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In re National Department Stores Inc.

October 26, 1937

IN RE NATIONAL DEPARTMENT STORES, INC. DEMOV
v.
NATIONAL DEPARTMENT STORES, INC., ET. AL.; SAME V. NATIONAL DEPARTMENT STORES, INC.



Appeal from the District Court of the United States for the District of Delaware; John P. Nields, Judge.

Author: Forman

Before DAVIS, Circuit Judge, and WATSON and FORMAN, District Judges.

FORMAN, District Judge.

Appellant was sole counsel for the trustees in bankruptcy of the National Department Stores, Incorporated, from June 29, 1933, until July 20, 1933, when he became associated general counsel to the trustees in bankruptcy, and continued in such capacity until April 19, 1935, when the United States District Court for the District of Delaware approved a plan of reorganization for the corporation under section 77B of the Bankruptcy Act (11 U.S.C.A. ยง 207), the petition under said section having been filed in June, 1934.

Appellant petitioned the court below for allowances totaling $320,000 for this period. He continued to render service until January 31, 1936, and petitioned the court for $30,000 for such additional service.

The court allowed him a fee of $60,000 on his first petition and a fee of $22,500 on his second petition, making a total of $82,500.

He appealed from the allowance of $60,000, and there has been a hearing on that appeal. He also appealed from the allowance of $22,500, which has been heard together, with reargument upon the former appeal.

We agree that appellant, upon comparing the fees allowed to other lawyers in this and allied proceedings with those allowed him, may well feel justified in the belief that others were more generously treated than himself. In view of the extent and value of his services admitted by the Advisory Merchandise Creditor's Committee,*fn1 the attorneys for the appellee, and the learned trial court itself, it is difficult to reconcile some of the fees allowed to others for what must have been proportionately less time-consuming and valuable service. While this condition may be ever so irritating to the appellant, it does not justify this court in using such inconsistency as the yardstick by which the value of the appellant's service should be measured.

We believe we are confined to one simple issue, and that is to an investigation to determine whether the court below abused its discretion in making its allowances to the appellant so that it can be said that there was a manifest disregard to right and reason.

Obviously, the appellant rendered lengthy and arduous service as detailed in his petitions. The court below sat to hear his oral testimony concerning his labors as recited in his full petition. His examination in this connection took over 7 hours.

The appellant directs attention to remarks made by the court during this examination on the first petition as indicative of bias and antipathy upon the part of the court for the appellant. We cannot give much weight to these allegations.

More significant is the conduct of the court in two respects:

First, the manner in which it stresses the fact that appellant was assisted by local counsel. It says in its opinion, "With local counsel he attended hearings in connection with leases in Trenton, Minneapolis, Detroit, Pittsburgh, Cleveland, St. Louis and Philadelphia. The local counsel in these cities have been paid or are asking handsome allowances for the results of the hearings. Attempts were made to segregate the assets in the local jurisdictions of each of the stores." (Italics ours.)

This statement of the court appears to us not be be borne out by the evidence. We cannot find that appellant appeared represented by counsel in the proceedings in Trenton. On the contrary, ...


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