[CLBS] Questions re Plan modification and looking at liquidation, timing, etc.

[Noah Hillen]

You may be able to argue your fees were permissible in the chapter 7 because you made a substantial contribution pursuant to section 503(b)(3)(D). There is, however, a split of authority as to whether this section applies in a chapter 7 case. 

> On Mar 13, 2019, at 4:49 PM, Holly Roark <holly at roarklawboise.com> wrote:
> 
> CDCA case:
> 
> 
> 
> 1.    Let's say that we're 4.5 years in to the plan, and I just realized
> in the liquidation analysis we forgot to subtract out the hypothetical CH 7
> trustee's fees which would reduce the amount that is required to be paid to
> general unsecured creditors. I filed a motion to modify the plan along with
> an application for supplemental fees. The chapter 13 trustee says we cannot
> look at the mistake in the original plan liquidation analysis at this time
> without also looking at the value of the assets as of modification. He says
> at the hearing that "case law" supports this. My motion to modify was denied
> and the court invited me to withdraw my application for fees and refile both
> in light of the trustee's arguments.
> 
> 
> 
> Can anyone point me to this case law he is referring to regarding valuing
> assets at modification if you are going back and addressing a mistake you
> made in the liquidation analysis? (The reason he wants to do this is because
> the house value has increased by $100K, and he wants to deny me my fees in
> the case).
> 
> 
> 
> 2.    Also, deducted as part of the liquidation analysis were fees I
> earned in the original litigious chapter 7 ($28K). I applied for them under
> 503(b) and they were paid in the chapter 13. I had a feeling this would come
> up. The CH 13 trustee noticed this now that we are looking at liquidation,
> and said under no circumstances would debtor's counsel get awarded fees in
> the chapter 7, so he wants to use this to increase the net equity that
> should have been paid in to the estate. During the chapter 7, I had to act
> as a fiduciary of the estate because the chapter 7 trustee and his counsel
> would not. This had to do with probate cases I appeared in to try to
> preserve assets for the estate where the chapter 7 trustee failed to do his
> job. I know I was not hired by the estate (as debtor's) counsel, but are
> there any exceptions at all where I would have been awarded these fees and
> so could deduct them from liquidation? How about the argument that had the
> trustee been doing his job, his counsel would have incurred these fees?
> 
> 
> 
> I need to get my arguments and case law together to refile these. I am so
> exhausted from all the litigation in this case that the trustee invited and
> made me do and now wants to deny payment to me because of a 1325(a)(4) issue
> that was a mistake in calculation. 
> 
> 
> 
> Best regards,
> 
> HOLLY ROARK
> 
> Attorney at Law 
> 
> Certified Bankruptcy Specialist -
> 
> By the State Bar of California Board of Legal Specialization
> 
> 
> 
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