Court Opinion

ID: 9373971
Source: CourtListenerOpinion
Date Created: 2023-02-22 16:10:52.732682+00
Date Added: 2024-06-11T17:16:49.880826
License: Public Domain

FILED
                                                                                MAR 22 2022
                                                                            SUSAN M. SPRAUL, CLERK
                          NOT FOR PUBLICATION                                 U.S. BKCY. APP. PANEL
                                                                              OF THE NINTH CIRCUIT

           UNITED STATES BANKRUPTCY APPELLATE PANEL
                     OF THE NINTH CIRCUIT

In re:                                               BAP No. OR-21-1118-GBS
PETER SZANTO,
             Debtor.                                 Bk. No. 3:16-bk-33185-PCM

PETER SZANTO,
             Appellant,
v.                                 MEMORANDUM*
CANDACE AMBORN, Chapter 7 Trustee;
LANE POWEL PC,
             Appellees.

               Appeal from the United States Bankruptcy Court
                          for the District of Oregon
               Peter C. McKittrick, Bankruptcy Judge, Presiding

Before: GAN, BRAND, and SPRAKER, Bankruptcy Judges.

                                 INTRODUCTION

       Chapter 71 debtor Peter Szanto (“Debtor”) appeals the bankruptcy

court’s order awarding final professional compensation to Lane Powell PC

(“Lane Powell”), in the amount of $14,551.88, for services rendered to the

       *
         This disposition is not appropriate for publication. Although it may be cited for
whatever persuasive value it may have, see Fed. R. App. P. 32.1, it has no precedential
value, see 9th Cir. BAP Rule 8024-1.
       1 Unless specified otherwise, all chapter and section references are to the

Bankruptcy Code, 11 U.S.C. §§ 101–1532.
estate in connection with litigation in Singapore. The bankruptcy court did

not abuse its discretion. We AFFIRM.

                                        FACTS 2

      In 2016, Debtor filed a voluntary chapter 11 petition. In 2017, the

bankruptcy court converted the case to one under chapter 7 and appointed

Stephen P. Arnot, later succeeded by Candace Amborn, as chapter 7 trustee

(collectively “Trustee”).

      Around the time of conversion, Debtor made numerous transfers of

estate assets, including transfers of significant funds to banks in Singapore.

After an evidentiary hearing, the bankruptcy court issued an order holding

Debtor in contempt and requiring him to turn over the transferred assets

and to grant Trustee access to the Singapore accounts. Debtor refused to

comply, resulting in two additional contempt orders and, ultimately, a

denial of Debtor’s discharge.

       Because Debtor continued to resist Trustee’s efforts to recover the

transferred funds, Trustee initiated a proceeding in Singapore to enforce

the bankruptcy court’s orders (the “Singapore Action”). The bankruptcy

court then authorized Trustee to employ David W. Criswell of Lane Powell

to serve as an expert witness in the Singapore Action.

       Debtor sought to disqualify Mr. Criswell on the basis that he could

receive duplicate compensation and was not qualified to render an expert

      2
         We exercise our discretion to take judicial notice of documents electronically
filed in Debtor’s bankruptcy case. See Atwood v. Chase Manhattan Mortg. Co. (In re
                                            2
opinion in the Singapore Action. The bankruptcy court disagreed, holding

that Mr. Criswell’s qualification was an issue for the Singapore court and

the danger of duplicate compensation could be addressed in the final

application for compensation.

       Mr. Criswell prepared and filed his expert opinion in the Singapore

Action to address specific questions, posed by the Singapore court, about

United States bankruptcy law. In February 2021, Lane Powell filed an

application in the bankruptcy court for final compensation.

       Debtor objected to the requested fees and argued that Lane Powell

was barred from seeking compensation in the bankruptcy court because

none of its work occurred in the bankruptcy case and any fees must be

awarded by the Singapore court. Debtor characterized the application as

“replete with non-existent garbage charges” but did not otherwise identify

objectionable fees.

       The bankruptcy court issued a memorandum decision and order

approving Lane Powell’s fees and costs in the amount requested. The court

overruled Debtor’s objections and independently found that the fees were

reasonable and necessary under § 330(a). Debtor timely appealed.

                                   JURISDICTION

       The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334 and

157(b)(2)(A) and (B). We have jurisdiction under 28 U.S.C. § 158.

Atwood), 293 B.R. 227, 233 n.9 (9th Cir. BAP 2003).
                                             3
                                    ISSUE

      Did the bankruptcy court abuse its discretion in its award of fees and

costs to Lane Powell?

                         STANDARD OF REVIEW

      We review a bankruptcy court’s order awarding compensation to an

estate professional under § 330 for abuse of discretion. Hopkins v. Asset

Acceptance LLC (In re Salgado-Nava), 473 B.R. 911, 915 (9th Cir. BAP 2012). A

bankruptcy court abuses its discretion if it applies an incorrect legal

standard or its factual findings are illogical, implausible, or without

support in the record. TrafficSchool.com v. Edriver, Inc., 653 F.3d 820, 832 (9th

Cir. 2011).

                                DISCUSSION

A.    Standards For Compensation Under § 330

      Section 327 authorizes a trustee, with the court’s approval, to employ

professional persons “to represent or assist the trustee in carrying out the

trustee’s duties” under the Bankruptcy Code. Pursuant to § 330(a), the

bankruptcy court may award reasonable compensation to professionals

employed under § 327 after considering the nature, extent, and value of

such services and the factors listed in § 330(a)(3)(A)-(F). The court may not

award compensation for an unnecessary duplication of effort, or for

services which are not reasonably likely to benefit the estate or are

unnecessary for case administration. § 330(a)(4)(A).

                                        4
      A party objecting to an application for compensation under § 330 has

the burden to show that fees are unreasonable or unnecessary and must do

more than express general dissatisfaction with the application; he must

specify what tasks are objectionable. See Koncicky v. Peterson (In re Koncicky),

BAP No. WW-07-1170-MkPaJ, 2007 WL 7540997 (9th Cir. BAP Oct. 19,

2007).

B.    The Bankruptcy Court Did Not Abuse Its Discretion By Awarding
      Compensation To Lane Powell.

      Debtor does not object to the amount of fees or identify any work that

was unreasonable. Instead, he argues that Lane Powell is not entitled to

any compensation because: (1) the Singapore Action was barred by

Singapore law and Mr. Criswell’s services were useless; and (2) the

bankruptcy court lacked jurisdiction to award fees or costs because the

Singapore court had sole authority to compensate Mr. Criswell.

      We agree with the bankruptcy court that the propriety of the

Singapore Action and Mr. Criswell’s qualifications to render an expert

opinion are questions for the Singapore court. It is immaterial that Mr.

Criswell’s services were not in connection with litigation in the bankruptcy

court. Trustees often must litigate in state or federal courts on behalf of the

estate, and professionals employed to assist in such litigation are

compensated under § 330(a). See Roberts, Sheridan & Kotel, P.C. v. Bergen

Brunswig Drug Co. (In re Mednet), 251 B.R. 103, 108 (9th Cir. BAP 2000)

(“[I]n order for the professional to be compensated . . . the applicant must

                                       5
demonstrate only that the services were ‘reasonably likely’ to benefit the

estate at the time the services were rendered.”).

      The bankruptcy court correctly determined that Mr. Criswell’s efforts

were necessary and reasonably likely to benefit the estate. Trustee initiated

the Singapore Action because Debtor transferred estate assets to Singapore

and refused to comply with multiple court orders to return the funds. And

the court properly authorized Trustee to employ Lane Powell to assist in

recovering estate assets.

      Debtor further argues that the bankruptcy court lacked jurisdiction

to approve Lane Powell’s fees because Singapore law provides that

payment must be made by the Singapore court. We disagree.

      The bankruptcy court had exclusive jurisdiction to authorize Lane

Powell’s employment. 28 U.S.C. § 1334(e)(2). Consequently, Lane Powell

could recover fees for its services to the estate only in accordance with the

provisions of the Bankruptcy Code. See McCutchen, Doyle, Brown & Enersen

v. Off. Comm. of Unsecured Creditors (In re Weibel, Inc.), 176 B.R. 209, 212 (9th

Cir. BAP 1994) (“Compensation to professionals acting on behalf of the

estate must be based on provisions of the Code.”). Lane Powell complied

with the procedural requirements for employment and compensation, and

pursuant to § 330, the court had authority to approve Lane Powell’s fees

and costs.

                                        6
      Debtor’s only support for his jurisdiction argument is Order 40 of the

Singapore Rules of Court.3 But, the Singapore court specifically rejected the

applicability of that rule because Mr. Criswell was not a “court expert” and

his opinion was provided under Order 40A: Experts of Parties. See

Application for Interim Comp., March 8, 2021. Both the application to employ

Lane Powell and Mr. Criswell’s affidavit in the Singapore Action indicate

that he was an expert witness for Trustee, not a court expert.

                                  CONCLUSION

      Based on the foregoing, we AFFIRM the bankruptcy court’s order

approving final professional compensation to Lane Powell.

      3
         Order 40 provides in pertinent part:
        Appointment of expert to report on certain question (O. 40, r.1)
        1.     (1) In any cause or matter in which any question for an expert
        witness arises, the Court may at any time, on its own motion or on the
        application of any party, appoint an independent expert . . .
               (1A) An expert appointed under this Order or under Order 32, Rule
        12 shall be referred to as a court expert.
                ...
        Remuneration of court expert (O. 40, r.5)
        5.     (1) The remuneration of the court expert shall be fixed by the Court
        and shall include a fee for his report and a proper sum for each day
        during which he is required to be present either in Court or before an
        examiner.
Rules of Court, Order 40 rules 1, 5, available at Singapore Statutes Online,
https://sso.agc.gov.sg/SL/322-R5?ProvIds=PO40-pr1-,PO40-pr5- (last visited Mar. 22,
2022).

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