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Section 502 Allowance of claims or interests (Judge Gargotta)

In re Seda France (July 22, 2011)
Issue: Whether an unsecured creditor is entitled to attorneys’ fees under a confirmed Chapter 11 plan that pays creditors in full?
Holding: The Court finds that unsecured creditors have no clear entitlement to post-petition attorneys’ fees under the Bankruptcy Code. Allowing certain types of unsecured creditors, such as sophisticated commercial claimants, to recover post-petition attorneys’ fees while other unsecured creditors are not able to recover such fees violates a central purpose of the bankruptcy system to secure equality among the creditors of a bankrupt party. Moreover, allowing unsecured creditors to recover post-petition attorneys’ fees negatively impacts and inconveniences the administration of bankruptcy cases. Aegis’ claim for attorneys’ fees is DENIED.

In re Boulder Crossroads (December 1, 2010)
Issue: (1) Whether Creditor (a Nevada law firm) should be disallowed its fees for failure to provide Debtor Boulder Crossroads with reasonable value; (2) whether Creditor’s fees should be disallowed due to alleged conflicts of interest; and (3) whether the application of a deposit paid by Debtor to outstanding attorney’s fees was a violation of the automatic stay?
Holding: (1) The reasonable value should be analyzed under both the state’s rules of professional conduct (if applicable) and a federal reasonableness scrutiny. The attorney bears the burden of establishing the reasonableness of their fees in this case. The Court finds that creditor has met its burden to prove that its’ fees are reasonable under Nevada and federal standards. (2) The Court finds there was no conflict of interest to warrant a disgorgement or disallowance of Creditor’s fees. (3) Portions of a retainer earned prepetition are not property of the estate. Therefore, the application of the retainer to outstanding debt was not a violation of the automatic stay. Debtor’s Objection to Claim of Creditor is DENIED.

In re Crescent Resources LLC (September 26, 2012)
Issue: (1) Did summary judgment movant, Rim Club Trust, meet its burden in showing that one of Rim Club Trust’s creditors properly released the Trust of its secured obligation?
Holding: Finding that movant met its initial burden showing no genuine issues of material fact, the nonmoving party provided insufficient evidence to show that a rational trier of fact could find that the nonmovant did not release Rim Club Trust of its secured obligation. Summary judgment granted.