U.S. A. Motel Corp. v. Danning, s. 73-3224

Citation521 F.2d 117
Decision Date08 August 1975
Docket Number74-1179,Nos. 73-3224,s. 73-3224
PartiesIn the Matter of U.S.A. Motel Corporation, a California Corporation, Debtor. U.S.A. MOTEL CORPORATION, et al., Appellants, v. Curtis B. DANNING, Trustee, et al., Appellees.
CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)

Before WRIGHT and CHOY, Circuit Judges, and SOLOMON, * District Judge.


In an earlier appeal, we reversed the trial court and dismissed the petition of U.S.A. Motel Corporation for reorganization under Chapter X of the Bankruptcy Act on the ground that it was not filed in good faith. We found that U.S.A Motel Corporation was not insolvent and that the proceedings were filed for two improper purposes: the liquidation of corporate assets and the resolution of internal disputes among shareholders. In re U.S.A. Motel Corporation, 450 F.2d 499 (9th Cir. 1971).

Upon remand, the District Court awarded:

$11,650 to the attorney for the petitioner;

$12,500 to the trustee;

$10,500 to the trustee's attorney;

$2,500 to the referee/special master.

The District Court ordered these amounts to be paid by U.S.A. Motel Corporation, which is solvent.

The board of U.S.A. Motel Corporation is now controlled by a group of stockholders who opposed the Chapter X proceedings and who now contend that no compensation should be awarded because of this Court's holding that the proceedings were not filed in good faith. In the alternative, they contend that the allowances were excessive.

The dismissal of a Chapter X petition for lack of good faith will not necessarily bar the award of compensation. See 6A Collier P 13.03(1) at 924, Smith v. Central Trust Co., 139 F.2d 733 (4th Cir. 1944), On remand from, Fidelity Assurance Association v. Sims, 318 U.S. 608, 63 S.Ct. 807, 87 L.Ed. 1032 (1943). We believe that compensation was appropriate in this case. When the petition was filed, the directors believed, although erroneously, that U.S.A. Motel Corporation was insolvent and could not meet its unsecured obligations. In addition, both the referee special master and the District Court denied motions to dismiss.

Nevertheless, the attorney for the debtor in a Chapter X proceeding is entitled to compensation from the estate only for services which benefited the estate. 6A Collier P 13.04 at 940; In re Porto Rican American Tobacco Co., 117 F.2d 599 (2d Cir. 1941). The trustee, his attorney, and the referee/special master are entitled to reasonable compensation. 11 U.S.C. § 641.

In our view, the $2,500 awarded the referee/special master is reasonable. We also hold that the award of $10,500 to the trustee's attorney, for almost 350 hours work, is reasonable.

We have considered the work performed by the trustee. The award of $12,500 for 200 hours work ($62.50 an hour) is grossly excessive. We hold that a fee of $35.00 an hour, or a total of $7,000, is adequate considering the nature of his responsibilities, and reduce the award to that amount.


To continue reading

Request your trial
24 cases
  • In re Menk
    • United States
    • Bankruptcy Appellate Panels. U.S. Bankruptcy Appellate Panel, Ninth Circuit
    • 5 November 1999
    ...873 F.2d 1334, 1335-37 (9th Cir.1989); Tsafaroff v. Taylor (In re Taylor), 884 F.2d 478, 481 (9th Cir.1989); U.S.A. Motel Corp. v. Danning, 521 F.2d 117 (9th Cir.1975). Equitable subordination disputes under 11 U.S.C. § 510 similarly remain viable. Universal Farming, 873 F.2d at The bankrup......
  • Sundquist v. Bank of Am., N.A. (In re Sundquist), Case 14–02278
    • United States
    • United States Bankruptcy Courts. Ninth Circuit. U.S. Bankruptcy Court — Eastern District of California
    • 15 November 2017
    ...1999) ; Tsafaroff v. Taylor (In re Taylor), 884 F.2d 478, 481 (9th Cir. 1989) ; U.S.A. Motel Corp. v. Danning (In re U.S.A. Motel Corp.), 521 F.2d 117, 118 (9th Cir. 1975). Likewise, enforcement of the automatic stay is a civil proceeding "arising under title 11" over which the bankruptcy c......
  • Azam v. U.S. Bank Nat'Lass'N (In re Azam)
    • United States
    • Bankruptcy Appellate Panels. U.S. Bankruptcy Appellate Panel, Ninth Circuit
    • 8 May 2015
    ...for an award of attorney's fees for services rendered in connection with the underlying action, see USA Motel Corp. v. Danning, 521 F.2d 117 (9th Cir. 1975). The bankruptcy court does not have jurisdiction, however, to grant new relief independent of its prior rulings once the underlying ac......
  • In re Ward
    • United States
    • United States Bankruptcy Courts. Seventh Circuit. U.S. Bankruptcy Court — Eastern District of Wisconsin
    • 26 June 2014
    ...Cir.1989); Dahlquist v. First Nat'l Bank in Sioux City (In re Dahlquist), 751 F.2d 295, 298 (8th Cir.1985); U.S.A. Motel Corp. v. Danning, 521 F.2d 117, 119 (9th Cir.1975). These cases, however, are best understood to only allow a bankruptcy court to determine the reasonableness of the fees......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT