MOTION FOR POST-PETITION RETAINER – PAGE 1 OF 7

Gregory W. Mitchell 

FREEMAN LAW, PLLC 

7011 Main Street 

Frisco, Texas 75034 

(972)463-8417 – Office 

(972)432-7540 – Facsimile 

State Bar ID: 00791285 

COUNSEL FOR KND HOSPITALITY COMPANY, INC. 

IN THE UNITED STATES BANKRUPTCY COURT 

FOR THE NORTHERN DISTRICT OF TEXAS 

DALLAS DIVISION 

In re: § Case No. 24-33108 

 § 

KND Hospitality Company, Inc. § 

 § Chapter 11 

 Debtor § 

________________________________________________________________________ 

MOTION FOR POST-PETITION RETAINER 

NO HEARING WILL BE CONDUCTED HEREON UNLESS A 

WRITEN RESPONSE IS FILED WITH THE CLERK OF THE 

UNITED STATES BANKRUPTCY COURT AT 1100 COMMERCE 

STREET, ROOM 1254, DALLAS, TX 75242-1496, BEFORE CLOSE 

OF BUSINESS ON DECEMBER 12, 2024, WHICH IS AT LEAST 21 

DAYS FROM THE DATE OF SERVICE HEREOF. 

ANY RESPONSE SHALL BE IN WRITING AND FILED WITH 

THE CLERK, AND A COPY SHALL BE SERVED UPON COUNSEL 

FOR THE MOVING PARTY PRIOR TO THE DATE AND TIME 

SET FORTH HEREIN. IF A RESPONSE IS FILED A HEARING 

MAY BE HELD WITH NOTICE ONLY TO THE OBJECTING 

PARTY. 

IF NO HEARING ON SUCH NOTICE OR MOTION IS TIMELY 

REQUESTED, THE RELIEF REQUESTED SHALL BE DEEMED 

TO BE UNOPPOSED, AND THE COURT MAY ENTER AN 

ORDER GRANTING THE RELIEF SOUGHT OR THE NOTICED 

ACTION MAY BE TAKEN. 

TO THE HONORABLE MICHELLE V. LARSON, UNITED STATES 

BANKRUPTCY JUDGE: 

 
MOTION FOR POST-PETITION RETAINER – PAGE 2 OF 7

KND Hospitality Co Inc., the debtor and debtor-in-possession in the abovecaptioned case (the “Debtor”), files this Motion for Approval of Post-Petition Retainer (the 

“Motion”) to Freeman Law, PLLC (“Counsel”) and in support thereof the Debtor 

represents as follows: 

JURISDICTION AND VENUE 

1. This Court has jurisdiction over this Motion pursuant to 28 U.S.C. §§ 157 

and 1334(b). This is a core proceeding pursuant to 28 U.S.C. § 157. The Motion is proper in 

this district pursuant to 28 U.S.C. §§ 1408 and 1409. 

2. The statutory basis for the relief requested herein is sections 105 and 

363(b)(1) of the Bankruptcy Code. 

BACKGROUND 

3. On October 1, 2024 (the “Petition Date”), the Debtor, through Counsel, 

commenced a case by filing a petition for relief under chapter 11 of the Bankruptcy Code 

(the “Chapter 11 Case”). The Debtor continues to operate its business as a debtor and 

debtor-in-possession pursuant to Bankruptcy Code sections 1107(a) and 1108. 

4. To date, no creditors’ committee has been appointed in the Chapter 11 Case 

by the Office of the United States Trustee for the Northern District of Texas (the “United 

States Trustee”). No trustee or examiner has been appointed in the Chapter 11 Case. 

5. On October 6, 2024, Debtor filed its application to employ Counsel. An 

order granting that motion was entered on October 31, 2024. 

6. Pursuant to Counsel’s engagement agreement with Debtor (the 

“Engagement Agreement”), Debtor was to provide a retainer in the amount of 

$20,000.00. However, prior to filing the case, Debtor had only paid $5,000.00 to Counsel. 
MOTION FOR POST-PETITION RETAINER – PAGE 3 OF 7

7. On or about October 9, 2024, Debtor paid an additional $5,000.00 to 

Counsel.1

8. By this Motion, Counsel seeks authorization to retain in trust the $5,000.00 

received post-petition, and Debtor seeks authorization to make post-petition retainer 

payments up to an additional $10,000 (in order to bring the total retainer to $20,000.00, the 

amount agreed to in the Engagement Agreement). 

9. Counsel will hold the Retainer in its IOLTA trust account pending approval 

by this Court of Counsel’s fees. Any sums remaining at the close of the representation will 

be refunded to the Debtor. 

ANALYSIS 

10. The relevant statutes of the Bankruptcy Code applicable to the Motion 

include the following: 

(1) Section 363(b)(1) generally authorizes a debtor-in-possession to use property of the 

estate to the extent it benefits the estate; 

(2) Section 328 provides broad authorization, with court approval, to employ 

professionals and compensate them “on any reasonable terms and conditions of 

employment, including on a retainer, on an hourly basis, on a fixed or percentage fee 

basis, or on a contingent fee basis.” That section goes on to provide limitations on 

compensation allowed. 

(3) Section 330 provides that, after notice to parties in interest, the Court may award 

“reasonable compensation for actual, necessary services rendered by the trustee, 

examiner, ombudsman, professional person, or attorney and by any paraprofessional 

person employed by any such person,” along with reimbursement of expenses. 

Importantly, subsection (a)(2) of that section makes clear that the Court may award 

compensation that is less than the amount requested. 

(4) Finally, Section 105 of the Bankruptcy Code provides the Court broad authority to 

“issue any order, process, or judgment that is necessary or appropriate to carry out 

the provisions of [Title 11].” 

1 Debtor made this payment directly to Counsel’s firm via a payment link, and undersigned counsel only 

recently became aware of such payment – which is being held in Counsel’s IOLTA account. An amended Rule 

2016 disclosure will be made contemporaneously with the filing of this Motion.
MOTION FOR POST-PETITION RETAINER – PAGE 4 OF 7

11. Collectively, these provisions make it clear that this Court has final say over 

any award of compensation to a Debtor’s attorney. 

12. The Amount of the requested Retainer is believed to be reasonable in light of 

the expected efforts necessary in the Chapter 11 Case. The only reason that the full amount 

of the agreed retainer was not made was the delay in receipt of certain receivables, combined 

with the immediate need to file this case. 

13. The Debtor believes that the employment of Counsel and the payment of the 

requested retainer is in the best interest of the Debtor, the creditors, and the bankruptcy 

estate. Attorneys with Counsel are duly admitted to practice law before this Court and are 

well qualified to advise and represent the Debtor on all matters related to this Chapter 11 

Case and any and related proceedings. 

14. Section 363 of the Bankruptcy Code allows a Debtor to use property of the 

estate other than in the ordinary course of business if he articulates a sound business 

justification for doing so. Great judicial deference is given to the debtor’s exercise of 

business judgment. As long as such use appears to enhance a debtor’s estate, court approval 

of a debtor-in-possession’s decision should only be withheld if the debtor's judgment is 

clearly erroneous, too speculative, or contrary to the provisions of the Bankruptcy Code. 

See, e.g., Richmond Leasing Co. v. Capital Bank, N.A., 762 F.2d 1303, 1309 (5th Cir. 1985) 

(quoting Allied Tech., Inc. v. R.B. Brunemann & Sons, 25 B.R. 484, 495 (Bankr. S.D. Ohio 

1982)) (upholding a debtor’s exercise of business judgment in a decision to assume a lease). 

15. Use of property of the estate to pay the Retainer is in the best interests of the 

Debtor and the estate. Without competent representation, Debtor would be unable to 

present and confirm a feasible Chapter 11 plan of reorganization or adequately address 
MOTION FOR POST-PETITION RETAINER – PAGE 5 OF 7

pending litigation. Accordingly, there is a sound and proper business reason for the use of 

the Retainer as set forth herein. 

16. Counsel will hold the Retainer in its IOLTA trust account pending approval 

by this Court of Counsel’s fees. 

17. In assessing the propriety of a retainer, the court should consider the 

following factors, which are primarily focused on the reasonableness and necessity of the 

retainer within the context of a specific case: 

(1) the economic impact the payment of the retainer might have on the debtor’s 

business; 

(2) the retainer’s impact on the prospects for reorganization (which, of necessity, 

must include an evaluation of whether the debtor will, at confirmation, have 

funds available to pay all administrative expenses as required by 1129(a)(9) of the 

Code); 

 

(3) the amount and the reasonableness of the retainer; 

(4) the reputation of counsel; and 

(5) the ability of counsel to be able to disgorge the retainer if, at the conclusion of 

the case, the court should determine that the fees paid during the case were not 

justified. 

In re Truong, 259 B.R. 264 (Bankr. D. New Jersey, 2001). The Court in Truong noted that, 

although post-petition retainers and the ability to draw against such retainers are granted in 

large bankruptcy cases, usually to large law firms, smaller law firms should not be treated any 

differently. Id., at 268. 

Economic Impact on Debtor’s Business 

18. Here, the retainer does not affect the Debtor’s ability to pay post-petition 

expenses. 
MOTION FOR POST-PETITION RETAINER – PAGE 6 OF 7

19. The Debtor’s Monthly Operating Report for October, 2024, reflects cash on 

hand in the amount of $23,776.20 and accounts receivable in the amount of $272,146.11.2

Impact on Prospect for Reorganization 

20. By paying the agreed-upon Retainer, Debtor will continue to receive the 

advice and guidance necessary to increase its prospects for reorganization. 

Amount and Reasonableness of the Retainer 

21. The specific amount of the retainer is reasonable and is not extraordinary 

when balanced against the services which must be rendered and the ongoing business being 

conducted by the Debtor. 

Reputation of Counsel 

22. Counsel enjoys a fine reputation in this District and in neighboring districts. 

23. It is clear from the examination of the record that this case has a level of 

complexity that demands experienced bankruptcy counsel. Counsel is an experienced 

bankruptcy practitioner and in measuring the facts of this case, the Court should find that 

the complexity of this case and the need for counsel warrant the payment of the requested 

reasonable post-petition retainer. 

Ability of Counsel to Disgorge Fees 

24. Finally, Counsel is not requesting that it be permitted to draw against the 

retainer prior to allowance of compensation by the Court. Thus, the Court’s ability to 

oversee payment of fees is fully preserved. 

25. For the reasons cited above, Debtor seeks authorization to pay the requested 

Retainer to Counsel post-petition, and authorization for Counsel to retain the Retainer in its 

2 Debtor’s monthly operating report for October 2024, is being filed contemporaneously with the filing of this 

Motion.
MOTION FOR POST-PETITION RETAINER – PAGE 7 OF 7

trust account and to apply the Retainer to its post-petition fees and expenses after such postpetition fees and expenses have been approved and authorized by this Court after a request 

made in accordance with all applicable laws and rules. 

WHEREFORE, Debtor respectfully requests this Court issue an Order approving 

the Motion on the terms set forth herein, and for such other and further relief to which the 

Debtor may show itself justly entitled. 

DATED this 21st day of November, 2024. 

 Respectfully submitted, 

 FREEMAN LAW, PLLC

 /S/ Gregory W. Mitchell 

 Gregory W. Mitchell 

 7011 Main Street 

 Frisco, Texas 75034 

 (972)463-8417 – Office 

 (972)432-7540 – Facsimile 

 State Bar ID: 00791285 

 Proposed Attorneys for Debtor 

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing has been served on this 

21st day of November, 2024, to the parties listed on the attached master mailing matrix either 

electronically via ECF or by U.S. mail: 

/S/ Gregory W. Mitchell 

 Gregory W. Mitchell 
 Label Matrix for local noticing KND Hospitality Company, Inc. Texas Comptroller of Public Accounts, Revenu 

 0539-3 1113 Smirl Drive Kimberly A. Walsh 

 Case 24-33108-mvl11 Heath, TX 75032-8947 c/o Sherri Simpson, Paralegal 

 Northern District of Texas PO Box 12548 

 Dallas Austin, TX 78711-2548 

 Thu Nov 21 11:26:24 CST 2024 

 1100 Commerce Street American Express Amtrust Workers Comp 

 Room 1254 P.O. Box 650448 59 Maiden Lane, 42nd Floor 

 Dallas, TX 75242-1305 Dallas, TX 75265-0448 New York, NY 10038-4502 

 

 Communion Neighborhood Cooperative Freeman Law, PLLC Home Bank Texas 

 514 Lockwood Drive 7011 Main Street 601 U S 175 Frontage Rd. 

 Richardson, TX 75080-5609 Frisco, TX 75034-4224 Seagoville, TX 75159 

 Huber Prater Henson Internal Revenue Service Lockwood Commonwealth 

 9330 LBJ Fwy Special Procedures - Insolvency 514 Lockwood Drive 

 Suite 280 P.O. Box 7346 Richardson, TX 75080-5609 

 Dallas, TX 75243-3446 Philadelphia, PA 19101-7346 

 Melton Norcross & Associates National Funding (p)TEXAS COMPTROLLER OF PUBLIC ACCOUNTS 

 2591 Dallas Parkway 4380 La Jolla Village Drive REVENUE ACCOUNTING DIV - BANKRUPTCY SECTION 

 Suite 300 San Diego, CA 92122-1200 PO BOX 13528 

 Frisco, TX 75034-8563 AUSTIN TX 78711-3528 

 United First United States Trustee (p)VELOCITY CAPITAL GROUP LLC 

 2999 NE 191st Street 1100 Commerce Street 333 PEARSALL AVENUE SUITE 105 

 Unit 901 Room 976 CEDARHURST NY 11516-1842 

 Miami, FL 33180-4926 Dallas, TX 75242-0996 

 Gregory W. Mitchell Gregory Wayne Mitchell 

 The Mitchell Law Firm, L.P. Freeman Law, PLLC 

 8140 Walnut Hill Lane 7011 Main Street 

 Suite 301 Frisco, TX 75034-4224 

 Dallas, TX 75231-4328 

 

 The preferred mailing address (p) above has been substituted for the following entity/entities as so specified 

 by said entity/entities in a Notice of Address filed pursuant to 11 U.S.C. 342(f) and Fed.R.Bank.P. 2002 (g)(4). 

 Texas Comptroller Velocity Capital Group 

 P.O. Box 13528 333 Pearsall Ave 

 Capitol Station Cedarhurst, NY 11516 

 Austin, TX 78711-3528 

 The following recipients may be/have been bypassed for notice due to an undeliverable (u) or duplicate (d) address. 
 (u)Homebank Texas (u)Lockwood Commonwealth, LLC d/b/a Communion (u)United First, LLC 

 

 (u)Velocity Capital Group, LLC End of Label Matrix 

 Mailable recipients 19 

 Bypassed recipients 4 

 Total 23