why the fees were incurred in
those “problem” cases, and Genser even points out that in one of those cases, it was the Debtor’s
own accounting department that appears to have precluded a more speedy resolution of the
matter that may have resulted in reduced fees. The Debtor did not provide evidence to support
its allegations.
The Debtor does not complain of the rate that Genser charged for the work performed,
and does not assert that the attorneys at Genser were not experienced and capable attorneys.
Rather, the Debtor complains that, in its opinion, Genser could have done a better cost/benefit
analysis with respect to the matters worked on, and that Debtor feels that the actions taken
Case 8-08-71867-dte Doc 352 Filed 09/07/10 Entered 09/07/10 15:13:49

10
resulted in a greater number of hours that caused the Debtor’s estate to incur unnecessary fees
and expenses for the Debtor’s estate.
The Court will not use hindsight to determine whether Genser’s litigation strategy was
the appropriate one to take, especially in light of the various paths that Genser could have taken
and the complexities, as Debtor acknowledges, of the matters that it was handling. 	It appears
that the actions taken by Genser were reasonable, and did in fact benefit the estate. 	In fact,
Genser’s Reply highlighted five cases where Genser recovered substantial sums for the benefit of
the Debtor’s estate, and billed the Debtor for a percentage of no more than 12% and as little as
2% of the total recoveries in those matters.
The Debtor’s dissatisfaction with Genser notwithstanding, the Debtor has not shown how
Genser’s handling of the matters resulted in an “overall failure” in handling the litigation or how
the actions taken were unreasonable and did not benefit the estate. 	As a result, the Court finds
Genser’s fees to be reasonable, and Genser should be compensated.
CONCLUSION :
Having reviewed the time records of the Final Application and the First Interim Fee
Application, the Court finds that a de minimis reduction in the amount of fees is appropriate in
light of some instances of duplicative work, and as such the Court will not award the amount
held back from the First Interim Fee Application in the sum of $2,118.62.
Case 8-08-71867-dte Doc 352 Filed 09/07/10 Entered 09/07/10 15:13:49

11
Based 	on 	the 	foregoing, 	Genser’s 	Application 	is 	granted, 	and 	Genser 	shall 	be
compensated fees in the amount of $112,361.90, representing the total amount sought in its Final
Application. Genser’s requested expenses in the amount of $4,112.61 are also approved.
So ordered.
Dated: Central Islip, New York
September 7, 2010
s/ Dorothy Eisenberg
Honorable Dorothy Eisenberg
Case 8-08-71867-dte Doc 352 Filed 09/07/10 Entered 09/07/10 15:13:49