Opinion ID: 3011280
Heading Depth: 1
Heading Rank: 3

Heading: did hellring lindeman receive due process?

Text: We now turn to the constitutional adequacy of the proceeding in the Bankruptcy Court. Hellring Lindeman alleges that the Bankruptcy Court did not provide it with adequate notice and opportunity to be heard pursuant to the Due Process Clause when, during the fee application hearing, the Bankruptcy Court sua sponte raised doubts about awarding a fee to Hellring Lindeman. Hellring Lindeman argues that the timing of this notice did not afford it the time needed to prepare an answer to the Bankruptcy Court's position. For example, Hellring Lindeman cites the fact that David Wolff of Hellring Lindeman erroneously informed the Bankruptcy Court during the hearing that Hellring Lindeman had not submitted a reorganization plan. _________________________________________________________________ 5. Given the curious structure of the statute and the product of the debtor, we cannot help but be reminded of an admonition often attributed to Bismarck that No man should see how laws or sausages are made. See Community Nutrition Institute, et al. v. Block, 749 F.2d 50, 51 (D.C. Cir. 1984) (Scalia, J.). 12 Our examination of the record does not, however, bear out the contention that Hellring Lindeman did not have an opportunity to present to the Bankruptcy Court the extent to which Hellring Lindeman's services benefitted the estate. At the hearing, the Bankruptcy Judge expressed her concerns that Hellring Lindeman's efforts had not benefitted the estate and questioned Wolff about this: [O]ne of my concerns in the [Chapter] 11-- and I'm not sure it was fully addressed -- is the bottom line, you guys represented a debtor-out-of-possession. Why am I compensating you at all for the estate if I can't discern any benefit? And I don't mean to be cutting you off at the knees but if my whole concern is benefit, so what did you guys do for me so-to-speak JA at A-221. Wolff discussed the services rendered by Hellring Lindeman, including the mistaken representation that it had not submitted a reorganization plan, and concluded by saying, But with that, I'm finished, Your Honor. JA at A-225. Hellring Lindeman did not attempt to correct the erroneous statement about the reorganization plan during the intervening 37-day period before the Bankruptcy Court issued its ruling; nor did Hellring Lindeman ask for the opportunity to expand upon the explanation of benefit given by Wolff at the fee hearing. We have previously noted that the bankruptcy court has the power and the duty to review fee applications, notwithstanding the absence of objections by the United States trustee . . . creditors, or any other interested party . . . . In re Busy Beaver Bldg. Centers, Inc., 19 F.3d 833, 848 (3d Cir. 1994). See 11 U.S.C. S 330(a)(2) (The [bankruptcy] court may, on its own motion . . . award compensation that is less than the amount of compensation that is requested.). We further noted that the Code, see SS 329(b), 330(a); see also Rule 2017(b) -- and perhaps even the dictates of due process, see U.S. CONST., amend. V -- mandates that the court allow the fee applicant an opportunity, should it be requested, to present evidence or argument that the fee application meets the prerequisites for compensation; canons of fairness militate against forfeiture of the requested fees simply because the court's 13 audit of the application uncovers some ambiguity or objection. Busy Beaver, 19 F.3d at 846. In Busy Beaver, the Bankruptcy Court sua sponte, issued an order denying compensation for certain services performed by paraprofessionals . . . . Id. at 838. The aggrieved attorney did not have an opportunity to argue on his behalf until he filed a motion for reconsideration. Here, when faced with the Bankruptcy Court's objection to its fee, Hellring Lindeman could have requested additional time to prepare an answer to the objections. It did not do so. Nor, did Hellring Lindeman request a further hearing. In Busy Beaver, we stressed that a hearing should be held when requested. Id. Although Hellring Lindeman had ample time to correct the record or request a follow-up hearing, it chose not to do so. Accordingly, Hellring Lindeman cannot now demonstrate that it was not afforded due process.