By order of the Ba nkrup tcy A ppellate Pan el, th e pr eceden tial effect of this decision is lim ited to the ca se and parties pursu ant to 6th Cir. BA P L BR 8013 -1( b)

. See also 6th C

ir. B AP LBR 80 10-1(

c)
.
F ile Nam e: 07b0004n.06

BA NK RU P TC Y A P P ELLA TE P AN EL OF THE SI XT H C IR CU IT

I n re: NI COL E ENERGY SERVI CES, I NC., )

) Debtor. )

_____________________________________ ) ) NI COL E ENERGY MARKETI NG, I NC., ) NI COL E GAS PRODUCTI ON, L TD., ) NI COL E GAS MARKETI NG, I NC., ) SEABURYSON PROPERTI ES, L TD., ) and F RED FUL SON, ) ) Ap pe lla nts , )

)
v. ) No. 06-8028 ) L ARRY J . McCL ATCHEY, ) CH APT ER 1 1 T RU STE E F OR ) NI COL E ENERGY SERVI CES, I NC., )

) Appellee

. )

_____________________________________ )

Appea l from the United States B ankruptc y Court fo r t he Sou the rn

Di str ic t of

Oh io, Ea ste rn

Di vis ion a t Co lum bu s. No. 03-67484.
Submit ted: November

8, 2006
Dec ided and F iled: Febr

uary 1, 2007
B e fo re : L AT TA , PA RSO NS, a nd WHI PPL E, B a nk

ru ptc y Ap pe lla te Pane l Judg e s.

____________________ CO UN SEL
O N B RI E F: Michae l T. Gunner, H illiard, Ohio, Clifford O. Arnebe ck, Jr., Col umbus, Ohio, J ay May na rd , Co lum bu s, Oh io, fo r Ap pe lla

nts

. Ste wa

rt Cup ps , KEG L ER, B RO WN, HI L L& RI TT ER, Columbus, Ohio, for Appellee.Pag e 2 of 8 ____________________
OP IN ION

____________________
J ENNI E D. L ATTA, B ankruptc y Appellate Pane l J udg e. Nico le Ener g y Marke ting, Inc., Nicole Gas Marke ting, Inc., Nicole Gas Production, L td., Seabury son Properties, and F red F ulson (“A ppellants”) a

ppeal a n order of the ba

nkruptcy co u rt imposing $16,303.55 as sa nctions for Ap pe lla nts ’ w ill fu l vi olatio n o f t

he c ourt ’s pr ior or de r dir e c tin g the m to c omp ly wi th s ub po e na s to appea r for Rule 2004 examinations and produce certain documents. The sum aw arde d equals the fee s and costs the Tr

ustee incur

red due to Appellants’ noncomplianc e with the cour t’s order

. Appellants asse rt that the bankr uptcy court violated Appellants’ due proce ss rig hts when the c ourt failed to c onduct a hear ing to de termine the amount of a sanction awa rded. A ppellants furthe r ar g ue that th e ba

nk ru ptc y c ourt e rr e d in de te rm ini ng the re a so na

ble ne ss o f t

he sanc tio n b a se d o n a ff

ida vit s of counse l.

I. ISSU ES ON AP P EAL
Th is a pp e a l ra ise s the fo llo wi ng iss ue s: (1 ) wh e the r a bank ru ptc y c ourt is r e qu ir e d to ho ld a sepa rate hear ing to de termine the amount of sanc tions to be awar ded; and ( 2) whe ther a bankruptc y court may rely solely upon aff idavits to determine the amount of a sanc tion to be awar ded.

II. JU RI SDI CT ION AND STANDARD OF RE VI EW
The B ankruptc y

Appellate Panel (“B AP”) has jurisdiction to decide this appeal. The United States District Court for the Southern District of Ohio has authorized appe als to the BA P. A f inal

or de r o f a ba nk ru ptc y c ourt may be a pp e a le d a s o f r ig ht u

nd e r 2 8 U .S. C. § 15 8( a )( 1) . A n o rd e r i s final if it “ends the litigation on the mer its and leave s nothing for the c o u rt t o d o but execute the judgme nt.” Midland A s

p h a l t Corp. v. United States , 489 U.S. 794, 798, 109 S. C t. 1494, 1497 (1989) ( citations omitt ed). A b an k ru p t cy co u rt order imposing sanc tions is a final order

. In re Hake , No

. 06 -8 00 7, 20 06 WL26 21 11 6, a t *1 (B .A .P. 6th Cir . Se pte mbe r 1 4, 20 06 ); se e als o I n r e Jeanne tte Corp. , 8 32 F .2 d 4 3, 46 (3 rd Cir . 1 98 7) (f

ind ingthat a

c ourt or de r i mpo sin g sa

nc tio ns is final so long as the sanc tion amount has been de termined).

III
. F AC TS Appellants include se vera l closely held companie s relate d to Nicole Ene rg y Services , I nc. (“N icole Ene rg y ”), the Debtor in the above- sty led Chapter 11 bankruptc y case

. The c ompanies shar ePag e 3 of 8

common owner ship and manag ement throug h Appellant F red F ulson. I n October 2004, the Chapter 11 Trustee for Nic ole Ener g y , L arr y McClatchey

(“Tr ustee” ), beg an an inve stigation into t he bu sin e ss a

nd fi na nc e s o f a ll o f F uls on ’s c omp a nie s, in clud ingthe Ap pe lla nts . Purs ua

nt t o th is inv e sti g a tio n, the Tr

us te e so ug ht a

nu mbe r o f d oc ume nts fr om e a c h o f A pp e lla nt c omp a nie s and

a lso reque sted that the compa nies submit to ex aminations pursuant to Fe dera l Rule of Ba nkruptcy Pr oc e dure 20 04 . A ft e r a he a ri ng on the Tr us te e ’s re qu e st an d obje c tio ns the re to b y the Ap pe lla

nts and the De btor, the bankruptc y court overr uled the objections and enter ed an order authorizing the Rule 2004 examinations and the production of docu m en t s

. T here afte r, the Tr ustee issued the appropr iate subpoena s to the Ap p el lant companies dire cting them to appea r for examination on a sp e c if ie d d a te a nd

pr od uc e the re qu e ste d d oc ume nts

. The Appe llant companies res p o n d ed t o the subpoena s with a motion to quash. After a hear ing, the bankruptc y

court, on July 15, 2005, enter ed an order denying the motion to quash (the “Jul y Orde r”) , concluding that the motion ra ised specious arguments or ones pre viously reje cted by the cour t. The Jul y

Orde r direc ted the Appe l l an t co m panies to produc e the doc uments that the Trustee h ad previously

reque sted and to submit to the Rul e 2004 examinations. The bankr uptcy

c ourt e xpla ine d at that time that App e lla nt co mpa nie s wou ld fa c e sa

nc tio ns , suc h as mon e tary fi ne s, for f uture nonc ompliance. De spite the Trustee ’s re peate d eff orts to o b t ai n t he docume nts and

e xami na tio n p ur su a nt t o th e or de r, the Ap pe ll ant s fai led t o c oo pe rate a nd c omp ly wi th t he July Orde r.
On Octobe r 7, 2005, the T ru stee filed his “ Motion to S how Cause Why Fr eddie L . Fulson and F ulson-Controlled Entiti es Should Not Be Held in Contempt.” The Appellants filed obje ctions to the motion and the Trustee replied. I ncluded in the Trustee’s reply was an invoice that detailed the a tto rn e y

fe e s and c os ts that he ha d in c ur

re d a s a re su lt o f t

he Ful so n- Con tr oll e d E nti tie s’ noncompliance

. The Trustee reque sted the bankruptc y court to aw ard those f ees a nd costs totaling over $34,000 a s a sanction ag ainst Appellants. On J anuar y 19, 2006, the bankruptcy court he ld an evidentiar y hear ing on the Trustee ’s s how cause motion. The Trustee and Appe llants were prese nt at t he hea ring . Eac h party

tender ed exhibits and made arguments, and the c ourt hea rd testimony from the Tr

ustee a nd Fulson. The ba

nkruptcy court found that the Appellants willfully violated the J uly Orde r. At the c lose of that hea ring , the bankruptcy court found that $1,653 in fee s and costs that had ac crue d from Oc tober 7, 2005 to Oc tober 27, 2005 we re attributable to t he misconduct of the Appellants. The c ourt then aske d the Trustee to submit an af fidavit itemiz ing f

ees a nd expenses inc ur re d f ro m O c tob e r 2 7, 20 05 , th ro ug h th e Janu a ry 19 , 2 00 6 h e a ri ng , r e la te d to his e ffo rt s to compel complianc e with the Jul y Orde r. Ac cording to the affidavit ultim ately submitt ed, the Trustee ’s fe es and e x penses f or this time period, plus the previous $1,653 amount, totaledAlthough the co u rt indicated in its order that the sanc tions were a war ded “unde r the 1 authority g rante d by

Fe d. R. Bankr . P. 7037(b)(2)( E),” that provision only applies to a “ party ” to a contested ma tter or adver sary proce eding

. I n this inst ance , the authority of the ba nkruptcy court wa s provided by

Rule 45 of the F eder al Rules of Civil P roce dure a s incorporated by Fe d er al Rule of B a nk ru ptc y Pr oc e dure 90 16 , sec tio n 105 of the B a nk ru ptc y Cod e , a nd the c ourt ’s inh e re nt p ow e rs

. See In re Sc iaba , 334 B.R. 524, 526 (B ankr. D. Mass. 2005) (citing Fed. R

. Civ. P. 45(e) (“F ailure by any person without ade quate excuse to obe y a subpoena serve d on that person may be dee med a contempt of the c ourt from whic h the subpoena issued. . . .”), a

nd 11 U.S.C. § 105(a) (“ The c ourt ma y iss ue a ny

. . . j u d g m e n tt h a ti s n e c e s s a r y o r a p p r o p r i a t e t o c a r

r y o u tt h e p r o v i s i o n o f

thi s title. . . .”)). Se e als o Pe re ira v . F e lze nb e rg , No. 96 Civ.7957, 1997 W L698186, at *5 (S.D.N.Y. Nov. 7, 1997) (fa ilure of nonparties to ba nkruptcy action to obe y court order direc ti n g at t endanc e a t Rule 20 04 e xami natio n cann ot sub je c t the m to Rul e 37 sanc tio ns ); Ma tte r o f Su te ra , 141 B.R. 539, 541 (B ankr. D . Conn. 1992) (Rules 26-37 adopte d by Fe d. R. B ankr. P. 7026-37 apply only when contested matters or adver sary proce eding s have b ee n commence d); In re Te k ne k , LLC , No 05 B 27 54 5, 20 06 WL21 36 04 6, a t *1 (B a nk r. N. D. I ll. June 30 , 2 00 6) (u po n is su a nc e of

su bp oe na , “ Rul e 45 sets the stag e for

what the law require s and not Fe dera l Rule 7037”). When consider ing a n awa rd of sanc tio ns purs ua

nt to its inh e re nt po we rs , ho we ve r, a ba nk ru ptc y c ourt may loo k to Rul e 37 a s a g uide to deter

mine the prope r leve l of resp o n s e t o t h e contemnor’s off ense. Pe re ira , 1 9 9 7 WL 698186, at *6. Pag e 4 of 8 $16,303.55. The Appellants filed a counter -af fidavit contesting the re asonable ness and ne cessity of the fees out lined in the Trustee’s affidavit. The court considere d both aff idavits and found the fee s and expenses deta iled by

the Trustee in his affidavit to be re asonable

. Consequently , on Fe bruar y 14, 2006, the bankr

uptcy court orde red the Appellants t o pay the Trustee sanctions in the amount of $16,303.55.

On Fe b ru ar y

1 7 , 2 0 0 6 , t h e Ap p el l an t s fi l ed t h ei r “ M o t i o n fo r A d d i t i o n al / Am en d ed Fi n d i n gs with Respect to the F ebrua ry 14, 2006 J udg ment.” Although the Appellants did not assert that the trial court’s factua l finding of willful disobedience was improper , the Appellants did ar g ue that the trial court should have conducte d a sec ond hear ing r eg arding the re asonable ness of the fees pursuant to section 330 of the Bankr uptcy Code (11 U.S .C. § 330). On M ay 12, 2006, the bankr uptcy court denied the A

ppellants’ motion, expl aining that section 330 is in ap p l i ca ble bec ause the sanctions

a wa rd e d in the pr e se nt c a se we re no t awa rd e d as pr of

e ssi on a l fe e s. Th e Ap pe lla nts c omm e nc e d th is 1 timely appea l on May

22, 2006.

IV . D ISC USS ION A. The Appellan ts Wer e Afforded Proc edural Due P roce ss by the Ban kruptcy Court

. Th e Ap pe lla

nts do no t a rgue that th e ba nk ru ptc y c ourt ’s imp os iti on

of sanc tio ns in t

his c a se
wa s unju st o r unrel ate d to th e c la im at is su e . Rathe r, the Ap pe lla nts a rgue that th e ir

du e pr oc e ss rig hts were violated when the bankruptcy court failed t o conduct a separ ate hearing to consider thePag e 5 of 8

rea sonablene ss of the fe es incurr ed by the Trustee and awarde d as a sanction ag ainst Appellants, and when the ba

nkruptcy court fa iled to apply

the lodestar me thod to determine the r ea s onablene ss of fee s as is require d for a

pplications broug ht pursuant to section 330 of the B ankruptc y Code.
Al tho ug h th e Ap pe lla

nts do no t spe c if

y , it is a pp a re nt f ro m th e ir a rgume nt t

hat App e lla

nts

asser t that the court violated the ir Fifth Amendment proce dural due proce ss rig hts. Gene rally , as the Supreme Court has e x plained, “[p]rocedura l due proc ess imposes constraints on g overnme ntal decisions which de prive individuals of ‘liber ty ’ or ‘ proper

ty ’ intere sts within t he mea ning of the Due Process Clause of

the Fif th or Four teenth Amendme nt.” Mathews v. Eldridge , 424 U.S. 319, 332, 96 S. Ct . 8 93 , 9 01 (1 97 5) . T he Sup reme Co urt has he ld t hat pr oc e dura l du e pr oc e ss r e qu ir e s a hear ing “ befor e an individual is finally deprive d of a pr operty

interest.” Id

. at 3 3 3 ; (c i t i n g W olff v. Mc Do nn e ll , 4 18 U. S. 5 39 , 5 57 -5 8 ( 19 74 ); Phillips v. Commissi oner , 283 U.S. 589, 596–97 (1931))

. No tic e a nd a n opp or

tun ity to be he a rd a re fu

nd a me nta l to the sa tis fa c tio n of p ro c e dura l du e pr oc e ss require ments. See Mullane v. Cent. Hanove r Bank & Trust C o., 339 U.S. 306, 314, 70 S. Ct . 652, 657 (1950).

I n d e te rm ini ng wh e the r t

he ba nk ru ptc y c ourt vio la te d th e Ap pe lla

n ts’ pr oc e dura l du e pr oc e ss rig hts, the Panel is asked to consider whether due proce ss require s a sepa rate hear ing to c alculate the amount of s an ctions a cour t may awa rd af ter a court ha s deeme d a per son to be in contempt for failing to obey an order re quiring compliance with a subpoena . Whil e a c ourt has broa d discretion in imposi ng sanctions as a method of enfor cing its orde rs and de terringmisconduct, such discre tion is not unfettere d. See Chambe rs v. NASCO, Inc. , 501 U.S. 32, 45-46, 111 S. Ct. 2123, 2133 (1991). Wit h respe ct to sanctions as a result of a discovery order violation, a trial court must awa rd sanc tions that are “just” and r elate to t h e cl aim at issue in order to comply

with due proc ess standar ds. In s. Corp. of Ir., Ltd. v. Compagnie des Bauxites of Guine e , 456 U.S. 694, 707, 102 S. Ct . 2099, 2107 (1982))

. Be cause the “primary purposes of civil contempt ar e to compel obe dience to a cour t order and compe nsate for

injuries cause d by noncompliance ,” an “ awa rd of attorney ’s fe es and e x penses to a s u cc essful m ovant may be appr opriate . . . .” TW M M fg. Co. v . D ur a Co rp ., 722 F.2d 1261, 1273 (6th Cir. 1983). When awa rding attorney fee s and expenses, the trial cour t must ensure that the amount awa

rded is consistent with the amount the moving party spent as a re s ult of the nonmoving pa

rty ’s fa ilure to comply

with the rules of discove ry

. Jack son v. Nissan Motor Co. , 888 F.2d 139 1 (t able opinion); No. 88-6132, 1989 WL 128639, at *4-6 (6th Cir. Oc t. 30, 1989) (per curiam). Due pr ocess a lso require s notice and a n op p o rt u n ity

to be hea

rd bef ore a court imposes sanctions. See Roadway Express, Inc. v . Piper , 447 U.S. 752, 767, 100 S. C t. 2455, 2464 (1980).Pag e 6 of 8

I t is un c le a r, ho we ve r, wh e the r du e pr oc e ss re qu ir e s bo th a he a ri ng to c on sid e r w he the r t o im po se sanctions and a

separ ate he aringto consider the a mount of the sanc tion. The Six th Circuit Court of Appe als has not direc tly addre ssed this issue. J urisdictions that hav e addre ssed this issue have fo un d th a t du e pr oc e ss i s satis fi e d wh e n the tr ia l c ourt ho lds “ a he a ri ng on the mot ion fo r s a nc tio ns , a t w hic h b oth sid e s a re [pe rm itt e d] to pr e se nt a rgume nts a s to the pr op ri e ty a nd ty pe of sanc tio ns to be aw arde d.” Pesaplastic, C.A. v. Cincinnati Milacron Co. , 799 F.2d 1510, 1522 (11th Cir. 1986);

se e als o United States v. Asay , 61 4 F. 2 d 6 5 5 , 6 58 (9th Cir. 1980) (a war d of expenses base d on aff idavits submit ted af

ter he aringon contempt). Such c ourts have also found t hat a se parate hea ring to determine the amount and scope of the sanc tion a war ded is not nece ssary

. Pesaplastic, 799 F.2d

a t 15 22 ; Oce l o t Oi l C o r p

. v. Sparrow Indus., 84 7 F .2 d 1 45 8, 14 66 (1 0th Cir . 1 98 8) ; but see Mc Fa rla nd v . G re go ry , 4 25 F .2 d 4 43 , 4 49 -5 0 ( 2d Ci r. 1970 ) ( fi nd ingthat du e pr oc e ss r e qu ir e s a hear ing on the amount of attorney fee s when the amount imposed is based on an unit emized or vag ue aff idavit).
Th e ba nk ru ptc y c ourt a ff or de d th e Ap pe lla

nts the fu nd a me nta l r e qu ir e me nts of du e pr oc e ss. The Appe llants ag ree that they had notice a

nd an opportunity to be hear d befor e the court imposed sanctions. A sec ond hear ing to de termine the a mount of the sanction to be imposed wa s n ot

nece ssary so long a s the Appellants we re pr ovided a pr ocedur e for opposing the rea sonablene ss and

c a lc ulatio n o f t

he s anct io n ba se d u

po n atto rn e y

fe e s in c ur

re d. Th e Ap pe lla

nts we re pr ov ide d th is op po rt un ity a nd , in fa c t, su

bmi tte d a n op po sin g a ff

ida vit in re sp on se to the Tr

us te e ’s a ff

ida vit , b oth of which w ere considere d by the bankr

upt cy court. I t is significa

nt that the opposing a ffidavit by Appellants’ c ounsel only

challeng ed the total amount as being unrea sonable but f ailed to spec ify

any particula r time entry

or hourly rate that was inappr opriate or unrea sonable.

A sec ond portion of t h e Ap p el l an t s ’ d u e p ro ce s s ar gu m en t co ncer ns the failure of the bankruptc y court to a

pply the lodestar analy sis to dete rmine the re asonable ness of the f ees inc urre d by the Trustee as is require d in connec tion with applications for fee s broug ht pursuant to s ection 330 of the B ankruptc y

Code. The Appellants’ relianc e upon section 330 is misplaced for a number of

rea sons. Section 330 outlines the require ments for c ompensating office rs of a bankrup t cy

estate. The scope of

section 330 is limit ed to ce rtain prof essionals hired in ac corda nce w ith section 327 of the B ankruptc y

Code. Lamie v. U.S. Trustee , 540 U.S. 526, 534, 124 S. Ct. 1023, 1030 (2004). A debtor’s attorney

not eng ag ed as pr ovided by section 327 i s not included withi n the class of persons elig ible for c ompensation under section 330. One of the re asons for the heig htened sc rutiny of fe e reque sts made pursuant to section 330 is that section 330 authorizes pay ment of fe es fr om the bankruptc y

estate.Pag e 7 of 8

The Appe llants wer e not entitled to the protection of t he procedure s outlined in section 330 of the B a nk ru ptc y Cod e be c a

us e the Tr

us te e wa s n ot a

wa rd e d f e e s a s a pr of e ssi on a l pu

rs ua nt t o
se c ti o n 3 2 7 , b u t a s a s a n c ti o n f o r v io lati n g th e d ir e c ti v e s o f a c o u rt o r d e r

. A d d it io n ally , as the ba nk ru ptc y c ourt no te d, the sanc tio ns in the pr e se nt ca se wi ll not be pa id f ro m th e ba

nk ru ptc y e state of the de bto r, bu t f

ro m th e a sse ts o f t

he Ap pe lla

nts

. Ap pe lla nts a sse rt that th e pr op e r me tho d for c a lc ulatin g a tto rn e y fe e s in a ba nk ru ptc y c a se is the “ lod e sta

r” a na ly sis . T he lod e sta

r m e tho d o f f

e e c a lc ulatio n is u sed to d e te rm ine re a so na ble at t o rn ey fees awa

rded pur suant to fede ral statutes that provide for a war d of attorne y

fee s. See Pe nn sy lv an ia v. De l. Va lle yCiti ze ns ’ C ou nc il f or Cle an Ai r , 483 U.S. 711, 107 S. Ct . 3078 (1987). The lodestar

method is the appropr iate method for deter mining the r easona

bleness of attorney

fee s
awa rded pursuant to section 330 of the B ankruptc y Code. See In re Boddy , 9 50 F .2 d 3 34 , 3 37 (6 th Cir . 1 99 1) . A s sta te d pre vio us ly , h ow e ve r, se c tio n 3 30 is n ot i mpl ic a te d in thi s c a se a nd

the Sixth Circuit has not imposed the lodestar method a s the method for c alculating contempt sanc tions.
Th e re wa s n o e rr or

in t he ba nk ru ptc y c ourt ’s fai lur e to c on du c t a se c on d h e a ri ng or

in i ts fa ilure to u se the lod e sta

r m e tho d to c a lc ulate the sa nc tio n to be imp os e d u

po n th e Ap pe lla

nts

. B. Th e Bankrup tcy C ourt P roperly Re lied Upon Aff idavits in Cons idering the Am ount of Sanction to be Imposed

. Th e Ap pe lla

nts a rgue that it wa s e rr or fo r the ba nk ru ptc y c ourt to r e ly so le ly on the pa rt ie s’

a ff ida vit s in ca lc ulatin g the re a so na ble ne ss of the mon e tary

sanc tio n im

po se d u po n th e m. T he Sixth Circuit has not expl icitly stated whe ther a

trial court may

use only aff idavits t o d et er m i n e the

rea sonablene ss of a moneta ry sanction. I n Jack

son v. Nissan Motor Corpor ation , the cour t analy zed a district cour

t’s assessment of discove ry sanctions based on an af fidavit. Jack

son , 1 9 8 9 WL 128639, at *6. I n that case , the cour t found that the moving party ’s af fidavit did not specify

which amounts it incur

red as a re sult of its m otion for sanc tions or whether the amount re prese nted fe es and costs related to other a spects of the case . Consequently , the court found t hat t he district cour t abused its discretion when it failed to specif y that “the f

ees c laimed wer e limited to those permissible under Rule 37(d).” Id . The c ourt did not address whe ther the district court’s relianc e on the af fidavit was improper. Id

. See also Rolex W atch U.S.A., Inc . v. Crowley , 74 F.3d 716, 722 (6th Cir. 1996) (c ourt of a pp e a ls f ound no e rr or in t he tr ia l c ourt ’s a wa

rd of re a so na ble a tto rn e y

fe e s in c ur

re d in prosec uting c ontempt motion; trial court wa s familiar with the proc eeding s and fe es we re ba sed upon

cou ns el’ s aff

ida vit de sc ri bin g in d e ta il l e g a l se rv ic e s p e rf or me d, ho ur s w or

ke d, a nd ho ur ly rate claimed, a

nd opining the a

mount was rea sonable).Pag e 8 of 8

Fe dera l Rule of Ba

nkruptcy Procedur e 9017 provides that F eder al Rule of Civil P roce dure 43 a pp lie s in c a se s und e r t

he B a nk ru ptc y Cod e . In tu

rn , Ru le 43 (e ) p e rm its mot ion s b a se d o n f a c ts not appea ring of re cord to be hear d on aff idavits presente d by

the par tie s

. Fe d

. R

. C i v . P. 43(e). Although the Six th Circuit has not a ddresse d this issue, other courts of a ppeal have held that a

court may rely on aff idavits “as proof

of the amount to be awar ded.” Se e, e .g ., Sh ipe s v . Tr ini ty

In du s. , 987 F.2d 311, 323–24 ( 5th Cir. 1993). For example, the El eventh Ci rcuit, i n a factually simil ar c ase, explained t h at courts have the power to assess the re asonable ness of a n awa rd of attorney

fee s independe ntly

and may rely on aff idavits to do so. See Pe

sa pla sti c , 7 99 F .2 d at 15 22 . T he El e ve nth Cir c ui ts p e c i f

i c a l l y f o u n d t h a ta c o u rt ’ s r e l i a n c e o n a f

f i d a v i t s a l o n e d o e s n o tv i o l a t e d u e p r o c e ss rig hts. Pesaplastic, 799 F.2d at 1522-24 (holding that relianc e on af fidavits to determine sa

nction amount satisfies due pr ocess; no hearing require d). Simil arly , the Fif th Circuit has held that an aff idavit provides suffic ient proof of the amount to be awa

rded. See Shipe

s , 987 F.2d at 324. The Pane l a g re e s and

ho lds that th e re wa s n o e rr or in t he ba nk ru ptc y c ourt ’s re lia

nc e up on a ff ida vit s.
V. CO NC LU SION
There was no e rror

in the proce dure f

ollowed b y t h e bankruptcy court in dete rmining the

a mou nt o f s a nc tio n to be imp os e d u po n th e App e lla nts . T he or de r o f t

he ba nk ru ptc y c ourt is AF F IR M ED

.