Kora & Williams Corp.

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF MARYLAND
at Greenbelt
IN RE: :
:
KORA & WILLIAMS CORP. : Case No. 88-41402PM
d/b/a CORMAC CONSTRUCTION CORP. : Chapter 7
:
Debtor :
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MEMORANDUM OF DECISION
This case is before the court on the Trustee’s Notice of Proposed Settlement and
Compromise with Watt Tieder Hoffar & Fitzgerald, LLP (“Watt Tieder”). The proposed
compromise deals with what might be an untimely motion for reconsideration of this court’s
Memorandum of Decision and Order on the First and Final Application for Compensation filed
by Watt Tieder that was entered November 15, 2004. Under this court’s ruling, the
compensation of Watt Tieder was limited to the amount calculated as due under the contingent
fee agreement. Sixteen days after entry of the Order, Watt Tieder filed a Motion for
Reconsideration of the Order, pursuant to which it sought this court to “clarify” its ruling and
order that the base for Watt Tieder’s compensation included interest distributable to unsecured
creditors, other than Insurance Company of North America (“INA”) in calculating its 25%
contingency fee. Initially, the Trustee opposed this motion. But he now proposes a settlement
that would result in Watt Tieder being paid a sum equivalent to 12-½% of the interest paid to
applicable unsecured creditors. The proposed settlement is opposed by Ira Steinberg
(“Steinberg”), the holder of unsecured claims without priority and Debtor’s sole equity interest
holder. The Trustee reports that in all likelihood all unsecured creditors will be paid in full, and
Date signed July 19, 2005
Entered: July 21, 2005 Case 88-41402 Doc 644 Filed 07/21/05 Page 1 of 3

there will be a substantial surplus to be turned over to Steinberg.
The proposed settlement will eliminate the risks to the estate of the motion for
reconsideration and any appeals therefrom. It will assist in bringing this 17-year old case to a
conclusion. The Trustee urges that the settlement is reasonable and in the best interests of the
estate, “due to the risks of litigation and the magnitude of the Claim.” Steinberg sees matters
otherwise. He has standing both as a creditor and as the owner of all of the equity of the Debtor
and is thus entitled to the residue remaining in the estate after all creditors have been paid in full.
He will bear the brunt of any unfavorable result.
For starters, Steinberg suggests that this is an untimely motion in that it was filed well
beyond the 10-day period allowed for such motions under Fed. Rule of Bankruptcy Proc. 9023
that makes Fed. R. Civ. P. 59 applicable in bankruptcy cases. He may well be right, if the court’s
Order is in fact a final order. However, the Order is incomplete in one respect. It states the
formula for calculating the fee, but not the exact amount. The court finds that a debatable issue
exists as to the finality of the court’s Order. But, the court also finds that its decision does not
call for one clarification requested by the moving party. Interest is not to be a component of the
contingent fee of counsel.
In bankruptcy cases under Chapter 7, the court accords great weight to the business
decisions of the trustee, particularly in making recommendations to resolve disputes and bringing
cases to a conclusion. But here, considering the original position of the Trustee in resisting the
motion, the court is inclined to balance the weight given the Trustee’s business decision with the
wishes of Ira Steinberg, the principal party in interest. The court agrees with the Trustee that
substantial costs will be incurred in the course of an appeal and any re-trial. If the motion for
reconsideration is found to be timely filed, complicated issues will be argued on appeal. But the
court finds that the Trustee has not made a sufficient showing to cause the court to approve the
settlement. In so doing, the court is not saying that it is 100% certain as to the durability of its
decision on appeal. It rarely is. But here, the risk of reversal falls entirely upon the party
objecting to this settlement. The court believes that Mr. Steinberg should have his day in court,
because all of the costs of this exercise will be borne by him.
An appropriate order will be entered.
Case 88-41402 Doc 644 Filed 07/21/05 Page 2 of 3

cc:
William B. Sullivan, Trustee, Womble Carlyle, P.O. Drawer 84, Winston-Salem, NC 27102
Jeffrey Tarkenton, Esq., Womble Carlyle, 1401 I Street, N.W., Washington, DC 20005
Robert G. Watt, Esq., Watt Tieder, 7929 Westpark Drive, Suite 400, McLean, VA 22102
Morton Faller, Esq., Shulman Rogers, 11921 Rockville Pike, Rockville, MD 20852
Daniel Litt, Esq., Dickstein Shapiro, 2101 L Street, N.W., Washington, DC 20037
David C. Romm, Esq., Winston & Strawn, 1400 L Street, N.W., Washington, DC 20005
Craig M. Palik, Esq., Greenan & Walker, 6411 Ivy Lane, Suite 200, Greenbelt, MD 20770
End of Memorandum
Case 88-41402 Doc 644 Filed 07/21/05 Page 3 of 3