Aldridge Rainwater, Jr.

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF MARYLAND
at Greenbelt
IN RE: :
:
ALRIDGE RAINWATER, JR. : Case No. 04-17440PM
: Chapter 7
Debtor :
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IN RE: :
:
JACQUELYN ROBINSON : Case No. 05-11969PM
: Chapter 7
Debtor :
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - :
MEMORANDUM OF DECISION
Before the court are Applications for Compensation filed Roger Schlossberg as the
Chapter 7 Trustee and as the attorney for the Chapter 7 Trustee acting pursuant to court
authorization in the above cases. Both Final Accounts have been approved by the United States
Trustee for the District of Maryland. Jacquelyn Robinson filed an objection to the Final Account
rendered in her case; no objection was filed in the Alridge Rainwater, Jr. case.
The Applications are filed pursuant to § 330(a)(1) and (2) of the Bankruptcy Code that
provides:
§ 330. Compensation of Officers
(a)(1) After notice to the parties in interest and the United States Trustee
and a hearing, and subject to sections 326, 328, and 329, the court may award to a
trustee, an examiner, a professional person employed under section 327 or 1103--
Date signed January 16, 2007
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(A) reasonable compensation for actual, necessary services rendered by the
trustee, examiner, professional person, or attorney and by any
paraprofessional person employed by any such person; and
(B) reimbursement for actual, necessary expenses.
(2) The court may, on its own motion or on the motion of the United
States Trustee, the United States Trustee for the District or Region, the trustee for
the estate, for any other party in interest, award compensation that is less than the
amount of compensation that is requested.
The Bankruptcy Court has the duty and the power to review fee applications whether or not an
objection has been filed. In re Busy Beaver Building Centers, Inc., 19 F.3d 833 (CA3 1994).
The court finds that Mr. Schlossberg, who acted as Trustee and counsel in both cases,
produced exemplary results for the creditors. In the RAINWATER case, those creditors who
filed timely proofs of claim received a dividend in the full amount of their claim, together with
interest. In addition, a $10,689.82 surplus was returned to the Debtor. The creditors in the
ROBINSON case filing timely proofs of claim were paid in full, as well as three creditors not
filing proofs of claim for whom the Trustee filed untimely proofs of claim on August 3, 2006.
Bankruptcy Rule 3004 provides in pertinent part:
Rule 3004. Filing of Claims by Debtor or Trustee
If a creditor fails to file a proof of claim on or before the first date set for
the meeting of creditors called pursuant to § 341(a) of the Code, the debtor or
trustee may do so in the name of the creditor, within 30 days after expiration of
the time for filing claims prescribed by Rule 3002(c) or 3003(c), whichever is
applicable. . . .
The bar date for filing proofs of claim pursuant to the Notice of Need to File Proof of Claim Due
to Recovery of Assets in ROBINSON, dated March 11, 2005, was June 9, 2005. Under Rule
3004, the Trustee had 30 days after that date to file a timely proof of claim. However, because
no one filed objections to the allowance of these untimely claims, and they stand allowed.
In the RAINWATER case, Mr. Schlossberg seeks attorney’s fees of $5,719.75, Trustees
fees of $13,387.83 and reimbursement of expenses of $19.58. In the ROBINSON case, Mr.
Schlossberg seeks attorneys fees of $5,333.00, voluntarily reduced from $6,503.00, Trustee’s
fees of $17,952.24 and reimbursement of expenses of $83.07. The court finds both applications
for attorney’s fees in order and will allow those fees in the amounts sought as well as the
Trustee’s expenses claimed. What concerns the court are the fees sought in both cases as trustee.
In the course of the hearing in the ROBINSON case, Mr. Schlossberg pointed out, as stated
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above, that the account had been reviewed without objection by the office of the United States
Trustee. No one from that office appeared in connection at the hearing on compensation.
In the course of the hearing, Mr. Schlossberg invited the court’s attention to § 330(a)(7)
of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”) in
addition to the Bankruptcy Code. That section provides: “In determining the amount of
reasonable compensation to be awarded to a trustee, the court shall treat such compensation as a
commission based on § 326.” Mr. Schlossberg suggests that this is a clear acknowledgment by
Congress that courts had misinterpreted its prior enactment, and that this court should operate
under the new legislation and allow the commission without the necessity of a finding of
reasonableness. There is a difference of opinion with respect to the interpretation of this new
section. Compare, In re American Canadian Investments, Inc., ftn. 7, ___ B.R. ____, WL
3095642, (BC E.D. Va. 2006), with In re Clemens, 349 B.R. 725, 732-733 (BC Utah 2006). In
any event, this amendment to the Bankruptcy Code was not made applicable to pending cases by
BAPCPA, and the court need not reach this issue in this case. One authority states that “courts
may be expected to continue to assess the reasonable of the trustee’s fee and award a fee that is
less than the statutory commission in light of the effort expended or results obtained. See Collier
on Bankruptcy, 15th ed. Rev., § 330.03[1][a] (2006).
The source of the funds for the remarkable distributions to creditors in these two cases
came from proceeds of sale of the Debtors’ homes by a real estate broker, Sharon B. Taylor.
Commissions of $12,600.00 in the RAINWATER case and $17,700.00 in the ROBINSON case
were paid to Ms. Taylor, as reflected on the Trustee’s cash receipts and disbursement record.
Under § 330(a)(2) of the Bankruptcy Code in its formulation applicable to this case, the
court may award to the Chapter 7 Trustee reasonable compensation for actual necessary services
rendered, together with reimbursement for actual and necessary expenses.
In the ROBINSON case, the Trustee’s Application shows that 16.15 hours were devoted
as trustee to the case, resulting in an hourly fee of $1,111.60. In the RAINWATER case, the
Trustee’s Application shows that 18.65 hours were devoted to the case, resulting in an hourly fee
of $717.85 to the Trustee for his services as Trustee. Of this time, 5.25 hours were devoted to 21
monthly reconciliations of the Trustee’s bank account, and 10 hours of which are lumped
together as “post-filing duties, including, but not limited to, disbursing checks, conferring with
U.S. Trustee’s office on Final Report approval issues, draft and filing request for discharge and
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zero balance report, fielding creditor inquiries, locating creditors if checks are returned, paying
funds into the Registry of Court, etc.” This results in the RAINWATER estate being billed
$7,178.50, and the ROBINSON estate being billed $11,116.00 for these ministerial services
connected with the closing of every “asset” case under chapter. In ROBINSON the estate is also
billed 3.5 hours for routine bank services.
After further careful consideration of the record in both cases, the court finds that the
reasonable compensation for the actual and necessary services rendered by the Trustee in the
ROBINSON case is $6,150.00, and in the RAINWATER case is $6,750.00. In making this
assessment, the court appreciates the fact that the Trustee must, even though the Accounts were
approved by the office of the U.S. Trustee, restate the Accounts and spend some additional time
on that. Finally, nothing in this case should detract from the exemplary work done by the
Trustee. The creditors were well-served by his efforts.
Appropriate orders will be entered.
cc:
Roger Schlossberg, Trustee, 134 West Washington St., P.O. Box 4227, Hagerstown, MD 21741
Anu Kint, Kemet & Hunt, 4920 Niagara Road, #206, College Park, MD 20740
Aldridge Rainwater, Jr., 3123 Forest Run Drive, District Heights, MD 20747
David I. Steinberg, 8630 Fenton Street, #320, Silver Spring, MD 20910
Jacquelyn Robinson, 202 Castelton Terrace, Largo, MD 20774
United States Trustee, 6305 Ivy Lane, #600, Greenbelt MD 20770
End of Memorandum
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