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IN RE F. H. MCGRAW & CO.

July 25, 1979

In re F. H. McGraw And Company.


The opinion of the court was delivered by: LUONGO

MEMORANDUM

This appeal from an order of the Bankruptcy Judge presents an extremely narrow issue that arises on somewhat unusual facts. The Honorable William A. King, Jr., Bankruptcy Judge, ruled that a 1975 order of the bankruptcy court allowing compensation for legal services rendered by counsel for the trustee necessarily encompassed All services rendered by counsel prior to September 24, 1974, the date of counsel's application for compensation. Judge King therefore denied a supplemental application that sought compensation for services performed prior to that date, which assertedly were not reflected in the original application. Counsel for the trustee moved for reconsideration, and Judge King reaffirmed his earlier ruling. At that point, counsel took this appeal. For the reasons hereafter stated, I conclude that the decision below gave unnecessarily broad scope to the 1975 order, and I shall remand the supplemental application for further proceedings.

 In 1968, a creditor's petition for involuntary proceedings under Chapter X of the Bankruptcy Act, 11 U.S.C. ยงยง 501-676 (1976), was filed against F. H. McGraw and Company, a construction firm. The Honorable Thomas J. Curtin, Bankruptcy Judge, entered an order converting the involuntary Chapter X proceeding to a Chapter XI arrangement. In 1970, F. H. McGraw and Company was adjudicated a bankrupt. Shortly thereafter, Philip F. Newman was elected as trustee, and Judge Curtin appointed Samuel Marx, Esquire and the firm of Adelman & Lavine as co-counsel for the trustee. The trustee's first and final account was filed on September 24, 1974, and Judge Curtin held the first and final audit hearing on December 10, 1974. The order of final distribution was entered in February of 1975.

 Counsel for the trustee filed an application for attorneys' fees and costs on September 24, 1974. Record at 4-22. In their application, counsel stated that they had spent "at least 375 hours" in their representation of Mr. Newman. Id. 4. They also supplied, as an exhibit to their application, a description of the services they had rendered. The first seven and a half pages recounted the services performed by Alexander B. Adelman and Marvin Krasny. Id. 8-15. The next three pages set forth the services rendered by Nathan Lavine and James W. Adelman. Id. 16-18. Finally, the last page and a half detailed the services performed by Lewis H. Gold. Id. 19-20. Mr. Gold's services are at issue in this appeal.

 At the hearing in December of 1974, Judge Curtin considered (and later approved) this application. None of the creditors voiced any objection to counsel's request for compensation. During the hearing, the following colloquy took place between Marvin Krasny, Esquire, of Adelman & Lavine, and Judge Curtin:

 
"Mr. Krasny: That covers all the applications. I might point out to Your Honor for purposes of the record, the one remaining, there is one remaining possible asset in the McGraw matter. There was a pension fund which may have an equity in it. Your Honor will recall Mr. Gold of our office handled this matter and has employed a firm to help locate the possible parties under this pension plan and to make a valuation of the benefits that could be paid to these people, and it will take another possibly six to eight months for this investigation to be completed.
 
The Court: Is there any reason why the creditors should have to postpone this?
 
Mr. Krasny: No, sir. I am saying to Your Honor that under the new rules that if a fund is realized from this pension plan we can always petition Your Honor to reopen the case for distribution, and there is no need to hold up the creditors. That is why we filed the account.
 
The Court: After all, the pension (Sic ) was filed in this case
 
Mr. Krasny: It is a 1968 case.
 
The Court: Yes, the first proof of claim came in January of 1969."
 
N.T. 21-22.

 Immediately before the hearing concluded, this additional colloquy occurred:

 
"The Court: The only one still open is the question of the pension fund ...

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