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Daniel E. Garrison, AZ Bar 021495 

Protego Law, PLLC 

1805 N. Scottsdale Rd., Ste. 100 

Tempe, AZ 85281 

Tel: (480) 504-6840 

dan@protegolaw.com 

Proposed admittee pro hac vice

UNITED STATES BANKRUPTCY COURT 

EASTERN DISTRICT OF VIRGINIA 

RICHMOND DIVISION 

In re: 

STEWART, Breandra Nicole, 

 Debtor. 

)

) 

) 

) 

) 

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 Case No. 19-35482-KLP 

 Chapter 7 

 Hearing Scheduled for 11:00am 

 February 5, 2020 

RESPONSE AND OBJECTION TO MOTION 

(1) TO COMPEL COOPERATION WITH TRUSTEE AND TURNOVER OF 

INFORMATION AND (2) FOR AN ORDER TO SHOW CAUSE 

Throop Law, P.C., and Matthew S. Throop, Esq. (“Throop”), counsel to the debtor, 

Breandra Stewart (“Debtor”) in the above-referenced chapter 7 case, by and through undersigned 

counsel (proposed to be admitted pro hac vice), hereby responds and objects to the “Notice and 

Motion (1) to Compel Cooperation with Trustee and Turnover of Information and (2) for an Order 

to Show Cause” (the “Motion”) filed at docket no. 28 by Chapter 7 Trustee Jennifer J. West 

(“Trustee”). 

I. INTRODUCTION

Trustee’s Motion seeks both an order compelling Throop’s “cooperation” and “turnover” 

of certain information and documents, and an order requiring Throop to show cause why he should 

not be sanctioned for his failure to satisfy the Trustee’s demands. Neither of the Trustee’s demands 

are consistent with her legal rights, or Throop’s (or the debtor’s) legal obligations. Both aspects 

of the Motion should, therefore, be denied. 

II. FACTS 

1. Debtor entered into a bifurcated chapter 7 engagement with Throop, as disclosed in 

detail in Throop’s Form B2030/Rule 2016(b) disclosure (“Fee Disclosure”) found at page 33-34 

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of Debtor’s Schedules and Statements (docket no. 13). A copy of the Fee Disclosure is attached 

hereto as Exhibit “A”. 

2. Under this bifurcated engagement structure, Debtor engaged Throop to file her case 

pursuant to a pre-petition agreement, for which Throop waived his pre-petition fee, and then 

separately engaged Throop to complete her chapter 7 case under a post-petition agreement. This 

allowed Debtor to pay her post-petition attorney fee in installments for up to 12 months after her 

case was filed, from post-petition earnings or other non-estate assets. See Fee Disclosure, ¶¶ 1, 7. 

3. Under this bifurcated engagement structure, Throop completed his required 

diligence before filing the case, but deferred actual preparation of Debtor’s schedules and 

statements until after the case was filed. Consequently, Throop and Debtor had to determine 

Debtor’s petition-date bank balance many days after the actual petition date. 

4. Debtor’s bank does not provide a running daily balance in its online presentation 

of account history. Accordingly, when Debtor met with Throop after the case was filed, Throop 

had Debtor take a “screen shot” of her online banking balance on the day that the schedules and 

statements were being prepared, as well as screen shots of her account activity going back to the 

petition date. He then added and subtracted, respectively, the deposits and other debit or 

withdrawal activity from the date that the balance was available back to the petition date, in order 

to determine the petition-date balance in the bank account. He did not prepare a spreadsheet or 

other formal accounting of this process; rather, he simply used a calculator to determine the 

petition-date balance. 

5. On January 23, 2020, after a telephone conference and email exchanges between 

Throop’s counsel and the Trustee, Throop provided copies of the screen shots referred to above, 

and a written explanation of how he determined the balance. The Trustee subsequently 

communicated that what was provided was not satisfactory because it still required her to “do the 

math.” 

6. Separately, and prior to this disclosure, Throop’s counsel also directed the Trustee’s 

attention to the Fee Disclosure, which she apparently had not previously seen, to corroborate the 

fact that Debtor’s engagement of Throop was bifurcated as represented. 

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III. LEGAL ARGUMENT

A. Trustee Has No Estate Interest in a Post-Petition Fee and Therefore Is Not Entitled to 

Debtor’s Engagement Agreements with Throop. 

In a bifurcated chapter 7 engagement where counsel has waived his pre-petition fee, the 

Trustee simply has no legal interest to justify compulsory production of counsel’s engagement 

agreements. In a more traditional, prepaid chapter 7 engagement, chapter 7 trustees reasonably can 

require production of information about the engagement because any overcharge or technical 

defect in the engagement presumably can generate a recovery for creditors. Where the attorney is 

paid prior to the bankruptcy being filed, debtors presumably use funds that otherwise would be 

property of the estate. 

Bifurcated chapter 7 engagements where attorneys offer “zero-down” terms and allow 

post-petition installment payments of post-petition attorney fees do not implicate these same 

concerns. While counsel is still subject to §329 reasonability challenges from the Court or the 

United States Trustee, a panel chapter 7 trustee has no “dog in the fight,” because any potential 

disgorgement or disallowance does not inure to the benefit of the estate. Consequently, the terms 

of such a bifurcated engagement are not part of the chapter 7 trustee’s charge “to collect and reduce 

to money the property of the estate.” 11 U.S.C. § 704(a)(1). “The primary role of a chapter 7 trustee 

in an asset case is to liquidate the debtor’s non-exempt assets in a manner that maximizes the return 

to the debtor’s unsecured creditors.” “Chapter 7 – Bankruptcy Basics,” United States Courts, 

Services & Forms, Bankruptcy, https://www.uscourts.gov/services-forms/bankruptcy/bankruptcybasics/chapter-7-bankruptcy-basics. 

Rule 2017 corroborates this conclusion. Its provisions are divided into two, temporal 

periods: “Payment or Transfer to Attorney Before Order for Relief,” see Fed. R. Bankr. P. 2017(a) 

(emphasis added), and “Payment or Transfer to Attorney After Order for Relief,” id., R. 2017(b) 

(emphasis added). Concerning pre-petition payments to attorney, the Rule allows “any party in 

interest” to file a motion to “determine whether any payment of money . . . by the debtor . . . to an 

attorney for services rendered or to be rendered is excessive.” Id., R. 2017(a). The Advisory 

Committee comments concerning the 1991 amendments to the rule support this reading by noting 

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that “[a]ny party in interest should be able to make a motion . . . because the funds or property 

transferred may be property of the estate.” 

In sharp contrast, Rule 2017(b), which deals with post-petition payments, allows only “the 

debtor, the United States Trustee” or the court on its “own initiative” to challenge a fee as 

excessive. Id. R. 2017(b). The chapter 7 trustee simply is not allowed to challenge a post-petition 

fee. 

Because there is no legitimate estate interest implicated by the bifurcated engagement, 

there is no reason for the Trustee to be entitled to a compelled production of Throop’s engagement 

agreements with Debtor. Indeed, the Trustee has not—and in fact cannot—produce any authority 

for the proposition that production of the fee agreements in this case is legally required. Although 

the Rules of Civil Procedure and Evidence are not directly implicated in this matter, it is instructive 

to note that the standard for discovery is that the sought production “is relevant to any party’s claim 

or defense,” Fed. R. Civ. P. 26(b)(2), and relevance is defined as the “tendency to make a fact 

more or less probable than it would be without the evidence,” Fed. R. Evid. 401(a), and “of 

consequence in determining the action,” Id. R. 401(b). The Trustee’s only proffered purpose in 

seeking the fee agreements is “because the arrangement is unusual in that it is a post-petition 

arrangement which calls for a fee that is substantially higher than the typical pre-petition fee 

arrangement.” Motion, ¶ 6 at 3. But a recovery or reduction of any portion of the fee would not 

benefit the estate, and the Trustee is not authorized to bring that challenge anyway. The Trustee’s 

requested production therefore does not seek relevant evidence, and her request for an order 

compelling production must be denied. 

B. Throop Has Produced to the Trustee Everything that Reasonably Can Be Required 

Concerning Debtor’s Petition-Date Bank Balance. 

Throop has both explained to the Trustee how he and Debtor determined the petition-date 

bank balance, and provided the source documentation to the Trustee. He is not legally obligated 

to create (and the Trustee is not legally entitled to demand) a summary of how the conclusion was 

reached. Indeed, the Trustee has provided no legal authority for her position that Throop is 

obligated to create a spreadsheet or similar summary of the calculation that was made of the 

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petition-date bank balance. Her citation to Rule 4002(a)(4) is—at best—incomplete and—at 

worst—misleading. While Throop concedes that the Debtor (and, by representation, Throop 

himself) has a duty to “cooperate with the trustee in the preparation of an inventory, the 

examination of proofs of claim, and the administration of the estate,” Fed. R. Bankr. P. 4002(a)(4), 

Rule 4002 is much more specific in terms of required documentation, and even addresses 

specifically the topic of bank statements: 

(b) Individual Debtor’s Duty to Provide Documentation 

 . . . . 

 (2) Financial Information. Every debtor shall bring to the 

meeting of creditors under § 341, and make available to the trustee, the 

following documents or copies of them, or provide a written statement that 

the documentation does not exist or is not in the debtor’s possession: 

 . . . . 

 (B) . . . statements for each of the debtor’s depository 

and investment accounts, including checking, savings and money 

market accounts, mutual funds and brokerage accounts for the time 

period that includes the date of the filing of the petition . . . . 

Fed. R. Bankr. P. 4002(b). Thus, Debtor’s (and Throop’s) only obligation is to provide the Trustee 

with copies of the account statements themselves, which has occurred. There is no obligation to 

create a separate compilation, summary or accounting. The fact that other attorneys may capitulate 

to the Trustee’s demands in this respect does not equate to those demands having any legally 

enforceable effect. 

IV. CONCLUSION 

The Trustee has no legal right to demand either the production of the fee agreements 

between Throop and Debtor, or the preparation of a compilation, summary or accounting of how 

the Debtor’s petition-date bank balance was determined. Throop and the Debtor have fulfilled 

their legal obligations and the Trustee’s Motion should be denied. 

 

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RESPECTFULLY SUBMITTED this 29th day of January, 2020, 

/s/ Matthew S. Throop 

Matthew S. Throop #87094 

Throop Law. P.C. 

530 E. Main Street, Ste. 1020 

Richmond, VA 23219 

Tel: (804) 299-5222 

Fax: (804) 299-5202 

matthew@throoplaw.com

/s/ Daniel E. Garrison 

Daniel E. Garrison, AZ Bar 021495 

Proposed admittee pro hac vice

Protego Law, PLLC 

1805 N. Scottsdale Rd., Ste. 100 

Tempe, AZ 85281 

Tel: (480) 504-6840 

dan@protegolaw.com

CERTIFICATE OF SERVICE

This is to certify, under penalty of perjury, that on January 29, 2020, the foregoing was 

emailed to: 

Jennifer J. West, Esq. 

Spotts Fain PC 

411 East Franklin St., Ste. 600 

Richmond, VA 23219 

jwest@spottsfain.com 

Kenneth N. Whitehurst, III 

Assistant United States Trustee 

Office of the United States Trustee 

Norfolk Federal Building, Room 625 

200 Granby Street 

Norfolk, Virginia 23510 

Kenneth.n.whitehurst@usdoj.gov 

/s/ Matthew S. Throop 

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