In re: UBM, INC., Chapter 7, Debtor.
Case No. 06 B 17219.United States Bankruptcy Court, N.D. Illinois, Eastern Division.
May 26, 2010
FINDINGS OF FACT AND CONCLUSIONS OF LAW IN SUPPORT OF ORDER AWARDING TO MUCH SHELIST DENENBERG AMENT RUBENSTEIN, P.C., ATTORNEYS FOR THE CHAPTER 7 TRUSTEE, FOR ALLOWANCE AND PAYMENT OF INTERIM COMPENSATION AND REIMBURSEMENT OF EXPENSES
EUGENE WEDOFF, Bankruptcy Judge
TOTAL FEES REQUESTED: $110,294.00 TOTAL COSTS REQUESTED: $2,978.16
TOTAL FEES REDUCED: $3,725.00 TOTAL COSTS REDUCED: $147.48
TOTAL FEES ALLOWED: $106,569.00 TOTAL COSTS ALLOWED: $2,830.68
TOTAL FEES AND COSTS ALLOWED: $109,399.68
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) Trustee Work Can Not Be Compensated As Professional Services
“The Trustee cannot effectively expand the maximum limits of Section 326(a) by hiring other people to perform his duties for him, whether they are paralegals, attorneys, accountants or other professional persons, and utilize the potentially unlimited scope of Section 330 as a basis for award of reasonable compensation.”Boldt v. United States Trustee (In re Jenkins), 130 F.3d 1335, 1341 (9th Cir. 1997) (quoting In re Prairie Cent. Ry. Co., 87 B.R. 952, 959 (Bankr. N.D. Ill. 1988)).
(2) 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)).
(3) 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).
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(4) Unreasonable Time
The Court denies the allowance in part of compensation for the following task since the professional or paraprofessional expended an unreasonable amount of time on this task in light of the nature of the task, the experience and knowledge of the professional performing the task, and the amount of time previously expended by the professional or another on the task In re Pettibone, 74 B.R. 293, 306 (Bankr. N.D. Ill. 1987) (“The Court will determine what is the reasonable amount of time an attorney should have to spend on a given project . . . An attorney should not be rewarded for inefficiency. Similarly, attorneys will not be fully compensated for spending an unreasonable number of hours on activities of little benefit to the estate.”); In re Wildman, 72 B.R. 700, 713 (Bankr. N.D. Ill. 1987) (same).
(5) 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.”).
(6) Insufficient Description
The Court denies the allowance of compensation for the following task since the description of the time entry fails to identify in a reasonable manner the service rendered. In re Pettibone, 74 B.R. 293, 301 (Bankr. N.D. Ill. 1987) (“A proper fee application must list each activity, its date, the attorney who performed the work, a description of the nature and substance of the work performed, and the time spent on the work. [Citation omitted] Records which give no explanation of the activities performed are not compensable.”); In re Wildman, 72 B.R. 700, 708-9 (Bankr. N.D. Ill. 1987) (same).
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UBM, Inc.
c/o Alexander Knopfler
225 N. Michgan Ave. Invoice Number: ******
Suite 1100
Chicago, IL 60601 Invoice Date: 04/15/2010
Matter Number: 0006236.0001 Billing Attorney: Norman B. Newman
07 — General Administration
Date Atty. Description Hours
03/06/08 CEM Telephone conference with Harris attorneys regarding affidavits, deadlines, 0.30
fee and Kevin Brown lien.
03/07/08 CEM Reviewed laborer’s fund’s objection to Harris Bank’s secured claim. 0.30
03/07/08 CEM Telephone conference with L. Dixon regarding affidavit. 0.30
03/07/08 CEM Telephone conference with and e-mails with Harris attorney regarding 0.30
pleadings and deadlines.
03/07/08 CEM Reviewed Harris Bank’s objection to Kevin Brown’s lien and 0.90
subcontractors’ claim.
03/07/08 CEM Prepared pleadings for trustee to adopt Harris objection. 0.50
03/07/08 MLG Filing in Chancery Court 0.60
03/10/08 CEM Telephone conference with client regarding affidavit for IRS litigation. 0.30
03/10/08 CEM Reviewed PBC’s pleadings regarding various Summary Judgment motions. 0.90
03/10/08 CEM Telephone conference with Harris attorneys regarding IRS litigation and 0.20
bankruptcy payments.
03/10/08 CEM Revised old motion to turnover to bank and pay administrative claims. 0.50
03/10/08 NBN Further review of PBC’s response to Trustee’s motion to pay delay claim 0.40
and meet with C. McManus regarding same.
03/13/08 CEM Reviewed summary judgment responses filed by U.S. Fire. 0.50
03/13/08 CEM E-mails with Harris attorney regarding upcoming deadlines and 0.10
subcontractor claims.
03/13/08 CEM Revised motion to pay bank, L. Dixon and advance on fees. 0.20
03/13/08 NBN Review motion for authority to turn over collateral to secured creditor. 0.30
03/14/08 CEM Reviewed order and e-mails regarding funds in fire station case. 0.40
Page 4
07/01/08 CEM E-mails with Harris attorney regarding documents for claim versus PBC. 0.10
07/07/08 CEM Reviewed Abbott’s supplemental filing in support of summary judgment. 0.40
07/08/08 CEM Reviewed supplemental pleadings from mechanic’s lien claimant. 0.40
07/09/08 CEM Reviewed Cable’s application for interest on lien claim. 0.50
07/10/08 CEM Reviewed Harris Bank pleadings versus Laborer’s Fund. 0.80
07/10/08 CEM Reviewed another petition for interest on lien claim. 0.40
07/11/08 CEM E-mails with Harris attorney regarding response to lien claimants’ request 0.20
for interest.
07/14/08 CEM Reviewed US Fire’s petition for interest on claim. 0.50
07/14/08 CEM Telephone conference with trustee regarding fee application. 0.10
07/14/08 NBN Telephone conference with A. Knopfler regarding 8/28/08 hearing and 0.20
remaining claims to funds on deposit.
07/15/08 CEM Reviewed US Fire’s supplement to petition for interest on claim. 0.30
07/17/08 CEM E-mails with Harris counsel regarding interest on lien claims. 0.10
07/18/08 CEM Reviewed client’s statement of time and fees. 0.50
07/21/08 CEM Reviewed another petition for interest on lien claim. 0.30
07/24/08 CEM Telephone conference with Trustee regarding fee application. 0.10
07/24/08 CEM Telephone conference with mechanic’s lien claimant regarding intent on 0.30
claims.
07/25/08 CEM Telephone conference with creditor regarding status. 0.10
07/29/08 CEM Telephone conference with creditor regarding client’s fee application. 0.10
08/04/08 CEM Reviewed another petition for interest on mechanic’s lien claim. 0.30
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08/07/08 CEM Reviewed e-mail updates regarding fire station project. 0.10
08/08/08 CEM Telephone conference with surety’s attorney regarding status of fire station 0.30
project.
08/08/08 CEM E-mails with client and conference with N. Newman regarding fire station 0.10
project.
08/08/08 NBN Review correspondences from T. Richter regarding funds remaining from 0.30
fire station project.
08/11/08 CEM Reviewed late petition for interest and order from court on other interest 0.40
claims.
08/12/08 CEM Prepared objection to Abbott’s petition for interest. 0.40
08/12/08 CEM Telephone conference with contractor regarding status of cases. 0.20
08/13/08 CEM E-mails with bank’s attorney regarding various issues. 0.10
08/14/08 CEM Reviewed Cable’s motion to disburse funds for interest on claims. 0.30
08/14/08 CEM Brief review of support for claim versus PBC sent back from Harris. 0.50
08/14/08 NBN Review delay claim and PBC response and offer (.80); telephone call with 1.10
L. Schad regarding possible employment to handle delay claim vs. PBC
(.30).
08/15/08 CEM E-mails with Harris attorney regarding Cable’s petition for interest. 0.10
08/15/08 CEM Reviewed Cable’s amended motion for interest on claim. 0.30
08/18/08 CEM Reviewed Abbott’s response in support of untimely petition for interest. 0.30
08/18/08 CEM Prepared objection to Cable’s petition for interest. 0.40
08/19/08 CEM Attended hearing on motion to pay trustee. 0.40
08/19/08 CEM Conference with creditor regarding status of cases. 0.10
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09/11/08 CEM Reviewed Cable’s and Laborers Funds and bank’s new filing. 0.90
09/12/08 CEM Reviewed new pleadings from McKele. 0.40
09/15/08 CEM Telephone conference with subcontractor regarding claim for interest 0.20
09/18/08 CEM Reviewed recent orders regarding mechanics lien litigation. 0.50
09/18/08 CEM Reviewed supplemental filing regarding McKele’s claim. 0.20
09/19/08 CEM Reviewed PBC’s new motion and reply to our and bank’s objection. 0.80
09/22/08 CEM Telephone conference with creditor regarding PBC’s motions. 0.30
09/22/08 TAM Conference with C. McManus regarding court status; review email 0.30
regarding same.
09/23/08 CEM E-mails, conferences with N. Newman regarding claims against PBC and 0.30
its new motion.
09/23/08 CEM Began outline of response to PBC’s new motion. 0.90
09/23/08 TAM Court appearance on status (judge 35 minutes late for call). 0.50
09/23/08 NBN Correspondences with D. Audley regarding J. Meacham retirement (.20); 0.80
correspondences with L. Schad regarding meeting on 10/3/08 (.20); review
PBC motion to clarify 8/28/08 order (.40).
09/24/08 CEM Reviewed petition for interest from mechanic’s lien holder. 0.20
09/24/08 NBN Review draft of complaint vs. PBC. 0.40
09/25/08 CEM Reviewed previous pleadings regarding UBM’s claims. 0.80
09/26/08 TAM Research regarding dismissal for want of prosecution as referenced in PBC 1.00
motion.
09/26/08 NBN Review administrative claim documents regarding action vs. PBC. 0.80
09/30/08 CEM Reviewed bank’s response to laborer’s fund. 0.40
Page 7
10/24/08 CEM Reviewed recent orders entered in state court. 0.30
10/24/08 CEM Brief conference with N. Newman and e-mails with potential special 0.10
counsel.
10/27/08 CEM Prepared for tomorrow’s hearing by reviewing various pleadings. 0.80
10/28/08 CEM Attended hearing on various state court matters. 0.70
10/28/08 CEM E-mails with N. Newman regarding today’s hearing. 0.10
10/28/08 TAM Court appearance on status. 0.50
10/29/08 J D C. McManus regarding motion for default filed by PBC and strategy 0.20
10/29/08 CEM Telephone conference with creditor regarding yesterday’s hearing. 0.10
10/29/08 CEM Began draft of order on PBC’s motion. 0.30
10/29/08 CEM Review of PBC’s new letter and draft motion for default. 0.80
10/29/08 NBN Review PBC Motion to Default the Trustee and discuss with C. McManus. 0.40
10/30/08 CEM Telephone conference with asset finder re: unclaimed asset of debtor. 0.20
10/30/08 CEM Telephone conference with client re: various updates. 0.10
10/30/08 CEM Reviewed correspondence re: unclaimed asset of debtor. 0.20
10/31/08 J D C. McManus regarding strategy in dealing with pending motion and 0.20
counterclaim issues
10/31/08 CEM Conference with Newman regarding various issues in litigation. 0.20
10/31/08 CEM Teleconference with Richter regarding interpleader complaint. 0.10
10/31/08 CEM Reviewed bank’s brief versus McKele. 0.30
10/31/08 NBN Discussion with C. McManus and J. Dash regarding dealing with PBC 0.40
motion for default.
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11/06/08 CEM Telephone conference with subcontractor regarding recent filings in state 0.20
and bankruptcy court.
11/07/08 J D Revise and edit draft answer to PBC interpleader counterclaim; C. 1.20
McManus regarding state court motion to dismiss
11/07/08 CEM Reviewed J. Dash’s comments to answer to interpleader complaint. 0.20
11/07/08 CEM Conference with J. Dash regarding dismissal of UBM’s interpleader 0.20
complaint.
11/07/08 CEM Begin draft motion to dismiss PBC’s complaint. 0.40
11/07/08 CEM Reviewed case cited by PBC in complaint. 0.30
11/09/08 CEM Revised motion to dismiss portion of PBC’s interpleader complaint. 0.70
11/10/08 J D Review and revise draft motion to dismiss portion of PBC’s complaint; 0.70
Email correspondence with C. McManus regarding 11/12 hearing in state
court; Review motion of PBC regarding staying disbursement
11/10/08 CEM Reviewed PBC’s motion to suspend turnover of funds. 0.40
11/10/08 CEM Conference with N. Newman regarding state court filings. 0.10
11/10/08 CEM Revised motion to dismiss in preparation for filing. 0.40
11/10/08 NBN Review motion to dismiss PBC complaint (.30); telephone call with L. 0.50
Schad regarding claim vs. PBC (.20).
11/11/08 CEM Prepare for two hearings tomorrow. 0.90
11/11/08 CEM Telephone conference with insurance company regarding status. 0.20
11/11/08 CEM Telephone conference with N. Newman regarding tomorrow’s hearings. 0.10
11/12/08 J D Prepare for and attend court hearing on several motions, resulting in order 3.20
directing payment to trustee; Negotiations with PBC counsel T. Richter
regarding terms of orders; Complete review of orders and present to court
clerk for payment; N. Newman regarding orders and effect
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11/12/08 CEM Attended state court hearing. 1.00
11/12/08 CEM Attended bankruptcy court hearing on motion to enforce stay and hire 0.60
finder.
11/12/08 CEM Reviewed transcript of chancery court hearing we missed. 0.50
11/12/08 NBN To bankruptcy court for motion to enforce stay vs. PBC (.90); to state court 3.00
for motion to turnover residual fund and other pending matters (1.5);
review orders entered in Chancery court (.60).
11/13/08 CEM Reviewed PBC’s response to stay and reviewed final state court orders. 0.40
11/13/08 CEM Reviewed Audley’s e-mail regarding funds and conference with N. 0.20
Newman regarding same.
11/13/08 CEM E-mails with asset finder regarding court approval to begin work. 0.10
11/13/08 NBN Correspondences with D. Audley regarding distribution of proceeds to be 0.60
received from Clerk of the Circuit Court and resolving remaining claims
vs. PBC.
11/14/08 CEM Conference with N. Newman regarding settlement/strategy. 0.10
11/14/08 NBN Two telephone calls with T. Richter regarding possible settlement of 0.60
remaining PBC issues (.40); Telephone conference with L. Schad
regarding handling case vs. PBC (.20).
11/17/08 CEM Drafted motion for turnover in fire station case. 0.70
11/17/08 CEM Conferences with N. Newman regarding status of litigation and 0.10
bankruptcy.
11/17/08 NBN Telephone conference with A. Knopfler regarding turn over of funds by 0.20
Chancery Court Clerk.
11/19/08 CEM Attended hearing on abstention. 0.60
11/19/08 CEM Reviewed PBC’s renewed motion to abstain. 0.50
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UBM, Inc.
c/o Alexander Knopfler
225 N. Michgan Ave. Invoice Number: ******
Suite 1100
Chicago, IL 60601 Invoice Date: 04/15/2010
Matter Number: 0006236.0010 Billing Attorney: Norman B. Newman
07 — Fee Related Matters
FEES THROUGH MARCH 5, 2010
Date Atty. Description Hours
03/06/08 CEM Telephone conference with L. Dixon regarding affidavit and fees. 0.20
03/06/08 CEM Telephone conference with trustee regarding affidavits deadlines and fees. 0.20
04/16/08 CEM Began review of billing sheets in preparation for fee application. 0.40
04/18/08 CEM Finalized fee application. 0.30
04/18/08 NBN Review and revise interim fee application. 1.50
04/24/08 CEM Telephone conference with Brown regarding compensation for L. Dixon. 0.20
04/25/08 NBN Telephone conference with three creditors regarding interim fee 0.50
application notice.
05/19/08 CEM E-mails with Harris regarding payment applications. 0.10
05/19/08 CEM Telephone conference with creditor regarding hearing on fees. 0.10
05/21/08 CEM Attended hearing on fee application. 0.50
05/21/08 CEM Telephone conference with Audley regarding status of various litigation 0.20
and fees.
05/22/08 NBN Discussion with A. Knopfler regarding fees allowed and amount to be paid 0.20
per Harris Bank’s attorney.
07/22/08 CEM Began work on application for Trustee’s compensation. 0.40
07/23/08 CEM Finished application for Trustee’s compensation. 0.70
07/23/08 NBN Review and revise application of Trustee for interim compensation. 0.30
10/02/08 CEM Telephone conference with attorney Brown regarding L. Dixon’s 0.20
compensation and yesterday’s hearing.
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10/02/08 CEM Reviewed L. Dixon’s application for compensation. 0.30
10/02/08 NBN Review motion of Lynn Dixon for allowance of administrative expense 0.20
claim.
10/08/08 CEM Telephone conference with Brown regarding Dixon’s application. 0.10
10/21/08 CEM Telephone conference with Brown regarding Lynn Dixon’s compensation; 0.10
e-mail to same regarding same.
10/21/08 CEM Reviewed court order and Brown’s e-mail regarding L. Dixon; wrote to 0.10
client regarding same.
10/30/08 CEM E-mails with Brown re: Dixon’s claim. 0.10
10/31/08 CEM More e-mails with Brown regarding Dixon’s claim. 0.10
12/16/08 NBN Review services rendered in 2008 regarding interim trustee fee application. 0.50
12/17/08 NBN Letter to A. Knopfler regarding services rendered in 2008. 0.20
01/29/09 CEM Telephone conference with client regarding fee application. 0.10
01/30/09 CEM Worked on trustee’s fee application. 0.80
01/30/09 NBN Discussion with A. Knopfler regarding interim trustee fee application 0.60
(.30); review and revise interim fee application (.40).
02/02/09 CEM Finalized client’s fee application for filing. 0.10
02/23/09 CEM Telephone conference with Trustee regarding hearing on fee application. 0.10
02/24/09 CEM Telephone conference with client regarding tomorrow’s hearing on fees. 0.10
02/24/09 CEM Reviewed fee application in preparation for tomorrow’s hearing. 0.20
02/25/09 CEM Attended hearing on client’s fee petition. 0.20
01/15/10 NBN Review statement of services for second interim fee application. 0.70
03/04/10 NBN Prepare second interim fee application. 1.40
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UBM, Inc.
c/o Alexander Knopfler
225 N. Michgan Ave. Invoice Number: ******
Suite 1100
Chicago, IL 60601 Invoice Date: 04/15/2010
Matter Number: 0006236.0001 Billing Attorney: Norman B. Newman
07 — General Administration
EXPENSE SUMMARY THROUGH MARCH 5, 2010
Description Amount
Photocopying $1,179.00
Court Reporter 714.45
Fax 320.00
Postage 262.57
Computerized Legal Research 147.48
Local Transportation 123.00
CMS Delivery 114.49
Certified Copies 51.00
Witness Fee 45.82
FedEx 20.35
Total $2,978.16
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