Have I got a story for you. A rousing tale of schedules, hearings, frustrations, and ultimately fortunes, traceable to a good story in the fee application.
Maybe that’s a bit overblown, but I’m telling this story with a purpose. Good stories lead to fair compensation for bankruptcy attorneys.
Fee applications aren’t hard
Filing fee applications is central to sustaining an above-average consumer bankruptcy practice. I’ve said that again and again. Yet somehow, the thought that drafting a fee application is difficult persists among bankruptcy practitioners.
So, here’s a real world example of a fee application with a 700 word narrative that netted $21K over and above the no-look fee. On top of that, the bankruptcy judge noted the effort was “truly exceptional work”.
And I credit the success of this fee application to really telling the story of a facially simple but substantively challenging case. Just like so many cases in your practice.
Humans like stories
We are wired to crave stories, since the beginning of humankind. Take advantage of that in your fee applications.
I won’t recite the facts of the case here. Rather, I’ve reproduced the narrative to the application below. The judge came to the fee application with only slightly more exposure to the case than you do.
If time entries are the bones of the application, the narrative fleshes it out. It puts those phone calls, faxes, emails, court appearances in context. You get a chance to explain what the challenges were and tout the results.
Further, the narrative serves to educate the bench on what life in the trenches is really like. Too few judges served in the consumer trenches. They didn’t have to deal with individuals, pushed to their financial, intellectual, and emotional limits. And until judges develop an appreciation about how hard the consumer practice is, we will continue to be underpaid.
The narrative
A. GENERAL MATTERS
The debtor in this case is and was at all times relevant, subject to a conservatorship,
managed by the Santa Clara County Public Guardian. Counsel was contacted about a
bankruptcy filing mid afternoon Friday before a foreclosure sale scheduled for Monday.
Given the time constraints and the procedures of the county, counsel has been paid nothing
in the year and a half this case has been pending.
Debtor owns a home in San Jose, subject to two deeds of trust, and a parcel of raw
land in Idaho, rented out for agricultural purposes, also subject to a single secured claim.
The complicating factor in this case is the fact that the estate administrators from
the county had little or no background on the debts involved, and came into the case for
the very reason that the debtor’s financial affairs were in disarray.
Another complicating factor is the nature of the county’s bureaucracy, and the
change, mid case, of estate administrators who serve as Counsel’s contact. The pandemic,
sending everyone involved to working from home, made communication and swift
responses even more difficult.
FROM INTAKE TO COMPLETED FILING
Counsel filed an emergency within less than a business day before the sale, gave
notice to the foreclosing creditor. In the circumstances, Counsel was required to file a
motion to excuse prepetition credit counseling.
By the time the necessary information was gathered and transmuted into bankruptcy
schedules after a motion for an extension of time to file the balance of the schedules, the
professional fees incurred in Analysis & Schedule Preparation Matter, Matter #68198,
amount to $4,522.50.
COMPLETED FILING TO CONFIRMATION
The plan, which has at all times provided for payment of 100% of allowed claims,
drew objections from the Chapter 13 trustee and both of the creditors secured by Debtor’s
home. Counsel was able to resolve the objections of the secured creditors over time and
with amendments. The trustee’s objections required a contested confirmation hearing to
obtain closure.
The sale of the Debtor’s raw land in Idaho is expected to provide the bulk of the
funds to pay off this plan. That sale will require the involvement of both the probate court
overseeing the conservatorship and this court. During the pendency of this case, it
developed that the land currently has a value predicated on development and thus a far
higher value than thought at the commencement of the case.
One of the barriers to earlier confirmation in this case revolved around the necessity
of proof of making each of the monthly pre confirmation payments on three secured loans.
Between idiosyncracies of the three servicers, including one who began sending monthly
statements saying nothing was due, and the County, who couldn’t pay a bill without a
statement, and struggled to provide proof that the County’s checks had cleared the bank,
proving that Debtor was current post petition became an issue of disproportionate
importance.
Counsel opposed Trustee’s motions to dismiss and twice successfully sought
extensions of time to confirm a plan.
The professional fees incurred in Filing To Confirmation Matter, Matter #68199,
amount to $15,056.25.
CLAIMS
Counsel objected to the claim of Bayview Loan Servicing in that it included highly
inflated charges for force-placed insurance that duplicated insurance Debtor contracted
for. Bayview’s claim, and the efforts required to validate and prevail on Debtor’s issues
consumed significant time and effort.
The professional fees incurred in Bayview Claim Matter, Matter #68204, amount to
$5,658.75.
The claim of the IRS was filed as an estimated claim. Counsel struggled to get
proof that the Public Guardian had prepared and filed the tax returns, then reached out to
the IRS to achieve an unobjectionable amended claim
The professional fees incurred in Claims Matter, Matter #68201, amount to
$577.50.
OTHER ISSUES
At several points in the case, Counsel was called upon the evaluate offers for loan
modifications.
The professional fees in the Chapter 13 Matters, including the estimated time to
appear at the hearing on this application, amount to $19,578.75, as set out in Exhibits B
and C.
B. CLAIMS MATTER
Counsel reviewed proofs of claim as filed. The professional fees in the Claims
Matter amount to $577.50, as set out in Exhibit D.
Better stories make better bottom lines
So, tell the story.
It doesn’t have to be War and Peace. Seven hundred words here were enough to sell the proposition that the no look fee was inadequate.
