Kathleen Nellis Cole

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
IN RE:
KATHLEEN NELLIS COLE,
Debtor.
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Case No. 10-925
Chapter 13
MEMORANDUM OPINION
Aaron C. Amore, counsel for Kathleen Cole (“Debtor”), seeks $18,104.75 in supplemental
compensation for services rendered in this case beyond one year from the petition date based upon
the nature and complexity of the issues involved in the case. The Chapter 13 trustee (“Trustee”)
objects to the supplemental compensation on the ground that the case did not present novel legal
issues and the expenses related to the Debtor’s unreasonable legal position regarding projected
disposable income should not be borne by creditors of the bankruptcy estate.
For the reasons stated herein, the court will grant Mr. Amore’s application, in part.
I. BACKGROUND
On April 27, 2010, the Debtor filed for bankruptcy protection under Chapter 13 of the
Bankruptcy Code. The Disclosure of Compensation of Attorney For Debtor (“Disclosure”) 1 filed
by the Debtor reflects that Mr. Amore agreed to accept $4,500.00 for certain legal services:
$1,500.00 paid prepetition and $3,000.00 to be paid through the Debtor’s Chapter 13 plan of
repayment.
On June 24, 2010, the Trustee objected to the Debtor’s proposed plan based on the U.S.
Supreme Court’s decision in Hamilton v. Lanning, --- U.S. ---, 130 S.Ct. 2464 (2010). The Trustee
argued that the Debtor was not devoting all of her disposable income to the repayment of her
1 Official Form B203.
1
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creditors: Although the Debtor’s original Schedules I and J indicated monthly net income of
$1,928.72 based upon the Debtor’s proposed plan to strip a second-position deed of trust
encumbering the Debtor’s residence and to surrender another parcel of real property, the Debtor’s
proposed plan contemplated monthly payments to the Trustee of only $263.00. 	The Trustee’s
disposable income objection was the only impediment to the Debtor obtaining confirmation of her
proposed Chapter 13 plan.2
On March 29, 2012, more than twenty months after the date first set for confirmation in this
case and after several continuances granted to permit protracted negotiations between the Debtor
and Trustee, the court held an evidentiary hearing to determine whether the Debtor was devoting all
her projected disposable income to her proposed Chapter 13 plan. On August 28, 2012, the court
entered an order finding that the she was not. In sustaining the Trustee’s objection, the court found
that the Debtor’s income and expense predictions were consistently unreliable when compared to
her monthly operating reports filed with the Trustee for the same time period. Notably, the court
was persuaded by the Trustee’s argument that the Debtor’s projections were inaccurate partly
because the Debtor twice included her business expenses in deriving her proposed payment —
subtracting the business expenses once in determining the net income from the operation of her
business and again in calculating her projected disposable income. In re Cole, No. 10-925, slip op.
at 4, n.5 (Bankr. N.D.W. Va. Aug. 28, 2012). 	Similarly, the court found that the Debtor’s
calculation of monthly income from the operation of her business was inaccurate because the Debtor
included as monthly business expenses a deduction for amounts drawn on her capital account and
a deduction for her use of a home office. Id. at n.6. Rather than finally determine what the Debtor’s
projected disposable income was — a determination that may have ultimately caused the Debtor to
be unable to perform under a Chapter 13 plan — the court left the amount of projected disposable
income undetermined to allow the Debtor to negotiate with the Trustee and formulate a new
proposed Chapter 13 plan.
The Debtor never filed an amended proposed Chapter 13 plan, but the Debtor and Trustee
2 The Debtor also filed an adversary proceeding to strip the second-position deed of trust
on her property held by Bank of Charles Town. That proceeding was resolved via a consent
order entered December 21, 2010, just under five months after it was filed.
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submitted an agreed confirmation order, which the court entered on November 7, 2012. 	The
confirmation order provides that the Debtor, among other things, will make monthly plan payments
of $1,500.00 for a period of thirty months from confirmation. The confirmation order also approves
Mr. Amore’s compensation of $4,500.00. At the time the court entered its order, the anticipated
distribution to unsecured creditors was thirty-three percent. 3
On November 8, 2012, Mr. Amore filed his application for supplemental compensation for
fees and costs in excess of the retainer agreement he executed with the Debtor. The application was
noticed to the creditor body, and no written objections to the application were filed. Nonetheless,
the court set the matter for hearing to confirm that no creditor objected to the application seeking
$18,104.75 in additional compensation to be paid from the bankruptcy estate — which amounts to
an 11% reduction in the dividend to unsecured creditors. 	Only Mr. Amore and the Trustee
participated in the January 15, 2013 telephonic hearing. At that time, the Trustee objected to Mr.
Amore’s supplemental fee application.
After taking Mr. Amore’s fee application under advisement, the court ordered Mr. Amore
to file with the court the retainer agreement executed by him and the Debtor in relation to his
retention in this case because his Disclosure was not a complete statement of his agreement with the
Debtor for payment for representation in this case. The court subsequently held a telephonic hearing
on April 23, 2013, to address three issues: First, whether Mr. Amore intended to seek reimbursement
for attorney fees from the Debtor for any amounts allowed over and above the fees noted in the
Disclosure but not permitted to be paid from the bankruptcy estate which, if so, would require the
Debtor’s direct participation in the fee determination; second, apparent ambiguities in the retainer
agreement regarding Mr. Amore’s ability to charge at an hourly rate for “basic” services provided by
him beyond the first twelve months after filing; and third, inconsistencies regarding the amount of
compensation to be received pursuant to the agreement compared to what is provided for in the
Disclosure. Importantly, Mr. Amore stated that he would not seek payment from the Debtor if the
court denied in whole or in part his request for compensation from the estate, and otherwise clarified
3 The court entered the proposed confirmation order without notice to interested parties
because the Trustee is the only party that objected to the Debtor’s proposed plan and the terms of
the confirmation order are more favorable to creditors of the bankruptcy estate than the Debtor’s
proposed plan.
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the court’s concerns surrounding his agreement with the Debtor. Upon the conclusion of the hearing,
the court took the matter under advisement.
II. DISCUSSION
Mr. Amore asserts that the court should grant his supplemental application because the
Debtor’s case presented novel and complex issues that made it necessary for him to expend an
unusual amount of time guiding the Debtor’s case to confirmation. The Trustee asserts that the
application should be denied, or at least limited to a supplemental award of $2,160.00, because the
bankruptcy estate’s creditors should not be saddled with the cost of attorney fees incurred through
the Debtor’s pursuit of what the Trustee characterizes as an unreasonable position regarding the
amount of projected disposable income to be devoted to the Debtor’s plan.4
“An entity seeking . . . compensation for services, or reimbursement of necessary expenses,
from the estate shall file with the court an application setting forth a detailed statement of (1) the
services rendered, time expended and expenses incurred, and (2) the amounts requested.” Fed. R.
Bankr. P. 2016(a). Because Chapter 13 cases are form driven and generally require a predictable
amount of work, bankruptcy courts in many districts throughout the United States have simplified
the procedure for approving fees in Chapter 13 cases that do not exceed a certain amount, commonly
known as a “no-look” fee.5
Professionals seeking compensation are not limited to the “no-look” fee. Rather, the “no-
look” fee is only intended to simplify the application process in the large majority of cases in which
4 The Trustee acquiesces to additional compensation of $2,160.00 based upon Mr.
Amore’s work for filing amended schedules and representing the Debtor at the contested
confirmation hearing in this case as reflected in his billing statement.
5 For instance, pursuant to its Standing Order 08-1, the Bankruptcy Court for the Eastern
District of Virginia relieves debtors counsel of their obligation under Rule 2016(a) if they agree
to accept attorney fees of not more than $3,000.00 so long as the total fee and unpaid portion are
clearly set forth in the Chapter 13 plan and the fee is consistent with counsel’s Disclosure.
Similarly, by standing order dated January 3, 2013, the Bankruptcy Court for the Middle District
of North Carolina presumes a base fee of $3,700.00 is reasonable for usual and ordinary services
involved in representing a Chapter 13 debtor. And pursuant to Appendix F to its Local Rules,
the Bankruptcy Court for the District of Maryland permits debtor’s counsel to accept a
presumptively reasonable fee without application or approval; the fee ranges from $2,000.00 to
$4,500.00 for certain services.
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that amount will provide reasonable compensation. If the attorney knows from the inception of the
case that unusual issues are present, the attorney may file a formal fee application; or counsel may
file an application for additional compensation if the need arises for services that were not
reasonably anticipated when the “no-look” fee was requested.
This district does not have a “no-look” fee established by local rule or general order; nor
does the court require formal fee applications under Fed. R. Bankr. P. 2016(a). Rather, the local
practice tolerated by the court and the Trustee is to treat the Disclosure, most often depicting a flat
fee, as counsel’s fee application under Fed. R. Bankr. P. 2016(a). 	Although the court does not
require Chapter 13 counsel to file formal fee applications, its orders confirming Chapter 13 plans
routinely approve the attorney fee disclosed by counsel on the Disclosure, which is to be paid as an
administrative expense of the estate for pre- and post-petition work performed in the case; the formal
requirements of a fee application pursuant to Fed. R. Bankr. P. 2016(a) are therefore deemed
satisfied by the court’s confirmation order. Based upon this local practice, complete and accurate
disclosure in Chapter 13 cases in this district is paramount. See 9 Collier on Bankruptcy ¶ 2016.18
(Alan N. Resnick & Henry J. Sommer eds. 16th ed.) (internal quotation omitted) (“It is only by
review of the 2016(b) statement that the trustee, the court, or any interested party can be apprised
of the debtor’s intentions to pay counsel before such payment occurs, and of any additional services
that counsel intends to perform.”). Additionally, the Disclosure is generally based upon certain legal
services to be provided to a Chapter 13 debtor (i.e., including negotiations with secured creditors;
exemption planning; preparation and filing of reaffirmation agreements; drafting a Chapter 13 plan;
and advocating for confirmation of the debtor’s plan; but excluding, among other things, adversary
proceedings) and not on the amount of time spent providing those services; an attorney accepting
a flat fee does so knowing that the fee represents reasonable compensation for those services he
agrees to provide regardless of the time spent rendering those services.6
6 In seeking supplemental compensation, Mr. Amore conflates the district’s tolerated
flat-fee application process, where counsel’s Disclosure is ultimately approved by virtue of the
court’s confirmation order, with a traditional fee application process reserved to cases wherein
counsel simply bills time at an hourly rate. His fee agreement with the Debtor consists of two
components: a flat fee for the first year of the case and hourly billing for all subsequent work
regardless of whether work performed beyond the one year was of a nature usually encompassed
by a flat fee.
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Before addressing the merits of whether Mr. Amore is entitled to reimbursement of the fees
and expenses he requests in his supplemental application, the court finds it necessary to address its
duty to review applications for compensation. Although Mr. Amore argues that the Trustee’s late
filed objection should not be considered by the court, the court has an independent duty to review
fee applications even in the absence of an objection. In re Wyche, 425 B.R. 779, 792 (Bankr. E.D.
Va. 2010); In re Snyder, 445 B.R. 431, 438 (Bankr. E.D. Pa. 2010) (citing In re Busy Beaver Bldg.
Ctrs. Inc., 19 F.3d 833, 841-45 (3rd Cir. 1994)).
The Court’s responsibility in awarding fees is great, as each creditor individually has
little reason to object to requested compensation due to the costs incidental to the
objection which it would incur when compared to the possible amount of recovery
from the estate. The Office of [the] United States Trustee . . . offers some solace .
. . but the ultimate responsibility lies with the Court.
In re Great Sweats, Inc., 113 B.R. 240, 242 (Bankr. E.D. Va. 1990). This duty is based on the need
to “protect the estate, lest overreaching attorneys or other professionals drain it of wealth which by
right should inure to the benefit of unsecured creditors.” In re Busy Beaver Bldg. Ctrs. Inc., 19 F.3d
at 844. Such a responsibility is heightened in reviewing and awarding fees in Chapter 13 cases. See
In re Grubb, No. 07-30253-KRH, 2010 WL 396181, at *5 (Bankr. E.D. Va. Jan. 25, 2010) (citing
In re Courtois, 222 B.R. 491, 494 (Bankr. D. Md. 1998) (“Such duty to independently review
professional fee applications in Chapter 13 cases becomes a particularly important supervisory
function of the court when neither the debtors nor most creditors have an incentive to object to
attorney’s fees.”)) (internal quotations omitted).
The court finds this type of hybrid agreement — a flat fee coupled with hourly billing
after a certain point in time — to run afoul of the underlying purpose of ultimately approving
counsel’s attorney fees based upon the Disclosure. The court expects counsel practicing before
it to either accept a flat fee for certain disclosed bankruptcy services, regardless of the amount of
time ultimately spent performing those services, or file a traditional fee application based upon
hourly billing. See In re Snyder, 445 B.R. 431, 441 (Bankr. E.D.Pa. 2010) (citation omitted). If
counsel accepts a flat fee, supplemental fees should be sought only when the need arises for
services that were not reasonably anticipated when the flat fee was requested; navigating a
proposed Chapter 13 plan to confirmation over a trustee’s disposable income objection is a
reasonably anticipated service absent unusual circumstances. See In re Grubb, No. 07-30253-
KRH, 2010 WL 396181, at *4 (Bankr. E.D. Va. Jan. 25, 2010) (finding supplemental fee
applications to not be appropriate for expanding the amount of the “no look” fee requested in an
otherwise routine Chapter 13 case).
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Turning to Mr. Amore’s application, the court will award compensation “for representing
the interests of the debtor in connection with the bankruptcy case based on a consideration of the
benefit and necessity of such services to the debtor as well as the other factors set forth in [§ 330 of
the Bankruptcy Code].” 11 U.S.C. § 330(a)(4)(B). The other factors set forth in the statute are:
the nature, the extent, and the value of such services, taking into account all relevant
factors, including—
(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
[title 11];
(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;
(E) with respect to a professional person, whether the person is board
certified or otherwise has demonstrated skill and experience in the bankruptcy field;
and
(F) whether the compensation is reasonable based on the customary
compensation charged by comparably skilled practitioners in cases other than cases
under [title 11].
§ 330(a)(3). In addition to the factors set forth in § 330(a)(3), the U.S. Court of Appeals for the
Fourth Circuit has instructed bankruptcy courts to review fee applications in light of the following
twelve factors (the “Johnson factors”):
(1) the time and labor expended; (2) the novelty and difficulty of the questions
raised; (3) the skill required to properly perform the legal services rendered; (4) the
attorney’s opportunity costs in pressing the instant litigation; (5) the customary fee
for like work; (6) the attorney’s expectations at the outset of the litigation; (7) the
time limitations imposed by the client or circumstances; (8) the amount in
controversy and the results obtained; (9) the experience, reputation and ability of the
attorney; (10) the undesirability of the case within the legal community in which the
suit arose; (11) the nature and length of the professional relationship between the
attorney and client; and (12) attorneys’ fees awards in similar cases.
Harman v. Levin, 772 F.2d 1150, 1151 n.1 (4th Cir. 1985) (citing Barber v. Kimbrell’s Inc., 577
F.2d 216, 226 n.28 (4th Cir. 1978)). 	Because the language in § 330(a)(3) instructs the court to
“tak[e] into account all relevant factors,” the court will consider the Johnson factors in addition to
those articulated under § 330(a)(3). In re Grubb, No. 07-30253-KRH, 2010 WL 396181, at *4
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(Bankr. E.D. Va. Jan. 25, 2010). The applicant has the burden of demonstrating that the fees and
expenses requested are reasonable, In re Goodbar, 456 B.R. 644, 648 (Bankr. W.D. Va. 2011)
(citation omitted), and “[t]he determination of what is a reasonable amount of compensation is
within the sound discretion of the court.” 	Id. (citing In re Breeden, 180 B.R. 802, 808 (Bankr.
N.D.W. Va. 1995)); see Berliner v. Pappalardo (In re Sullivan), 674 F.3d 65 (1st Cir. 2012).
After considering the factors under § 330(a)(3) and the Johnson factors in connection with
the court’s familiarity with the issues, pleadings, and proceedings in the case juxtaposed to Mr.
Amore’s hourly billing statement, the court finds that Mr. Amore has not demonstrated the
reasonableness of the total fee requested in his supplemental application. In that regard, the court’s
analysis centers around the novelty and difficulty of the issues raised by the Debtor’s case, the time
and labor expended regarding those issues, the customary fee for like work, Mr. Amore’s
expectations at the outset of the litigation, and the benefit to the Debtor. The court considered the
other factors, but finds them to be inapplicable in this case. 	Although Mr. Amore has not
demonstrated the reasonableness of the total fee requested, the court finds that some additional
compensation is necessary to fairly compensate him for the reasonable value of his services.
The Debtor’s case did not present novel or difficult issues. The legal issues in this case that
precipitated most of Mr. Amore’s work — the adversary proceeding and the Trustee’s objection to
confirmation of the Debtor’s plan — are substantially similar to most Chapter 13 cases filed in this
district. Factually, the case did present some unique challenges because the Debtor is engaged in
business and thus subject to the provisions of 11 U.S.C. § 1304, and the nature of the Debtor’s
business presented some additional challenges to gathering and documenting relevant information,
as well as developing a proposed Chapter 13 plan of repayment. Based upon the court’s review of
Mr. Amore’s time records submitted in conjunction with his supplemental application, however, the
vast majority of Mr. Amore’s work in this case related to factual, not legal, issues surrounding the
Trustee’s disposable income objection to the Debtor’s proposed plan.
The Debtor’s original proposed Chapter 13 plan contemplated monthly installments of
$263.00 over a period of sixty months. The Trustee, relying on Hamilton v. Lanning, 130 S. Ct.
2464 (2010), objected on the basis that the Debtor was not devoting all of her projected disposable
income to the repayment of her unsecured creditors. 	The Trustee’s objection was the only
impediment that stood between the Debtor and confirmation of a Chapter 13 plan of repayment —
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a common obstacle to Chapter 13 debtors;7 ultimately, the parties agreed that the Debtor would
devote to her plan monthly payments of $1,500.00 for a period of thirty months, plus pre-
confirmation payments of $11,207.72 and a single payment of $11,000.00 to be paid on or before
May 15, 2015.
Notably, the parties’ inability to reach an agreement on projected disposable income largely
was not due to complicated legal issues but was due to the Debtor’s inability to properly account for
her business expenses in projecting her disposable income. The Debtor asserts that the issue raised
by the Trustee’s disposable income objection presented a novel and complicated legal issue in an
evolving legal environment. The Supreme Court decided Hamilton on June 7, 2010, a little over one
month after the Debtor filed her Chapter 13 petition, and largely settled the issues surrounding the
determination of projected disposable income: “[W]hen a bankruptcy court calculates a debtor’s
projected disposable income, the court may account for changes in the debtor’s income or expenses
that are known or virtually certain at the time of confirmation.” Hamilton, 130 S. Ct. at 2478. As
of the petition date in this case, however, the law in this district was such that an above-median-
income debtor’s projected disposable income was determined by Official Form B 22C (the “Means
Test”). Here, the Debtor’s monthly disposable income based upon her Means Test was negative
$79.51 thus justifying her initial proposal to make monthly plan payments of $263.00. Nonetheless,
the court is unpersuaded that this case presented novel or difficult legal issues that warrant the total
amount of compensation being sought here. See Snyder, 445 B.R. at 441 (citation omitted) (“While
it required Counsel to file amended schedules and amended plans, that scenario is not unusual in
Chapter 13 cases. Moreover, it is not at all unusual for a Chapter 13 case to involve motions for
relief from stay, motions to dismiss by the trustee, objections to confirmation and objections to
claims.”).
In this case, the court’s analysis regarding the novelty and difficulty of the issues presented
7 The Debtor also filed an adversary proceeding against Bank of Charles Town to strip a
second-position deed of trust encumbering the Debtor’s property; that proceeding was resolved
by consent less than five months after it was filed. Although attorney fees incurred prosecuting
the adversary proceeding were excluded from the Mr. Amore’s Disclosure, the $4,500.00
disclosed by Mr. Amore included a $1,000.00 flat fee for the proceeding to be paid through the
Debtor’s plan.
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dovetails with its analysis of the amount of time and labor expended by Mr. Amore. The Debtor’s
shortcomings in properly accounting for her business expenses when projecting disposable income
caused Mr. Amore to spend an inordinate amount of time on her behalf given the facts of this case.
Although the Trustee and the court do not dispute that Mr. Amore actually spent the time for which
he seeks compensation, the total amount of supplemental compensation sought by Mr. Amore is not
reasonable because the majority of services he performed were not due to the complexity of the
Debtor’s case but were performed in gathering information and communicating with the Debtor and
the Trustee in an attempt to negotiate a resolution of the Trustee’s objection to the Debtor’s
proposed plan. Specifically, the Debtor’s multiple amended Schedules I and J; most, if not all of
the dozens of spreadsheets prepared and analyzed; and multiple income and expense statements were
formulated, analyzed, and provided in negotiations with the Trustee for the purpose of showing an
impending decline in projected disposable income — a showing the Debtor was ultimately unable
to make.
Although the court is satisfied with the general nature of Mr. Amore’s services as reflected
by his billing statement’s various “project categories” — categories of service the court typically
expects to see rendered to a debtor in a similar case — the amount of time and labor expended
providing those services is not reasonable based upon the lack of complexity in this case.
Additionally, many entries lack clarity, making it impossible to discern the nature, necessity, and
relevance of the service being rendered and whether it constitutes work for which compensation is
reasonable. 	For example, page two of Mr. Amore’s billing statement includes entries in the
“Reporting/Accounting/Sch.” category with the following statements for the description of work
performed: “long term care.pdf Insurance,” “2011 home office.xlsx,” and “life insurance.pdf.” Page
five contains similar entries in the “Financing/Cash Collections” category, describing work such as
“united bank 8269 8.1.11 to 12.27.11.pdf.” Because Mr. Amore’s billing statement is replete with
such entries the court is left simply guessing what work Mr. Amore may be performing, and a
mathematically rigorous adjustment to the supplemental application is not possible. 	See In re
Robinson, 368 B.R. 492, 501 (Bankr. E.D. Va. 2007) (finding sixty percent of counsel’s fee request
to be reasonable); In re Graham, No. 12-11152-JMD, 2013 WL 587305, at *3 (Bankr. D.N.H. Feb,
14, 2013) (citing Lopez v. Consejo De Titulares Del Condominio Carolina Ct. Apts., 405 B.R. 24,
30-31 (B.A.P. 1st Cir. 2009) (noting that the court need not follow a “rigid prescription” in reducing
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an overall fee award)).
Regarding the customary fee charged for similar work, the court finds Mr. Amore’s base fee
for bankruptcy services to be within the range generally charged in similar cases. As noted above,
although the Debtor is engaged in business, the activity in this case was substantially similar to most
Chapter 13 cases in this district. 	The Disclosure reflected a fee of $4,500.00, which the court
observes is at the upper end of what counsel receives for the majority of Chapter 13 cases filed in
this district; the customary fee charged for Chapter 13 cases in this district, particularly in the
Martinsburg division, is generally between $2,500.00 and $4,500. Here, however, the $4,500.00
included a flat fee of $1,000.00 for the prosecution of an adversary proceeding against Bank of
Charles Town, leaving $3,500.00 to compensate Mr. Amore for services to be rendered in
conjunction with the bankruptcy case. Although this case is substantially similar to most Chapter
13 cases filed in this district, Mr. Amore should receive some additional compensation because the
case did come with the need for additional work and services given that the Debtor is engaged in
business and the law in this district regarding projected disposable income changed shortly after the
Debtor filed for bankruptcy relief.
As for Mr. Amore’s expectations at the outset of this case, he asserts that this was a difficult
case from its inception due to the Debtor’s ownership of multiple parcels of real property, income
and cash flow issues, and the Debtor being a high-income debtor with multiple sources of income
and varying business expenses. 	Thus it appears that Mr. Amore knew this case might require
additional time and effort. In the bankruptcy context, particularly regarding a Chapter 13 case where
counsel accepted a flat fee, this factor weighs against a supplemental award of attorney fees. Given
the added difficulty of this case recognized from the beginning, Mr. Amore should have either
accepted a larger flat fee for his bankruptcy services or entered into a fee arrangement whereby he
would bill his time on an hourly basis and file a traditional fee application, to be adjudged by the
court for reasonableness under § 330(a)(3), rather than entering into a hybrid agreement with the
Debtor and disclosing only one element thereof to the court and interested parties. 8
8 Mr. Amore’s Disclosure in this case was inadequate as it was merely a partial
disclosure; it only disclosed the amount of compensation Mr. Amore agreed to accept for
representing the Debtor during the first year of the case, but his agreement with the Debtor also
included provisions for him to bill at an hourly rate for work performed beyond the first year.
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Finally, considering Mr. Amore’s overall benefit to the Debtor in light of its foregoing
analysis, the court finds additional compensation in a reduced amount is appropriate. Here, the
Debtor originally proposed monthly plan payments of $263.00 for 60 months for a total base of
$15,780.00. 	The Trustee, through her objection to the Debtor’s proposed plan, advocated for
monthly payments for 60 months at or near $1,928.72 for a total base of $115,723.20. Ultimately,
Mr. Amore was able to negotiate a reduction in the total base to $67,207.72 — just over a forty
percent reduction in the base initially advocated for by the Trustee. 	Therefore, the court will
consider the significant benefit to the Debtor along with its analysis of the other factors considered
in awarding Mr. Amore supplemental compensation.
III. CONCLUSION
Because the majority of the activity in this case stemmed from the Trustee’s objection to the
Debtor’s proposed plan, a matter routinely encountered in Chapter 13 cases in this district, the court
cannot approve Mr. Amore’s supplemental application for $18,104.75 in additional attorney fees
— six times the amount disclosed as compensation in this case. 	See Snyder, 445 B.R. at 441
(finding an award of fees nearly three times the flat fee disclosed by counsel to be neither reasonable
nor acceptable where the services rendered to the debtor were included in the flat fee based on
counsel’s Disclosure). The court, nonetheless, recognizes that the $3,500.00 flat fee Mr. Amore
agreed to receive for representing the Debtor in her bankruptcy case does not adequately compensate
him for the services he rendered in the case given the reasonable and necessary requirements of the
case and the benefit he conferred upon the Debtor. The court finds, based upon its analysis herein,
that a forty percent reduction in Mr. Amore’s requested compensation fairly compensates Mr.
Neither the Trustee nor the court were aware of the structure of Mr. Amore’s fee arrangement until
he filed his current application.
Fee disclosure under § 329 and the bankruptcy rules is mandatory, and counsel’s failure
to fully and accurately disclose his fee arrangement with the debtor subjects counsel to sanctions
including a total denial of compensation or total disgorgement of fees already paid. In re
Kowalski, 402 B.R. 843, 848 (Bankr. N.D.Ill. 2009) (citation omitted). The extent to which
counsel is sanctioned rests in the court’s sound discretion. Id.
Here, the court will not sanction Mr. Amore for his inadequate Disclosure because it was
not raised by the Trustee’s objection to Mr. Amore’s request for supplemental compensation.
Believing that complete and accurate disclosure is paramount, however, the court admonishes
Mr. Amore for his failure to fully comply with his disclosure requirements.
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Amore for the reasonable value of his services rendered in this case given the issues presented
thereby. The court will thus award Mr. Amore $10,862.85 in supplemental compensation.9
9 To the extent that the inclusion of Mr. Amore’s supplemental award of $10,862.85 to
be paid under the Debtor’s confirmed Chapter 13 plan causes a reduction in the distribution to
unsecured creditors in this case, the court finds that the confirmed plan can be modified without
additional notice to unsecured creditors given the fact that the supplemental award is less than
requested by Mr. Amore to which the unsecured creditors did not object after notice and a
hearing.
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No. 3:10-bk-00925 Doc 141 Filed 09/30/13 Entered 09/30/13 11:52:40 Page 13 of
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