Show notes
In Dale & Klein L.L.P. v. Owsley (In re Owsley), No. 22-40283, 2023 WL 2424592 (5th Cir. Mar. 9, 2023), the Fifth Circuit upheld a bankruptcy court's order to cut a law firm's attorney's fees by just under 35% for unethical and discourteous behavior while representing a debtor in a chapter 13 bankruptcy case. You can view the opinion here. And you can view my blog post at HigherCourt.us.
BOOK RECOMMENDATION
Today's book recommendation is Jonathan Friedland's Commercial Bankruptcy Litigation. This two-volume set is an essential guide for bankruptcy and non-bankruptcy attorneys. View the book on Amazon. I personally recommend this book, and this is not sponsored. But I must disclose that this is an Amazon affiliate link. This means I earn a small commission if you use this link to buy the book. Thank you.
UPCOMING EVENTS
Virtual Happy Hour, American Bankruptcy Institute, March 29, 8:00 pm PDT.
Implications of SVB's Collapse and the Current Banking Crisis, CLE, American Bankruptcy Institute, March 31, 2023, 8:00 am PDT.
California Cannabis Operators in Distress, CLE including Elimination of Bias, California Lawyers Association, April 20, 2023, 12:00 pm PDT
TRANSCRIPT
Hello to all you lawyers, fiduciaries, and bankruptcy fans. It is Thursday, March 23, 2023. I am your host, Reno Fernandez. Let’s get on with the show!
In an unpublished decision on March 3, 2023, the Fifth Circuit upheld a bankruptcy court’s order slashing attorney’s fees for discourteous behavior.
We are talking about Dale & Klein v. Owsley. I’ll put a link in the show notes.
This was a chapter 13 case, and the debtor got the bankruptcy court's approval to hire Dale & Klein for work on family law and divorce issues, including conservatorship and child support.
But the firm’s work did not go smoothly. For example, when the ex-husband was deposed, lawyers for both sides were incredibly nasty to one another. From the description in the opinion, it seems like the nastiness was about even on both sides.
But when the firm went to get approval for fees and expenses of about $128,000, the court found the behavior of debtor’s counsel to be “unethical and discourteous.”
Here is the interesting part: the court held that discourteous behavior itself diminishes the value of an attorney’s services. Accordingly, the court disallowed about $44,000, which is just under 35%.
The debtor appealed, and—interestingly—no one defended the appeal. But the Fifth Circuit reviewed the order anyway and affirmed.
Who is to say who is right? I’m no fan of discourteous behavior, but I’m no fan of working for free, either. Anyway, for more on this, check out my article on www.HigherCourt.us.
Now for upcoming events. At the American Bankruptcy Institute, come get virtually happy at their virtual happy hour on March 29, 8:00 pm Pacific, and witness the implications of Silicon Valley Bank’s collapse for CLE credit on March 31, at 8:00 am pacific. Then see Cannabis Operators in Distress by the California Lawyers Association on April 20 at noon. I’ll put links to all the events in the show notes.
And now my book recommendation of the day: the second edition of Jonathan Friedland’s two-volume Commercial Bankruptcy Litigation was just published, and it promises to be extraordinary. It is very fresh, updated, and my copy is already in the mail. I’ll post a link down in the show notes, so you can check it out.
Lastly, if you found this useful, please subscribe and leave a positive review.
I am Reno Fernandez, and I handle only bankruptcy- and insolvency-related appeals, at all levels, including the U.S. Supreme Court. If you have questions or just want to chat, please feel free to reach out. Thank you.
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