UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF KENTUCKY
DEBTOR CASE NO. 78-00039
This matter is before the Court on the Motion for Order Nunc Pro Tunc and/or Motion to Reconsider filed herein by Charles W. Curry ("Curry"), attorney at law, who formerly represented Autho Sizemore and his wife ("the Sizemores"). Curry seeks a reasonable attorney fee for legal services performed for the Sizemores in the late 1970's. No objection to the fee request has been filed. Curry filed a Proof of Claim in this case in 1979. In 1986 he moved the Court to treat his fee as an administrative expense. This motion was denied.
Curry states that his representation of the Sizemores began sometime in 1978 in regard to their lease of substantial coal holdings to Mt. Victory Coal Company and Mt. Victory's subsequent bankruptcy filing. He entered into negotiations with the receiver for Mt. Victory and was successful in terminating the Mt. Victory lease and returning the coal holdings to the Sizemores. He states that time was of the essence in accomplishing termination of the lease. He further states that he was unaware of Autho Sizemore's own filing of a bankruptcy petition until the majority of the work in terminating the lease was done.
Curry states that his efforts resulted in an economic benefit to Autho Sizemore's bankruptcy estate such that it became solvent. This very significant economic benefit was not realized until after an earlier ruling by this Court against Curry. He has filed a copy of the Agreed Order negotiated in the Mt. Victory case which sets out the Sizemores' interest in the coal property and an affidavit from Dan D. Brock Jr., the attorney for the Mt. Victory receiver, which estimates the economic benefit to the Sizemore bankruptcy estate to be in excess of $750,000.00, Curry's estimate of the time spent on behalf of the Sizemores is approximately two hundred fifty (250) hours. He states that the records of the law firm with which he was then associated, Shuffett, Kenton, Curry & Karem, have since been destroyed.
The issue presented by Curry's Motion is approval of a fee nunc pro tunc. The issue is complicated by the fact that Curry's time records were destroyed. In Matter of Triangle Chemicals, Inc., 697 F.2d 1280 (5th Cir. 1983), the court was faced with the same issue in a similar situation and stated:
The issue of first impression for this court is whether the bankruptcy court is bound by a per se rule not to allow compensation for attorney's fees, however valuable they are to the debtor's estate and its creditors, in the absence of a prior court authorization of the attorney's employment, or whether, instead, the court has some discretion, upon proper showing and for good cause, to enter an order nunc pro tunc approving the employment of the attorney as the court might routinely have done, had the court's approval been properly sought prior to the performance of the valuable services by the attorney. For reasons to follow, we do not think a per se rule is mandated by the statute or the rules, and we prefer to adopt the rationale of those decisions, principally of the Seventh and Ninth Circuits, that would permit nunc pro tunc relief in exceptional circumstances, such as the present, under the bankruptcy court's exercise of its powers as a court of equity.
At 1282. This Court agrees that it may grant relief nunc pro tunc in the instant matter.
Curry has cited In re Coast Trading Co., Inc., 62 B.R. 664, 667 (Bkrtcy.D.Or. 1986), for its setting out of the requirements for a professional seeking an untimely order authorizing employment. These are the satisfaction of the requirements of 11 U.S.C.'327(a) and Bankruptcy Rule 2014(a) (except for the requirement of pre-employment approval), and a satisfactory explanation to the court for the failure to obtain prior court approval. Curry maintains that pursuant to '327(a) he was at all times a disinterested person who did not hold an interest adverse to that of the bankruptcy estate. He also has supplied a copy of the retainer contract which sets out the terms of his employment by the Sizemores and provides much of the information required by Rule 2014.
As concerns his failure to seek court approval for his employment, Curry reiterates that time was of the essence in advancing Autho Sizemore's claim against Mt. Victory, and that he was not aware of his client's bankruptcy until after he had done the majority of the work on the Mt. Victory matter. In addition, the other parties in this matter apparently agree that Curry's efforts resulted in the solvency of the Sizemore bankruptcy case. (Affidavit of Dan D. Brock Jr.). This Court believes that Curry has met the requirements set out above, and that he should be compensated for services rendered.
As the Court stated earlier, the fact that Curry's time records have been destroyed is a complication, although not a fatal one. The legal services in question were provided fourteen years ago, so that the fact that detailed time records are not available is not greatly surprising. In addition, it is obvious that the services performed were in regard to a complex matter requiring the expenditure of significant amounts of time and effort. This Court believes that Curry's estimate of 250 hours is reasonable.
The retainer contract submitted as an exhibit in this matter shows that the Sizemores had agreed to pay Curry $60.00 per hour. They paid $1000.00 of a $2500.00 retainer fee. This Court will therefore award a fee of $14,000.00, or 250 hours at $60.00 per hour, less the $1000.00 already paid. An order in conformity with this opinion will be entered separately.
By the Court -
Charles W. Curry, Esq.
Dodd Dixon, Esq.