No. 95-1495, In re Amdura Corp.

Attachment (District Court Judge’s Memorandum and Order) is not available electronically.* This order and judgment is not binding precedent except under the

doctrines of law of the case, res judicataand collateral estoppel. The court generally disfavors the citation of orders and judg ments; nevertheless, an order and judgment may be cited under the terms and condi tions of 10th Cir. R. 36.3.

UNITED STATES COURT OF APPEALS Filed 1/10/97 TENTH CIRCUIT

In re: AMDURA CORPORATION; AMDURA NATIONAL DISTRIBUTION COMPANY, formerly known as FOK; COASTAMERICA CORPORATION; COAST TO COAST HOLDINGS, INC.; COAST TO COAST STORES, INC.; INTERTRADE CARGO, INC.; AMDURA CORPORATION, INC., Debtors.

---------------------- AMDURA NATIONAL DISTRIBUTION COMPANY, Appellant,

v. AMDURA CORPORATION, INC. Appellee. No. 95-1495 (D.C. No. 94-M-2119) (D. Colo.)

ORDER AND JUDGMENT *

Before SEYMOUR , Chief Judge, ANDERSON and BRORBY, Circuit Judges.-2-

Amdura National Distribution Company ("Amdura Natio nal") appeals the District Court of Colorado's affirmation of the Ban kruptcy Court of Colorado's judgment granting Amdura Corporation's Motion for P ayment of Administrative Obligations in the amount of $276,063. We affirm the district court's judgment.

Amdura Corporation was a holding company which owne d all the outstanding stock of a number of corporate subsidiaries, including Amdura National. On April 2, 1990, Amdura Corporation, Am dura National, and other Amdura Corporation subsidiaries filed for Chapter 1 1 reorganization. After disqualifying two law firms that had been rep resenting the debtors collectively, the bankruptcy judge ordered separate counsel for each debtor. Amdura Corporation hired the law firm of Thompson & Knight, and Amdura National hired Mr. Joel Laufer, a sole practitioner . The legal representation of the other debtor entities is not relevant to the is sues on appeal. On May 15, 1992, subsequent to the bankruptcy judge 's confirmation of a joint plan of reorganization applicable to all of t he debtor entities, Amdura Corporation filed a Motion for Payment of Administr ative Obligations pursuant to 11 U.S.C. §§ 503(b)(3)(D) and (b)(4) (1994). In th is motion, Amdura Corporation sought to recover from Amdura National a portion of the fees paid by Amdura Corporation to Thompson & Knight for tasks that Thompson & Knight1 Amdura National additionally claims Amdura Corpor ation wrongfully

circumvented 11 U.S.C. § 327 (1994) ("Employment of professional persons [by the debtor-in-possession]") through use of § 503. That argument is meritless. -3- had performed to the alleged joint benefit of Amdur a Corporation and Amdura National. Amdura Corporation contended that, as th e parent corporation, it had ordered its counsel to "take the lead" in resolving a number of problems common to the interrelated debtors, and in so doing had pr ovided Amdura National with, in the terms of § 503, a "substantial contribution" fo r which it was entitled to reimbursement. The bankruptcy court, after an evidentiary hearing, allowed Amdura Corporation the requested administrative claim. Th e district court affirmed the bankruptcy court's decision. Amdura National now appeals to the Tenth Circuit, alleging the bankruptcy court failed to apply the " self-interest motive" test we announced in In re Lister , 846 F.2d 55, 57 (10th Cir. 1988), in finding Amdu ra Corporation provided the requisite "substantial contribution" to the Amdura National estate. See 11 U.S.C. § 503(b)(3)(D). Amdura National contend s Amdura Corporation would have taken the actions it took regardless of whether benefit accrued to Amdura National, and therefore i ts actions were motived by self-interest, any benefit to Amdura National being merely incidental. Thus, Amdura National claims Amdura Corporation did not m ake a substantial contribution to the Amdura National estate, as § 50 3(b)(3)(D) requires. 1Amdura Corporation was both a creditor and an equity security holder of Amdura

National, and therefore was eligible to seek recomp ense from Amdura National via § 503 for expenses incurred in providing it pro fessional services. 11 U.S.C. §§ 503(b)(3)(D), 503(b)(4).

-4- An appellate court reviews a trial court's findings of fact using a clearly erroneous standard, and its application of rules of law under a de novo standard. Lister , 846 F.2d at 56 (citing In re Mullet , 817 F.2d 677, 678-79 (10th Cir. 1987)). The trial court has wide discretion in det ermining both whether to allow administrative expenses under § 503 and the appropr iate amount of expenses to so award. Id. (citing In re Consolidated Bancshares, Inc. , 785 F.2d 1249, 1252 (5th Cir. 1986); In re Grynberg , 19 B.R. 621, 623 (Bankr. D. Colo. 1982)). Accordingly, we review prior findings of fact for c lear error, applications of law under a de novo standard, and the bankruptcy court' s overall decision to award Amdura Corporation § 503 administrative expenses fo r abuse of discretion. After review of pertinent legal authorities, we fin d ourselves in agreement with the well-reasoned opinion of the district court judge, Chief Judge Matsch. Accordingly, we affirm his holding for substantiall y the reasons set forth in his opinion, a copy of which is attached hereto. AFFIRMED

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Entered for the Court-5- WADE BRORBY United States Circuit Judge