The Honorable W illiam W S chwa rzer, United States District Judge f or the Nor thern District * of California, sitting by

desig nation. 1 NO T REC OM M EN DE D F OR F UL L- TEX T P UB LIC AT ION F ile Nam e: 07a0311n.06 F iled: May 7, 2007 No. 06-4030 UN ITED STA TES C OU RT OF AP P EA LS F OR THE SI XT H C IR CU IT

In re: H EN RI CKS C O M ME RCE PARK, LLC, Debtor .

_____________________________ _ _ _ _____ GA RY G ORSKI, Appellan t,

v. SAUL EIS EN, U.S. Trustee, Appellee. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) O N AP P E A L F R O M THE BA NK RU P TC Y A P P ELLA TE P AN EL OF THE SI XT H C IR CU IT

Before: DAUG HTREY and GIBBONS, Circuit Ju dges; and S CHWARZ ER, DistrictJudge. * JULIA SMITH GIBBONS , Circuit Judge. Appellant, the sole e quity secur ity holder of a debtor in bankr

uptcy , challeng es the de ci sion of the B ankruptc y Appellate Pane l affir

ming the ban kr u p tc y c o urt’ s d e n ia l o f

h is mo ti o ns e e k in g a dmi n is tr a ti v e e xp e n s e p r io r it y f o r h is le g a l f

e es purs ua nt t o 11 U.S. C. § 503( b) (3 )( D) , (b) (4 ). Al tho ug h a pp e lla nt c a sts the iss ue on

a pp e a l in te rm s of the prope r interpr etation of § 503 of the Ba nkruptcy Code, the i ssue before us is not a leg al one.2

The de cisi ons rende red by both the appellate panel a nd the bankr

uptcy court turne d on fac tual de te rm inatio ns ma de by the ba nk ru ptc y c ourt –f indi ngs that

re ma in u

nc ha lle ng e d o n a

pp e a l. Mo re ov e r, a

re vie w o f t

he re c or d r e ve a ls n o er

ro r in the se fa c tua l f

ind ing s. Ac c or din g ly , w e a ff ir m.

I. Appellant Ga

ry Gorski is the sole manag ing me mber a nd equity share holder of H enric ks Commerce Par

k, L L C (“De bt o r” ). On August 28, 2002, De btor filed for Chapter 11 ba

nkruptcy protec tion. The bankruptc y court a uthorized Debtor to retain J ames Ehr man of the f

irm Porter, Wright, Morris, a

nd Arthur ( “Porter Wrig ht”) a s counsel. On Dec ember

31, 2003, the law f

irm of S imon & Short, L L C (the “Firm”) filed an a pplication for a pproval a s substit ute counse l for Debtor. On J anuar y 26, 2004, the bankr

uptcy court de nied the F ir m’ s a pp lic a tio n, fi nd ingtha

t th e F ir m c ou ld no t me e t th e re qu ir e me nts of 11 U. S.C. § 3 27 . Wh ile Porter Wrig ht continued as De btor’s counse l, the Firm took the lea d role in the ba nkruptcy proce eding s, purportedly

repr esentingGorski in his capa city as De btor’s sole equity

share holder. On May 4, 2005, Gorski filed a motion to have the Fir m’s leg al fe es and e x penses incur red duri ngthe ba

nk ru ptc y pr oc e e din g s g ive n a dmi nis tr ativ e e xpe ns e pr ior ity un de r 1 1 U .S. C. § 503(b)( 3)(D) , (b)( 4). On J une 15, 2005, the bankruptc y court denied Gorski’s motion. In denying Gorski’s motion, the court did not take issue w ith Gorski’s formulation of the le g al standard to be applied. Rather

the bankr uptcy court found that (1) the Firm’s r epre sentation was not limited to work perf ormed on be half of Gorski in his individual c apac ity as De btor’s sole equity secur ity holder but that the Fir

m also perf

ormed work on behalf of Debtor; and (2) the Firm’s work on behalf of De btor

wa s so int e rt

wi ne d w ithits re pr e se ntatio n o f G or sk i a s an e qu ity se c ur ity ho lde r that it wa s im po ssi bleUn de r 1 1 U .S. C. § 11 01 (1 ), a de bto r- in- po sse ssi on

me ans the de bto r i n a

Cha pte r 1 1 c a se 1 wher e, as in this case , no trustee ha s been a ppointed. See 11 U.S.C. § 1107(a). 2 3 to determine which portion of t he Firm’s fee s and ex penses were attributable to its repre sentation of Gorski. The ba

nkruptcy court then note d that beca use the F irm’s application to serve as D ebtor’s counsel wa s denied, a

ny fee s attributable to w ork done for De btor could not be g iven administrative expense priority

under § 503. F inally , the bankr uptcy court determined that the abse nce of a mea ns for a pportioning the Firm’s f

ees be tween the two aspec ts of its repre sentation prec luded an a war d of any of its fee s and expenses as a n administrative expense under § 503. Followingthe bankr

uptcy court’s de nial of Gorski’s motion to alter or amend, he appea led the decision of the ba

nkruptcy cou rt . The B ankruptc y

Appellate Pane l (“B AP”), in an opinion re ly ing on substantially

the same r easoning as t he bankruptcy court, affirmed. Gorski subsequently appea led. II. We reviewa bankr

uptcy court’s f actua l findings f

o r cl ear err or. Robinson v. Champaign Landmark, Inc. (

In re Robinson ), 326 F .3d 767, 770 (6th Cir. 2003). We r eview leg al issues, whether resolved by

the district court or a

bankruptc y

appellate panel, de novo

. Id. at 771. The pa rties and the c ourts that have pr eviously consi d er ed Gorski’s cla im ag ree as to the g ener al statutory fra

mework that g overns this c ase. Under 11 U.S.C. § 503, certain e x penses incur red duringthe pende ncy

of a ba nkruptcy proce edingare enti t l ed to administrative priority . More sp e c if ic a lly , atto rn e y s’ fe e s ma

y be tr e a te d a s a dmi nis tr a tiv e e xpe ns e s und e r c e rt a in c ir c ums tanc e s. Section 503(b)( 2) trea

ts as administrative costs any compensation and reimbursement awarde d under 11 U.S.C. § 330(a). Unde r § 330(a ), l eg al fees i ncurr ed by the t rustee–or the debtor- in-possession 1 wh o ass ume s the po we rs and dutie s of tru ste e –in the a dmi nis tr a tio n o f t he e state are c omp e ns a

ble 24

so long a s retaine d counsel mee ts t h e d i s i n t er estedne ss require ment of 11 U.S.C. § 327. Under § 503(b)( 3)(D) , (b)( 4), the leg al fe es of c erta in individuals, including an equity secur ity holder of the debtor, may

be tre at ed as ad m inistrative expenses if those individuals make a “ substantial

c on tr ibutio n” to t

he c a se . I t is in t

his latte r c la ss o f a dmi nis tr a tiv e e xpe ns e s th a t G or sk i se e ks to include leg al fe es incurr ed as a re sult of the Firm’s r epre sentation of him in his role as the De btor’s sole equity

secur ity holder. III

. Gorski’s ar g ument on appea l focuses on his claim t hat t he BAP, and implicitly the bankr uptcy

c ourt , e rr on e ou sly

c on str ue d § 50 3( b) (3 )( D) , ( b) (4)

. How e ve r, his c la im f un dame nta lly misunderstands the B AP decision. There is nothing in its opinion to support Gorski’s cla im that the B AP c re a te d a

n a dd iti on a l r e qu ir e me nt– name ly , pr ior a

pp ro va l of the ba

nk ru ptc y c ourt purs ua nt t o 11 U.S.C. § 327–in order for an equity

s ec u rity holder’s attorney s’ fe es to be include d under § 503(b)( 3)(D) , (b)( 4). As discussed be low, Gorski’s argument fails not beca use he misappr ehends the lega l f

ra me wo rk but be c a us e the ba

nk ru ptc y c ourt ’s fa c tua l f

ind ing s, un c ha lle ng e d b y Go rs ki, prec lude an a

war d of fe es under

§ 503(b)( 3)(D) , (b)( 4). In denying G orski’s motion, the bankruptcy court made two critica l f

actua l findings: (1) the Firm pe rfor

med work on behalf

of both Debtor, whose sole re prese ntative throug hout the bankruptc y proce eding s was Gor ski, and Debt o r’ s s o l e equity secur ity holder, a lso Gorski; and (2) the Firm’s

wo rk on be ha lf of De bto r w a s so in ter tw in ed wi th t hat do ne on

be ha lf of De bto r’ s e qu ity

se c ur ity holder that it was impossible for the c ourt to determine how to a pportion the leg al fe es betwe en the tw o. Con se qu e ntl y , the ba nk ru ptc y c ourt de nie d G or sk i’ s mo tio n, no tin g tha t it ne e d n ot e ng a g e inEv e n if Go rs ki w e re to m ake su c h a n a rgume nt, it wou ld lik e ly fa il. As the Se ve nth Cir c uit 3 has obser ved, once a bankr

uptcy court de termines that an attor n ey m ay n ot repre sent a de btor-inpossession beca

use he or she does not mee t the require ments of 11 U.S.C. § 327, it would render the limit ation imposed by

§ 327 meaning less if the bankruptcy could award fees for service s rende red by said counsel unde r § 503. See I n re MilwaukeeEngraving Co., Inc. , 21 9 F .3 d 63 5, 63 7- 39 (7 th C i r. 2 0 0 0 ) ( n o t i n g th atan at t o rn ey ’s fe es m ay b e gi v en ad m i n i s tra t i v e p ri o ri ty , i f a tal l , th ro u gh operation of § 503(b)( 2), which imports the re quirements of c ourt approva l under 11 U.S.C. § 327).

5 any inquiry reg ardingthe § 503(b)(3)(D ), (b)(4) requireme nts as i t was unable to calc ulate the amount of any leg al fe es that mig ht qualify

. Contrary to G orski’s asser tion, the BAP, in aff

irming the bankruptc y

court, e x pressly

reje cted the notion that § 503(b)(3) (D), ( b)(4) imposes any co ndition of prior court a pproval or disinterestedne ss before an equity secur ity holder’s attorney s’ fe es ca n be g iven adminis t ra t ive

e xpe ns e pr ior ity

. Go rs ki’ s posi tio n thr ou g ho ut t he se pr oc e e din g s h a s r e ma ine d unc ha ng e d: b e c a

us e the Fir m repre sented him in his capac ity as an equity secur ity holder of D ebtor a

nd beca use he

su bs tanti a lly

c on tr ibute d t o th e c a se , § 50 3( b) (3 )( D) , (b) (4 ) m and a te s a dmi nis tr a tiv e e xpe ns e treatment for the F irm’s leg al fe es. Gorski doe s not contend that work per formed by the Fir m on be ha lf of De bto r i s c omp e ns a

ble un de r § 50 3. Gi ve n th e fact ual find ingthat th e F ir m a c tua lly 3 perf ormed wor

k for Debtor and the absence of an abilit y to apportion accura tely the leg al fe es at issue in t his c a se , th e ba

nk ru ptc y c ourt wa s c or re c t in de ny in g Go rsk i’ s motio n. Go rs ki’ s f a ilure to challeng e these fac tual finding s, by itself, justifies affirma

nce. Fur thermore , there is ample evidenc e to support t he bankr uptcy court’s f indings. As to the question of whethe r the F irm did work on behalf of Debtor, we f ind no error

in the bankruptc y

court’s resolution of this matter. As the B AP observed in its revie w, (1) the Firm pe rfor med workGorski takes issue w ith this o b s er vation, sug g esting that wer e we to affir m the BA P 4 decision, we would in effe ct cr af t a rul e pre venting an equity secur ity holder fr om obtaining a tto rn e y s’ fe e s un de r § 50 3( b) (3 )( D) , ( b) (4 ) whe ne ve r t hat e qu ity se c ur ity ho lde r’ s c ouns e l pe rf

or ms work tra ditionally

done b y a d eb t o r’ s co u nsel. We adopt no such rule . The fa ct that much of the work done by

the Fir m is work traditionally done by a debtor’s counsel mer ely lends support to the ba nk ru ptc y c ourt ’s fi nd ingthat th e F ir m did wo r k o n b e h a lf

o f D e btor in addition to represe nting De bto r’ s e qu ity

se c ur ity ho lde r. Th e re su lt re a c he d in thi s c a se ari se s f ro m it s uniq

ue fa c tua l c on te xt, and Gor ski’s eff

orts to rec ast the BAP decision or any decision af

firming the B AP as a broa d leg al rule a re misplace d. 6 traditionally

done by a debtor ’s counse l; (2) Gor ski’s own aff idavits offer ed in support of his motion 4 acknow ledg ed that he a cted solely throug h the Fir

m, both in his capa cities as sole re prese ntative of Debtor a nd as De btor’s equity

s ecur ity holder; (3) the Fir

m acknowle dg ed bef

ore the bankruptc y

court that it saw no rea l disti nction betwee n Gorski’s dual roles in the bankr uptcy ; and (4) a fter the Firm’s

a pp e ara nc e , Po rt e r Wr ig ht wa s re le g a te d to a se c on da ry and ma inl y a dv iso ry ro le in t he pr oc e e din g s. Gorski offe rs nothing to r efute this evidence , and we are left with littl e doubt as to the soundness of the bankruptc y court’s finding , much less the “def inite and firm convic tion” that a mistake ha s been made that would support a finding of clear error

. See, e .g. , Un ite d S tates v . A lt (

In reAl t), 305 F .3d 413, 422 (6th Cir. 2002). As to the bankruptc y

court’s f inding that the two aspec ts of the Fir m’s repr esentation were too intertwined to allow the court to assess which por tion of its fees mig ht qualify as an a dminist rative expense, this finding a lso must stand. As noted above , the Fir m, though the c ounsel-of- rec ord for Debtor’ s equity

secur ity holder , t ook a lea d role in the proc eeding s, perf orming work that is often done b y a debtor’s counsel. The individual in the best positi on to identify some quantum of the F i r m ’ s w o r k

th a tc anb e tr a c e d

t o i t s r e p r e s e n t a t i o no f

D e b t o r ’ s e qu i ty s e c ur i ty h o l d e r

– n am e l y, Gorski–has fa iled to do so. Absent some showing by Gor s k i , we cannot conc lude the bankr uptcy

c o urtc l e ar l y e r

r e d i nf i n d i n g i t i m p o s s i b l e t o a

p p o rt i o nth e f

e e s i na m e an i n g f

u l an d a c c ur a t e w ay.7 I V. For the fore g oing r easons, we aff irm.