Court Opinion

ID: 9452786
Source: CourtListenerOpinion
Date Created: 2023-08-04 17:51:58.886222+00
Date Added: 2024-06-11T17:33:21.425171
License: Public Domain

MERRILL, Circuit Judge
(dissenting) :
I dissent.
It is abundantly clear that the referee and the District Court have given full consideration to all relevant factors in fixing the fee in question. The majority simply disagrees as to the manner in which those factors have been balanced against each other.
It is upon such issues that reviewing courts, even while disagreeing with the court below, traditionally choose to defer to the lower court’s judgment in its exercise of discretion. I would say that with reference to the weight to be given to the economical spirit of the Bankruptcy Act there are particularly impelling reasons for such deference. A balance must be struck between two competing interests: that the cost of bankruptcy should not itself consume the very res the proceedings are designed to protect; and that fees allowed be such as not to discourage competent counsel from active and effective participation. The local referee and judge are certainly best able to fix upon a fair balancing of these interests, and to ascertain the degree to which reduced fees may affect the ability to secure the services of competent counsel under the circumstances existing in the community.
Further, while the majority has emphasized the economical spirit of the Bankruptcy Act as the apparent basis for reduction of fees, it is clear that the size of the estate involved was of significant concern to both referee and District Court. Fees as requested would raise the expense of administration of this estate to 38.5 per cent of recovery.
The majority seems to overlook the fact that where services are rendered to an estate from which compensation is to come, the modest proportions of the estate, if it is decently to survive administration, frequently compel the allowance of fees which under other circumstances would be regarded as wholly inadequate. It would be a reflection upon the ability of courts to engage in the administration of estates if the costs of court administration were such as to require undue depletion of the estate administered. If attorneys, as private practitioners, are to participate in such administration, they should be prepared to accept the fact that schedules regulating their voluntary fixing of charges may be found inappropriate in light of the size of the estate involved.
For these reasons I would affirm the District Court.