In re Computer World Solutions, Inc.

Attorney Daniel A. Zazove and the Perkins Coie law firm filed a Motion and Application for Allowance of Compensation as Debtor's Attorney. Chapter 7 Trustee Steven Radtke and Robert Stein, a defendant in a related adversary, objected to Counsel’s Application for Compensation, arguing that subsequent to the entry of the retention order, Zazove and Perkins Coie received other compensation from an Assignee or Fifth Third Bank without leave of court as required by 11 U.S.C. § 330(a)(1). Mr. Zazove argued that those funds were for services rendered to the Assignee for the Benefit of Creditors, not the bankruptcy estate. Over Stein’s objection, the Court granted Counsel’s application for compensation. In the spirit of abstention, the Court declined to require the Assignee to submit to bankruptcy court jurisdiction after he was excused from the Section 543 delivery requirement. Bankruptcy Code Section 330(a)(1) governs compensation to professionals retained by a bankruptcy estate; it has no application to the payment of an assignee’s attorney for legal services rendered in the operation of an assignment for the benefit of creditors.

Date: 
Friday, August 24, 2012