Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-87-02073/USCOURTS-ca10-87-02073-0/pdf.json

Nature of Suit Code: 422
Nature of Suit: Bankruptcy Appeals Rule 28 USC 158
Cause of Action: 

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I 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

HAROLD EUGENE REYNOLDS, SR., ) 

BETTY JEAN REYNOLDS, and ) 

MICHAEL A. TAYLOR, ) 

FILED 

United Stat.es Court of Appeals Tenth Circllit 

APR 131989 

ROBERT L. HOECKER 

Clerk 

) 

Appellants, ) 

) 

No. 87-2073 

(D.C. No. 86-661-C) 

(E.D. Okla.) 

V • ) 

) 

SIDNEY K. SWINSON, Trustee, ) 

) 

Appellee. ) 

ORDER AND JUDGMENT* 

Before HOLLOWAY, Chief Judge, SETH and SEYMOUR, Circuit Judges. 

The debtors, Harold and Betty Reynolds, appeal from the Order 

of the United States District Court for the Eastern District of 

Oklahoma, which affirmed in all respects the decision of the 

bankruptcy court. The bankruptcy court, citing 11 u.s.c. 

§ 329(b), ordered counsel for the debtors to return $8,200 of a 

$10,000 attorney fee to the bankruptcy estate. The case was 

submitted without oral argument by order of the court. 

*This order and judgment has no precedential value and shall not 

be cited, or used by any court within the Tenth Circuit, except 

for purposes of establishing the doctrines of the law of the case, 

res judicata, or collateral estoppel. 10th Cir. R. 36.3. 

Appellate Case: 87-2073 Document: 010110035118 Date Filed: 04/13/1989 Page: 1 
.. 

I' On appeal, the debtors first argue that S 329(b) was 

incorrectly applied in this case because the $10,000 fee was not 

paid out of the funds of the debtor but instead was paid by an 

independent third party, Key Energy, Inc. Debtors correctly point 

out that in order for S 329(b) to apply, the fee must have been 

paid out of funds that, but for the payment, "would have been 

property of the estate." 11 u.s.c. S 329(b)(l)(A). 

In reaching its decision, the bankruptcy court received into 

evidence the Statement of Attorneys Compensation filed by debtors 

as required by 11 u.s.c. S 329(a) and Bankruptcy Rule 2016(b). 

This statement bore the signature of counsel and revealed that the 

source of the $10,000 payment was "Debtors' funds on hand." 

Similarly, in a Statement of Affairs of the Debtors, which 

requests information on fees paid to attorneys within the 

preceding twelve months, the reader is simply referred to the 

S 329(a) statement. The debtors later filed a statement claiming 

the entire $10,000 fee was paid by Key Energy, Inc., a business 

allegedly owned by the debtors' daughter. 

The issue as to the source of the funds paid to debtors' 

counsel was not the subject of findings by either the bankruptcy 

court or the district court. "Findings may be sufficient if they 

permit a clear understanding of the basis of decision of the trial 

court, irrespective of their mere form or arrangement." 

Featherstone v. Barash, 345 F.2d 246, 250 (10th Cir.). See also 

Mesa Petroleum Co. v. Cities Service Co., 715 F.2d 1425, 1433-34 

(10th Cir.), where we held in substance that the absence of 

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Appellate Case: 87-2073 Document: 010110035118 Date Filed: 04/13/1989 Page: 2 
specific findings of fact is harmless error where there is no 

possibility of confusion as to the basis for the judgment appealed 

from. 

Here, there is no possibility of confusion as to the basis 

for the judgment below. The bankruptcy court acknowledged the 

conflicting evidence as to the source of the funds and resolved 

the factual dispute over the source of the fee paid to the 

debtors' attorney by concluding that the fee was paid out of the 

funds of the debtor. This conclusion was supported by the 

evidence. 

The debtors also argu~ that the bankruptcy court and the 

district court applied the wrong legal standards in deciding that 

the amount of compensation paid to the debtors' attorney was 

unreasonably excessive. We disagree. Both courts relied on In re 

Wilson Foods Corp., 36 B.R. 317 (Bankr. W.D. Okla.), in 

interpreting the "reasonableness" determination mandated by 

S 329(b). Wilson Foods notes that "any professional person who 

intends to seek compensation [from a debtor] must keep meticulous, 

contemporaneous time records and such records must reveal 

sufficient data which allow the Court to make an informed judgment 

regarding the specific task and hours allotted." Id. at 320 

(applying the guidelines set out in Ramos v. Lamm, 713 F.2d 546 

(10th Cir.), to attorney fee disputes arising in bankruptcy 

proceedings). Both the bankruptcy court and the district court 

applied the prevailing legal standards to the facts of this case. 

The reference by the bankruptcy court to 11 u.s.c. § 330(a)(l) is 

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Appellate Case: 87-2073 Document: 010110035118 Date Filed: 04/13/1989 Page: 3 
I 

of no consequence when the determinations of both courts are 

considered . 

The judgment of the district court is AFFIRMED. 

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Entered for the Court 

Oliver Seth 

Circuit Judge 

Appellate Case: 87-2073 Document: 010110035118 Date Filed: 04/13/1989 Page: 4