B. Counsel for the Liquidating Receivers
The services of counsel for the liquidating receivers extended from December 16, 1971, to February 2, 1972, when one of the receivers was elected sole trustee. According to their filed papers, the principal activities of counsel during the period, in addition to conferring from time to time with the receivers, consisted of the following:
1. Counseling the receivers with respect to the difficult decision as to whether to sell the Debtor's principal piece of real estate located at 620 W. Lehigh Avenue, Philadelphia, a complex of multi-story buildings comprising 326,000 square feet of floor space.
2. Negotiating with persons making offers to purchase the real estate at private sale.
3. Negotiating the private sale of the Debtor's trade name and preparing a petition for leave to complete the sale and attending a hearing thereon (this petition was initially denied by the referee).
4. "Assisting the receivers in the opening of their bank accounts and in connection with the telephone service."
5. Attending a creditors' meeting in New York City.
6. Conferring with the auctioneer with respect to certain sales.
7. Assisting in connection with the filing of the inventory and preparing and filing the receivers' operating and liquidating accounts.
8. Preparing and filing various miscellaneous petitions (for compensation, for appointment of an appraiser, etc.).
9. Responding to various inquiries from creditors, employees of the debtor, prospective purchasers of assets, and other parties in interest.
10. Setting up of files and a system for collection of some 1100 individual accounts receivable, writing demand letters, and handling hundreds of telephone calls in connection with collection.
In their Memorandum Contra Certificate of Review, counsel refer to the $5000 award of fees to counsel for the liquidating receivers as "nominal."
C. Counsel for the Trustee
The services of counsel for the trustee are still continuing. We consider however only those services rendered up to the time of filing the Petition for Compensation.
According to the petition and memorandum, the most substantial services performed during the period of trusteeship were those attendant to collection of the accounts receivable. Apparently the full responsibility for collecting these accounts was assumed by counsel. With two members of counsel's firm in charge of collection, at least 4000 form letters were written, generating a large flow of responses and telephone calls from account debtors. The sum of $163,794 was in due course collected. Counsel has noted that, at commercial law league rates, the fees on this collection would exceed $21,000.
The second principal effort during the trusteeship period involved the examination of the 392 proofs of claim filed by creditors, the filing of written objections to some 59 claims, and the attendance at hearings on the objections. Counsel submits that as the result of their efforts, the claims of creditors will be reduced by some $1.1 million, thus doubling the distribution to creditors whose claims are allowed.
Other services during the trusteeship period include the following:
1. Attending the first meeting of creditors.
2. Attending the public sale of real estate, trade name, inventory, and equipment of the Debtor, which yielded the gross sum of $560,475 and extended over a period of four days.
3. Preparing petitions for confirmation of the asset sales and attending hearings thereon.
4. Settling the claim of the purchaser of the real estate who objected to confirmation of the sale of the heavy machinery.
5. Preparing the deed and attending the real estate settlement.
6. Negotiating with Girard Bank with respect to its secured claims.
7. Preparing and filing certain miscellaneous petitions (for the trustee to hire clerical help, for the employment of special counsel in New Jersey to collect an account, to invest cash funds in ninety day certificates of deposit, for compensation, etc.), and the trustee's first report.
The public sale of the assets of the Debtor resulted in a realization of $347,181.44 for the inventory; $18,000.00 for the trade name; $4,960.75 for the sale of equipment; and $190,000.00 for the sale of the real estate. The total amount collected by the trustee to the date of his accounting (May 11, 1972) was $825,225. In the view of counsel:
Here, a company having thousands of customers, hundreds of creditors and many employees suddenly closes its doors. The trustee and his counsel are obliged to deal with thousands of inquiries, demands and claims all without the benefit of the bankrupt's organization or familiarity with its records. The trustee and his counsel are suddenly substituted for all of the bankrupt's officers and employees. Voluminous files must be set up and managed. Hundreds of details must be dealt with.
. . .