Opinion ID: 496735
Heading Depth: 2
Heading Rank: 3

Heading: Authorization of $10,000 Advance of Out-of-Pocket Expenses and Payment of Later Costs

Text: 24 Cluett contends that the provision of the bankruptcy court order authorizing an advance of $10,000 from the debtor Lytton's estate for attorney Beigel's out-of-pocket expenses and the payment of later costs was a final order. 8 As with the contingent fees, however, attorney Beigel must apply to the bankruptcy court for payment of expenses and later costs. 11 U.S.C. Secs. 330(a), 331; Bankr.R. 2002. The bankruptcy court has the power to order Beigel to return any money advanced by the debtor Lytton's. Cf. In re Callister, 673 F.2d 305, 307 (10th Cir.1982) (Interim awards ... are refundable to the estate in cases of misconduct.). There is a further check on payment of this advance, because the provision explicitly states that Beigel must account for all costs advanced. This advance is not a final application for payment of expenses and is therefore interlocutory. See id. 25 Cluett argues that In re UNR Industries, Inc., 736 F.2d 1136, 1137-38 n. 2 (7th Cir.1984), is analogous to this case and supports its position that this provision regarding the advance of out-of-pocket expenses was final. In UNR Industries, this court determined that an order authorizing the debtor to pay court reporters, interpreters, and translators employed in the discovery process of litigation was a final order. Cluett contends that this case is similar because Beigel will presumably spend the advance to finance discovery activities. That Beigel will use the advance to pay for discovery is, however, only Cluett's presumption. Furthermore, UNR Industries is distinguishable because the discovery was finished, and there was no chance of further request for expenses associated with that discovery. See UNR Industries, 736 F.2d at 1137-38. In this case, Beigel has only begun his work and will return to the bankruptcy court to seek payment for other expenses. We believe this provision has more the character of the interim order to pay costs, which is not appealable, than of the final order to pay costs, which the court in UNR Industries determined was appealable. Beigel will have to go through the process set forth in the bankruptcy code, justifying his costs, before the amounts are approved by the court. 26 The bankruptcy court order also authorizes payment of Beigel's later costs. This authorization has more the character of an interim order to pay costs than does the advance. See Callister, 673 F.2d at 306-07. Cluett suggests that the bankruptcy court order constitutes a blank check for payment of future costs, but Beigel again must account for these costs, and must apply to the bankruptcy court, which involves notice to creditors and a hearing. Thus there are checks on the payment of expenses. 9