In re: CHAMPION MANUFACTURING INDUSTRIES, INC. Chapter 11, Debtor.
Case No. 09 B 22027.United States Bankruptcy Court, N.D. Illinois, Eastern Division.
June 9, 2010
FINDINGS OF FACT AND CONCLUSIONS OF LAW IN SUPPORT OF ORDER AWARDING TO K L GATES LLP ATTORNEYS FOR DEBTOR FOR ALLOWANCE AND PAYMENT INTERIM COMPENSATION AND REIMBURSEMENT OF EXPENSES
EUGENE WEDOFF, Bankruptcy Judge
TOTAL FEES REQUESTED: $50,105.00 TOTAL COSTS REQUESTED: $1,992.96
TOTAL FEES REDUCED: $1,634.00 TOTAL COSTS REDUCED: $699.03
TOTAL FEES ALLOWED: $48,471.00 TOTAL COSTS ALLOWED: $1,293.93
TOTAL FEES AND COSTS ALLOWED: $49,764.93
The attached time and expense entries have been underlined to reflect disallowance in whole or in part. The basis for each disallowance is reflected by numerical notations that appears on the left of each underlined entry. The numerical notations correspond to the enumerated paragraphs below.
(1) Clerical Work Not Compensable
The court disallows the compensation of clerical or stenographic employees of the professional for the performance of routine clerical or administrative activities in the normal course of the professional’s business, such as photocopying, secretarial work, or routine filing. Such activities are not in the nature of professional services and must be absorbed by the applicant’s firm as an overhead expense. In re Dimas, LLC, 357 B.R. 563, 577 (Bankr. N.D. Cal. 2006) (citing Missouri v. Jenkins, 491 U.S. 274, 288 n. 10 (1989)). See also In re Chellino, 209 B.R. 106, 114 (Bankr. C.D. Ill. 1996) (Paralegal, but not “clerk” services entitled to compensation at an hourly rate; clerk activities are overhead of the professional); Souza v. Miguel, 32 F.3d 1370, 1375 (9th Cir. 1994) (Trustee not entitled to reimbursement or compensation of overhead expenses such as secretarial, stenographic, clerical, and routine messenger services).
(2) Lumping
The Court may impose a ten percent penalty for “lumping.” In re Wildman, 72 B.R. 700, 709 (Bankr. N.D. Ill. 1987) (“Applicants may not circumvent the minimum time requirement or any of the requirements of detail by “lumping” a bunch of activities into a single entry, [citation omitted]. Each type of service should be listed with the corresponding specific time allotment.”).
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(3) Overhead Costs are Non-Compensable
The Court denies reimbursement for fees or expenses that are overhead costs. Expenses which are overhead are not compensable because they are built into the hourly rate. See In re Wildman, 72 B.R. 700, 731 (Bankr. N.D. Ill. 1987). Overhead, for bankruptcy purposes, includes “all continuous administrative or general costs or expenses incident to the operation of the firm which cannot be attributed to a particular client or cost.” In re Convent Guardian Corp., 103 B.R. 937, 939-40 (Bankr. N.D. Ill. 1989) (quoting In re Thacker, 48 B.R. 161, 164 (Bankr. N.D. Ill. 1985)).
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K L|GATES
DATE NAME HOURS DESCRIPTION AMOUNT
02/24/10 M. E. McClintock 1.30 Conference with Sarah Bryan in 481.00
advance of hearing on bar date
motion, plan motion, and cash
collateral use (0.2); follow-up on
inquiries from UST’s office (0.7);
multiple correspondence with
Anne Fox and Sarah Bryan
regarding same (0.4)
02/25/10 T Gomez 2.60 Update critical dates list (0.9); 494.00
prepare for service of bar date
notice on all creditors (1.7)
03/01/10 T Gomez 0.70 Coordinate service of bar date 133.00
notice (0.7)
03/02/10 T Gomez 0.60 Prepare and file certificate of 114.00
Service Regarding Notice of Bar
Dates for Filing Proofs of Claim
(0.6)
03/09/10 M. E. McClintock 0.40 Review corrective entry and 148.00
issues associated with proper
docketing of order (0.2); review
docket regarding case activity
and status (0.2)
03/18/10 T Gomez 0.60 Finalize and file certification of 114.00
publication (0.6)
03/24/10 T Gomez 0.40 File second supplemental 76.00
declaration of Matthew
McClintock (0.4)
03/29/10 M. E. McClintock 0.40 Address property issues relating 148.00
to Peoria county taxes (0.4) ____________
TOTAL FEES 12.50 hrs $ 3.428.50
____________
S Bryan 3.70 hrs at 285 $/hr $1,054.50
T Gomez 4.90 hrs at 190 $/hr $931.00
M. E. McClintock 3.90 hrs at 370 $/hr $1,443.00
____________
TOTAL FEES 12.50 hrs $ 3.428.50
____________
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K L Gates Fee Applications (2004)
FEES
DATE NAME HOURS DESCRIPTION AMOUNT
02/03/10 S Bryan 0.20 Review exhibit to fee application 57.00
to ensure compliance with detail
requirement (0.2)
02/26/10 S Bryan 1.00 Draft K L Gates second interim 285.00
fee application (1.0)
03/01/10 S Bryan 1.30 Draft K L Gates second interim 370.50
fee application (1.3)
03/02/10 S Bryan 0.70 Draft K L Gates second interim 199.50
fee application (0.7)
03/05/10 S Bryan 0.20 Revise second interim fee 57.00
application of K L Gates (0.2)
03/09/10 S Bryan 0.30 Review exhibit to fee application 85.50
to ensure compliance with detail
requirement (0.3)
03/15/10 S Bryan 0.40 Finalize K L Gates fee 114.00
application (0.2); coordinate
filing of same (0.1); e-mail
correspondence to Mike Lax
regarding same (0.1)
03/15/10 T Gomez 2.90 Assist with filing, service, and 551.00
notice of (I) K L Gates second
interim fee application; and (II)
Legacy Advisor’s fourth interim
fee application (2.9)
03/22/10 J Heller 0.30 Draft supplemental affidavit 85.50
regarding Legacy retention (0.3) ____________
TOTAL FEES 7.30 hrs $ 1,805.00
____________
S Bryan 4.10 hrs at 285 $/hr $1,168.50
T Gomez 2.90 hrs at 190 $/hr $551.00
J Heller 0.30 hrs at 285 $/hr $85.50
____________
TOTAL FEES 7.30 hrs $ 1.805.00
____________
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DATE NAME HOURS DESCRIPTION AMOUNT
02/16/10 S Bryan 2.00 Conference with Matt 570.00
McClintock regarding plan (0.5);
draft same (1.3); review e-mail
correspondence regarding same
(0.2)
02/16/10 M. E. McClintock 2.60 Begin to draft plan of 962.00
reorganization (and contemplate
and research associated issues)
(2.4); telephone conversation
with Ron Stacey regarding
same (0.2)
02/17/10 M. E. McClintock 1.70 Review and revise motion to 629.00
extend time to file plan (1.5); e-
mail correspondence to Steve
Wallce (Bank counsel)
regarding same (0.2)
02/18/10 S Bryan 0.60 Review and revise motion to 171.00
extend exclusivity (0.5);
coordinate filing of same (0.1)
02/18/10 T Gomez 1.30 Assist with filing, service, and 247.00
notice of motion to extend
exclusive period (1.3)
02/19/10 S Bryan 0.30 Draft plan (0.3) 85.50
02/22/10 S Bryan 3.20 Work on plan of reogranization 912.00
(3.2)
02/24/10 S Bryan 0.30 Revise bar date notice (0.2); 85.50
correspondence with Teresa
Gomez regarding same (0.1)
02/25/10 S Bryan 0.80 Revise bar date notice (0.2); 228.00
conference with Teresa Gomez
regarding service of same (0.2);
e-mail correspondence to Anne
Fox regarding publication of bar
date notice (0.4)
02/26/10 S Bryan 0.40 Telephone call to Irwin Dinn 114.00
regarding subrogation
agreement (0.1); telephone
conference with Irwin Dinn
regarding same (0.1); e-mail
correspondence to Mike Lax
regarding amount of secured
claim (0.1); e-mail
corresondence to debtor and
financial advisors regarding
recently entered orders on bar
date, plan filing, and cash
collateral (0.1)
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Claims (00013)
FEES
DATE NAME HOURS DESCRIPTION AMOUNT
02/08/10 M. E. McClintock 0.30 Multiple e-mail correspondence 111.00
with Sarah Bryan regarding bar
date issues and timing (0.3)
02/09/10 S Bryan 3.50 Draft motion to set bar date 997.50
(3.3); conference with Matt
McClintock regarding strategy
going forward (0.2)
02/10/10 S Bryan 0.70 Telephone conference with 199.50
Peoria County Tax Office
regarding sale of property taxes
(0.1); e-mail correspondence
with Anne Fox and Matt
McClintock regarding same
(0.1); draft correspondence to
county clerk regarding same
(0.5)
02/15/10 T Gomez 1.10 Assist with filing and service of 209.00
motion to establish bar date
(1.1)
02/15/10 M. E. McClintock 0.70 Review and revise bar date 259.00
motion and coordinate filing of
same (0.7)
02/23/10 S Bryan 0.10 E-mail correspondence to Anne 28.50
Fox regarding publication of bar
date notice (0.1)
03/01/10 M. E. McClintock 0.40 Review and revise bar date 148.00
notice (0.4)
03/17/10 S Bryan 0.30 Draft certificate of publication 85.50
(0.3)
03/29/10 S Bryan 0.20 Finalize letter to Peoria County 57.00
regarding tax notice and
property sale (0.2) ____________
TOTAL FEES 7.30 hrs $ 2,095.00
____________
S Bryan 4.80 hrs at 285 $/hr $1,368.00
T Gomez 1.10 hrs at 190 $/hr $209.00
M. E. McClintock 1.40 hrs at 370 $/hr $518.00
____________
TOTAL FEES 7.30 hrs $ 2,095.00
____________
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Expenses (00015)
FEES
TOTAL FEES 0.00 hrs $ 0.00
____________
TOTAL FEES 0.00 hrs $ 0.00
____________
DISBURSEMENTS AND OTHER CHARGES
04/12/10 Telephone / Conference Calls / Fx Line Trans 0.25
04/30/10 Telephone / Conference Calls / Fx Line Trans 0.90
04/30/10 Postage 184.22
04/30/10 Copying Expense 365.00
04/30/10 Westlaw — SCB — 04/29/2010 — 04/30/2010 USER DEFINED 1: 519.28
BRYAN, SARAH
04/30/10 Westlaw — JDH — 04/30/2010 — 04/30/2010 USER DEFINED 1: 179.75
HELLER, JEFF
DISBURSEMENTS OTHER CHARGES $ 1,249.40
____________
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