Opinion ID: 460232
Heading Depth: 2
Heading Rank: 2

Heading: Fee Petitions and Fee Awards

Text: 10 Fee petitions for services rendered on behalf of entities which filed for bankruptcy before enactment of the Bankruptcy Reform Act of 1978 must be approved by the reorganization court under former section 77 of the Bankruptcy Act of 1898, 11 U.S.C. Sec. 205. Section 77(c)(2) provides that [t]he trustee or trustees and their counsel shall receive only such compensation from the estate of the debtors the judge may from time to time allow within such maximum limits as may be approved by the [Interstate Commerce Commission (ICC) ] as reasonable. There is similar language in section 77(c)(12), providing that reasonable attorney's fees may be awarded by the reorganization judge within maximum limits fixed by the ICC. Although section 77(c) entrusts the final determination of the fee to the court supervising the reorganization, the ICC's findings of fact, if supported by evidence, may not be disturbed by a court. Reconstruction Finance Corporation v. Bankers Trust Co., 318 U.S. 163, 170, 63 S.Ct. 515, 519, 87 L.Ed. 680 (1943); see also In re Boston & Providence Railroad Corp., 428 F.2d 159, 161 (1st Cir.1970). 11 On February 4, 1981, Moore filed a fee petition for $269,901.27 for services rendered between January and September 1980 in connection with the labor arbitration proceedings (First Petition). 4 As required, the ICC examined the fee petition and approved the full amount requested in May 1981. The court held a hearing on June 30, 1981, but it did not act on the petition until October 1984. Apparently advised by B & M that there would be no interim billing, and on the understanding that this policy was in keeping with the wishes of the Court, Moore did not file a petition for services rendered between October 1980 and July 1982 in the Lenfest litigation 5 and DPU proceedings 6 until February 1, 1983 (Second Petition). On May 19, 1983, the ICC also approved the full amount requested as the maximum compensation that was reasonable. The district court issued a series of orders between October 26, 1984 and December 28, 1984 concerning the Second Petition. In June 1983, Moore also filed a supplemental petition requesting compensation for delay in payment of the amounts requested in his First Petition, and in July 1984, requested compensation for delay with regard to both his First and Second Petitions. 12 In the meantime, in an order dated January 19, 1982, the district court sua sponte vacated earlier orders authorizing the appointment of counsel because of technical defects in their authorization. After petitioner and other law firms that had rendered services to B & M filed a writ of mandamus to this court, we confirmed the appointment of counsel, to be effective as of the date work was assigned to them. See In re Certain Special Counsel to the Boston & Maine Corp., 737 F.2d 115 (1st Cir.1984). We also required the district court to determine the amount of reasonable compensation for the already filed fee petitions within four months from the date of the opinion--that is, by October 12, 1984. Hearings on Moore's fee petitions were then held on August 15, 1984. 13 On October 14, 1984, the court issued a memorandum awarding $219,901.23 of the $269,901.27 fees and expenses requested for services rendered during the arbitration proceedings, and denying any compensation for delay in payment. See In re Boston & Maine Corp., 46 B.R. 974 (Bankr.D.Mass.1984). In reducing attorney fees from $238,482.50 to $193,200, the court cut both attorney hours from 2450.5 to 2100 because of the distinct impression ... that there was duplication of effort, that there was overstaffing, and that excessive hours were claimed, and the average hourly rate from $97.32 to $92.00 per hour, noting that associates could have been assigned work which was performed by a partner. The court also granted the full $6,335 for paralegal services and $20,366.23 of the requested $25,083.77 for reimbursement of expenses. 14 As for services rendered in the Lenfest litigation, the court in its October 25, 1984 memorandum awarded only $60,000 of the $149,550 requested attorney fees (equalling 1210.75 hours of attorney time billed at an average hourly rate of $123.52). See In re Boston & Maine Corp., 46 B.R. 987 (Bankr.D.Mass.1984). Although the court did not specify how it arrived at the reduced figure, it stated that the litigation had been neither complex nor risky, and criticized what it perceived as duplicative efforts by the seven attorneys who worked on the case. In a later order, the court granted $3,928.75 of the claimed $6,488.75 for 179 hours of paralegal time, and reimbursed $7,932.63 of the requested $11,033.87 in expenses. 15 In an order dated December 28, 1984, the court awarded Shea for services provided during the DPU proceedings attorney fees in the amount of $76,705, reduced from $125,585.75, as well as $1,585.88 of the requested $3,176.26 in paralegal fees. The court also reimbursed $1,505.53 of the requested $2,874.63 for expenses. In its most detailed analysis of a fee petition, the court disclosed in a January 22, 1985 memorandum that it cut 353.5 hours from the requested 1020.5 hours of attorney time and reduced the average hourly rate from the requested $123.06 to $115 per hour for duplicative efforts by counsel and for insufficient documentation of certain hours. See In re Boston & Maine Corp., 46 B.R. 990, 996-1001 (Bankr.D.Mass.1985). 16 In total, the court awarded $219,901.23 of the $269,901.27 requested in the First Petition, and $226,623.69 of the $375,691.92 claimed in the Second Petition, resulting in a total reduction of 30 percent from $645,593.19 to $446,524.92. 7 Moore and his firm now appeal from these rulings.