12 B 02903

Counsel for the Debtors filed an amended fee application in this chapter 13 case, requesting fees of $3,500 pursuant to the firm’s Attorney-Client Agreement for Legal Services. The Debtors objected to the application, alleging that the firm should receive no fees because its attorneys betrayed the Debtors’ trust in the representation, particularly with respect to negotiations in two lien strip adversary proceedings. The issue before the Court was whether the fees requested were reasonable compensation for actual, necessary services rendered pursuant to section 330 of the Code or whether the fees charged exceeded the reasonable value of the services provided pursuant to section 329. The Court found that the time spent by counsel in providing legal services to the Debtors was both appropriate and necessary for the administration of the case and that the rates charged for those services were commensurate with those charged by comparably skill attorneys. The Court also found, however, that a reduction in fees was justified because of the firm’s role in a miscommunication between attorney and client in the negotiation of a settlement in the lien strip adversaries. Accordingly, the Court sustained the Debtors’ objection in part, awarded counsel fees of $3,000, and disallowed the remaining fees of $500.