granted twenty six thousand dollars of the hundred ninety eight thousand five hundred six dollars of attorney's fees that law firm applied for by law firms five o three b application which is application to have the bankruptcy state in this case the waxwork corporation case bankruptcy case pay the law firms attorneys fees and costs due to the law firm's work giving a substantial benefit to the corporate bankruptcy state there one hundred seventy two thousand five zero six of the attorneys fees were cut everybody here agrees that the standard of review is abuse of discretion but abuse of discretion as a matter of law occurs if there are errors of law there are law was the complete failure of the bankruptcy court and back to base the award of attorney's fees on the two point six million dollar benefit that the law firms work conferred on the wax for a corporation fact the us supreme court says the result is what matters and that a plaintiff here the bankruptcy law firm obtain accident results the attorney should risk cover it fully compensatory fee normally this will encompass section five three which specifically allows for actual and necessary costs for preserving the estate that's the language of five k so yes so do you dispute that the bankruptcy court may still assess the reasonable nuss of the fees requested or strike those fees for work the court found to be excessive or unnecessary factor is the result obtained here the bankruptcy court ignored didn't even mention in its decision the two point six million dollars benefit in the bath said well the law firm claimed there was this benefit but it doesn't acknowledge it in fact the individual case which was only by the individual case not a by the corporate case and pay a one point six million dollars compromise exemption to individual wacks for an exemption can only be claimed in an individual six million dollars would have left the corporate estate fourteen days after order got to stay and got that reverse the subsidy consolidation reversed by the bout that saved two point six million dollars the fee requested was only seven point eight percent of two point six million dollars the fia warded twenty six thousand dollars was one percent of the two point six million dollars preserved like that family before me i think i could almost sit down here because there is of it was that the consolidation question have to do with the fee request basically and was not really for the benefit of the  and that it was you know sense a self serving move rather than a preservation of capital move what is your first well do you agree or disagree with my reading of what was what was happening and what's wrong with that analysis but the bank of the court found substantial benefit at the bat found that there was a substantial benefit that neither one acknowledged that it was a two point six million dollars substantial benefit but they put five or three b b choir is a substantial benefit and they both found a substantial benefit that wasn't specifically my question that the issue of consolidation which is what resulted in what you're describing here host the two point six million dollars resulted from the consolidation yes and that and i guess i have the the impression from what from what i've read here that the bankruptcy court and the baptists the view that the consolidation was really basically an effort to firm's work the case would have been the corporate case would have become administratively insolvent my firm would not have been paid nor with the other chapter eleven case administrative claimants or any of the general unsecured creditors was for the purpose of giving more fees then it seems to me a reason not to rely on the two point six million dollars if it was not also or separately or independently beneficial to the bankruptcy process i'm not making my question very clear let me do what i can with that my phone was at about thirty seven thousand dollars in fees the rest of that two point six million went to other claimants in the corporation case so the benefit to my firm was tiny the benefit of almost the whole two point six million was available for other claimants and i can can you try again because i'm having trouble understanding your honest whereas my question isn't whether you are entitled to fees at all my question is is whether the bankruptcy court can be skeptical of the amount that's being sought because the primary benefit was to your firm to to get fees that the whole process was for that purpose now doesn't preclude fees we've got close to thirty thousand dollars in fees and that's not my question the standard under five and three b is substantial benefit to the bankruptcy estate the benefit to the corporation bankruptcy estate was the two point six million was kept from leaving the estate to pay things the state didn't  everybody else's phase everybody else's claim from being made in ministry of insolvent and not paid in five a three b and cellular one i want to put them together it's the standard is benefit to the state not how much individually my front was was getting at this benefit to the state was two point six million and under five or three b the law firm is entitled to the feet for that benefit and the number the number one thing is the amount of the benefit the result now since i have little time as far as me ask because i find trying to find here in the what the bankruptcy court did and it seems like the bankruptcy court determined seemed to have noted that the bankruptcy law firm opposed the consolidation motion solely based on its own interest in recouping the unpaid thirty six thousand four hundred seventy six in attorney's fees it was owed from the corporate stink it seems like according to the bankruptcy court your motive was evident because b l f expressly invited the trustee in their original opposition to the substance motion still help to preserve the corporate state and therefore can burn a benefit on the corporate creditors so the court determined you were entitled to use court didn't recognize it as a two point six million benefit that that declaration from the trust to the trustees objection and so we have a person trying to take the two point six million dollars in breach of his fiduciary duty to the corporate a state and creditors trying to take the two point six million and then is objecting to  sixty six that the law firm fet spent doing the five a three b application and zero for defending against the trustees objection that was thirty thirty thousand and so that's forty seven thousand for sixty six together the  risk multiplier must apply a risk multiplier to the lodestar when the attorneys take the case with the expectation the receiver risk enhanced meant their hourly rate does not reflect the risk and there is evidence case is risky the four thank you and good morning honest i'm howard cam high of urban conan jessop and i represent the appellee al siegel chapter seven trustee i'm trying to avoid the desire to make this overly simplistic which is in the bankruptcy setting especially of course the judge has the overriding need to apply a reasonable in a standard to any fee request the appellant has cited five o three and kind of over the distinction between the separate parts of five o three make no mistake the record is clear that this is an application brought under five zero three b one not under five zero three before which refers to five o b three b three the reason why that is important and again under this umbrella of remaining reasonableness fees five zero three before if any subsection is the fee shifting portion a five zero three b it specifically refers to certain conduct that is award a bill under five o three b free which deals with petitioning creditors in voluntary case it deals with substantial contribution but only in a chapter nine or chapter eleven not in this chapter seven case so the five zero three before fee shift provision if that is going to be interpreted as such does not apply to the five zero three b one application filed by the app that's one that's why cases such as wind and wave cases stretches stetson which i will take a moment to address because it came out in the appeal of the appellate reply stetson was a class action so undisputed then in class actions there is clearly a fee shifting provision that applied to the case judge many ryall of the central district of california significantly cut the fees of the requesting party but judge reale did not provide the benefit of any justification or reason in that case why the fees were cut the case was sent back saying we needed justification why these fees were cut contrast that case to this case where judge bleep on took twenty pages of a memorandum of findings that said for example kmart's the probably the primary attorney for the  is not worth eight hundred dollars an hour that wasn't just something that was pulled out of the air judge a blue bond specifically put in judge march's propensity to make frivolous arguments and we believe that the argument  should be the primary consideration for the bankruptcy court there's two responses to that your honor one is that that argument as the bap recognize is brought up for the first time on appeal in sampson versus w capital case says that that's not about the common fund theory was brought up for the first time on appeal and the back record to the back on a on appeal to the bapi i right that was not preserved in the bankruptcy court i'm unaware of any portion of the record where that was established your honor but but also importantly to say that two point six million dollars was added to the estate is a little bit of a mischaracterization of the record that the cases are ongoing what appellant was able to do was to prevent substantive consolidation keeping the two estate separate that doesn't mean that there may not be some type of compromise or consolidation in the future so judge bluebonnet recognize that when she wrote that an unintended benefit was conveyed upon the estate the real benefit here which was clear by opponents own comments and appreciated by the back and judge who bond is i'm appealing us and i'm opposing this because i have outstanding fees of thirty thousand dollars and i need to get paid that's the appellant's own language so to address the question that you're on a raise with respect to baker and botts the baker inbox is a three thirty case which applies to professionals that are employed by the a state this is a five o three b one application window in wave does have a language saying that the standards four five zero three b and four three thirty the section at issue in baker and botts were not only introduced at the same time they were intended to be substantially similar it's separate cetera so that those are not directly but in fr honor we believe the baker and botts applies is remembering that this is not a five o three before type of the fee shift this is an application saying i did something good for in a state and i should get paid under five o three b like this to be compensated for protecting their fees which is indisputably what happened here that rationale does apply except as i understand it that even under baker and bonds they would be entitled to their fees for preparing the fee application as distinct from the litigation portion is that correct they can box does allow that because and that was not done here so that there was an error here your honor if if there was an error first of all there is a specific statutory already anticipated that question and had listed what she has found to be the reasonable value of that effort and the reasonable value of that effort is ten hours at the four hundred dollars an hour for a four thousand dollar fee it did seem to me that it was and then usually in the context of this case and the lawyers that worked on this case it seems like a rather low or early rate when sure a couple of responses your honor the hourly rate first of all specifically the bat found was not just a roll back to the fees of two thousand and six judge blue bonds specifically evaluated the performance of a lawyer in her bankruptcy community and said this is a lawyer who argues inappropriately at the podium that advances at times frivolous arguments like in this case the reading argument  that uses briefs that shouts and is in is unclear and shouts at the reader so there are specific reasons why judge bluebonnet or rove arrived at four hundred dollars an hour and to say that well we look at somebody who has no question in a steamed educational background who was a member of the bench before she was not asked to return and say how could that only be worth four hundred dollars an hour never mind this panel that judge reasons why ms march's personal efforts were not worth anything but four hundred dollars an hour was that a number pulled out of the air or was it the the process of a thoughtful evaluation the bankruptcy courts always have to do and it's our position that whether or not it's an agreeable number that that is not such an arbitrary and capricious number that it needs to be overruled i don't think he did any evidence of the prevailing hourly rates in the community your honor we cited in our briefs i'm not sure whether or not the judge used her own familiarity but we did in our opposition cite practitioners from the community and their hourly rates and in fact if the court could look to the transcript of our hearing which was the at pelleas excerpts of record starting at page one through sixty seven judge bluebonnet specifically addresses miss march and says listen you are no ex practitioner you are no wife practitioner those are the types of people who came from a bankruptcy background who had a mentor that allowed them to understand what bankruptcy arguments are about you don't have any of those so judge bluebonnet obviously understood the distinction between somebody who was obviously an educated and intelligent woman versus somebody who has the bankruptcy savvy to be a wise man proceed lawyer and judge believe on in her discretion  that's worth four hundred dollars an hour just blew by knows the community she's tasked with finding out and understanding what the reasonable values are she sat on this case and still sits on this case eight years later at the time so she has  personal experience with the with the efforts expended by the bankruptcy law firm but again your honour's we are well before i get to the again let me just address the the the reading argument the fundamental fairness because that was in the papers it's our position that reading which awarded a post petition administrative expense claim to certain tort claimants does not apply reading mean the bankruptcy court one of which was affirmed on appeal the cases cited by the bankruptcy law firm deal with things like intentional withholding of taxes intentional zone violations things that are intentional conduct by the trustee a judge blue bond correctly noted that if i was going to award fees for every trustee motion that i approve that gets overturned on appeal first of all that would turn the bankruptcy system on its head the excuse me the american rule on its head by awarding fees in that in that perspective and second of all it would make functioning as a trustee untenable so we argue that reading has no application here and in fact if this court evaluates reading in the argument put forth by a it may be determined that those are the types of chua's i frivolous arguments that create the reduction in fees in the first instance so i would conclude with the concept for this court that especially in the bankruptcy system there is always always a necessity for a bankruptcy judge to superimpose a reasonable in this component to a few request here a five o three b one request was made it's not a feast shifting statute judge bluebonnet found that even though that may not alternately be the case at the end of the wax for cases that appellant conferred a benefit to the estate by getting the consolidation overturned it's her obligation knowing the community knowing the practitioners and their value for the judge to superimpose that this was not a whimsical situation like in the judge this is the product of twenty pages of specific findings specific findings that attorney time was spent on secretarial products projects such as compiling exhibits and downloading documents at at eight hundred dollars an hour and the judge in her discretion found that this is the value of of of the work by appellant whether or not this court would agree in a reached the same conclusion her findings are not an abuse of discretion and must be affirmed by this court thank you counsel any other questions your honor i don't believe so i thank you for your time this march even though you used all your time you may have one minute for thank you very much  law firms work was good enough to win to keep the two point six million dollars of corporate estate money from being misspent taken by the trustee in a spent to pay two point six million dollars the things that the corporation case did not  that is an extremely good result that entitle law firm to all the fees requested and that is the most important factor here and there was no explanation as to why that didn't entitle law firm to the fee there was no declaration to the trustees objection so there was no evidence there was eight hundred ninety six hours dollars of work that could be classified as secretarial that's in the reply so you can take that off but actually  defending against the trustees objection is wind and wave like says and sunbelt and asarco was not a fee shifting case and it does not preclude the fee here does not overrule wind