BYRON F. DAVID v. DONALD F. KING,
- Summarized by Caleb Chaplain , U.S. Bankruptcy Court for the Western District of Virginia
- 5 months 1 week ago
- Case Type:
- Consumer
- Case Status:
- Reversed and Remanded
- Citation:
- 23-1856 (4th Circuit, Jul 26,2024) Published
- Tag(s):
-
- Ruling:
- The Fourth Circuit held that § 327(a) does not permit former trustees to file post-hoc applications to employ professionals for work done while they were trustees if the case has already been converted from the chapter in which the former trustees served as trustees. Because conversion terminated the trustee’s services pursuant to under § 348(e), the former trustee was no longer “the [active] trustee” who could file an application to employ. The Fourth Circuit reversed and remanded with instructions.
- Procedural context:
- In a case converted to chapter 13 from chapter 11 (which had previously converted from chapter 7), the chapter 11 trustee filed an application for payment of administrative expenses for $43,598.00 in law firm fees and $70.00 in expenses. The debtor objected, because the chapter 11 trustee never sought approval to retain the law firm during the pendency of the case under chapter 11. Following a string of orders related to an earlier appeal and remand, the bankruptcy court approved retroactively the chapter 11 trustee’s request under § 327(a) to retain the law firm for the period he had acted as chapter 11 trustee. The debtor appealed, and the district court affirmed. The debtor appealed to the Fourth Circuit.
- Facts:
- The debtor’s case progressed through three chapters. Initially, the debtor filed a chapter 7 petition. Donald King was appointed as the chapter 7 trustee. The bankruptcy court approved his application to retain a law firm to represent him as a chapter 7 trustee. Subsequently, the chapter 7 case was converted to one under chapter 11. Post-conversion, Mr. King was appointed as the chapter 11 trustee. Mr. King, however, did not file an application to retain the law firm to represent him in his new capacity as the chapter 11 trustee. Even though the law firm had not been approved by the bankruptcy court, the law firm continued to perform legal work for Mr. King as the chapter 11 trustee.
Following yet another conversion, this time to chapter 13, Mr. King filed an application for payment of administrative expenses for $43,598.00 in law firm fees and $70.00 in expenses. The debtor objected.
- Judge(s):
- Quattlebaum, Richardson, and Wilkinson
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