(N.D. Ind. Sept. 14, 2016)
The district court affirms the bankruptcy court’s ruling that denied appellant’s (Jones) application for post facto appointment as special counsel to debtor and his administrative expense motion. Debtor filed a routine chapter 7 case and obtained a discharge; however, she failed to disclose an employment discrimination action she filed in federal district court prior to filing her bankruptcy case. She eventually reopened her case and disclosed the lawsuit. The chapter 7 trustee filed an application to employ his law firm, which was granted, and quickly settled the case. Jones sought compensation for representing debtor in her employment discrimination case. Since he did not pursue any argument pursuant to § 327(e), the district court focused solely on § 327(a) and found that Jones’s claim failed because the trustee did not request or consent to his employment. Likewise, Jones’s attempt to obtain an administrative expense priority failed because § 330(a)(1) does not authorize compensation to attorneys not employed under § 327(a).
Attorney for Debtor: Richard Busse
Attorney for Trustee: Kenneth Manning
Attorney for Appellant: Stuart Jones
Author: Robert K. Imperial