RICHARD J. CORBI by Thomson/West.

Transcription

1 Update: Postpetition Attorney s Fees Following the Supreme Court Decision of Travelers Casualty and Surety Co. of America v. Pacific Gas and Electric Co. RICHARD J. CORBI INTRODUCTION The Supreme Court, in Travelers Cas. and Sur. Co. of America v. Pacific Gas and Elec. Co. 1 (Travelers), held that the Ninth Circuit s Fobian rule, 2 which held that claims of creditors grounded on prepetition contracts for attorney s fees for litigating bankruptcy issues must be disallowed, 3 had no support in 502 of the Bankruptcy Code or elsewhere. 4 In Travelers, the Supreme Court refused to address the arguments under other bankruptcy theories as grounds to disallow postpetition attorney s fees pursuant to a prepetition contract because such arguments were neither raised nor addressed in the lower courts. 5 The Supreme Court explained: we express no opinion with regard to whether, following the demise of the Fobian rule, other principles of bankruptcy law might provide an independent basis for disallowing Travelers claim for attorney s fees. 6 The Court remanded Travelers. 7 Several arguments to disallow the postpetition attorney s fees were addressed in an amicus brief by amici law professors in support of the respondent. 8 First, Travelers ignored precedent directly on point in the Supreme Court s decision of Randolph & Randolph v. Scruggs, 9 which held that a creditor s general unsecured claim for legal fees incurred by the creditor would not be allowed under a prepetition contract if the ser- The author is an associate in the Financial Restructuring Group of the New York City office of Lowenstein Sandler, P.C. and may be reached at rcorbi@lowenstein.com. The author wishes to thank Professor Richard Lieb of Cooley Godward Kronish LLP of New York City and of the St. John s University School of Law LL.M. in Bankruptcy Program for his guidance and the opportunity to write this article. 341

2 342 NORTON JOURNAL OF BANKRUPTCY LAW AND PRACTICE [VOL. 17] vices were not beneficial to the estate. 10 Scruggs involved a claim for preparing a deed of assignment prior to bankruptcy, in which the deed provided that the assignee would pay reasonable attorney s fees. 11 Four months later, the debtor filed for bankruptcy and the appointed trustee set aside the deed of assignment. 12 The creditor filed a claim for professional services rendered in preparing the deed, advising the assignee, defending a state court lawsuit to wind up the debtor corporation, and, during the bankruptcy, in resisting the debtor s efforts to avoid being adjudicated a bankrupt. 13 The Scruggs Court allowed the prepetition claim for preparing the deed of assignment but did not allow any claim that did not benefit the estate. 14 Scruggs emphasized that the services may be allowed so far as they benefited the estate[.] No ground appears for allowing the item for services in resisting an adjudication in bankruptcy. 15 Second, the Travelers Court did not address the argument that 506(b) categorically disallows attorney s fees pursuant to a prepetition contract because such arguments were not addressed in the proceedings below or in the petition for certiorari. 16 The respondent argued that 506(b) authorizes claims for contractual attorney s fees to the extent the creditor is oversecured, but disallows such claims to the extent the creditor is either not oversecured or [like Travelers] completely unsecured. 17 The respondent further argued that the structure and purpose of the Bankruptcy Code, examined against the backdrop of pre-code bankruptcy law, confirm that Congress did not intend to allow unsecured creditors to recover attorney s fees. 18 Those arguments, which the Supreme Court declined to address, will presumably be before the Ninth Circuit Court of Appeals on the remand. This article provides an update of decisions following the Supreme Court s indecision in Travelers, 19 and an exploration of one commentator s new plain meaning textual argument of 502(b), 506(a), and 506(b) as a basis to deny postpetition attorney s fees to unsecured creditors on the basis of a prepetition contract. DECISIONS THAT FOLLOW TRAVELERS 1. In re Qmect, Inc. One of the first cases decided after Travelers was Qmect, 20 which held that the creditors were entitled to reasonable postpetition attorney s fees on its unsecured claim against the debtors. 21 The court addressed the 506(b) argument that the Supreme Court refused to address. 22 The debtors in Qmect argued that, since a secured claim shall be allowed fees to the extent that the claim is secured by the property, the Bankruptcy Code implicitly means that postpetition fees are unavailable to an unse-

3 POSTPETITION ATTORNEY S FEES 343 cured creditor under a prepetition contract provision. 23 The court, however, disagreed. The court ruled that the debtors reading of 502(b) and 506(b) was too strained to be persuasive. 24 The court first explained that since 506(b) is titled Determination of Secured Status, it is not a logical place to provide for the disallowance of an unsecured claim. 25 If Congress, in enacting the Bankruptcy Code, had wanted to disallow claims for post-petition attorney s fees, the logical place for it to have done so was surely 11 U.S.C. 502(b). 26 In addition, 506(b), the court explained, does not distinguish between prepetition and postpetition attorney s fees. 27 The court concluded that an important policy in bankruptcy is the preservation of nonbankruptcy legal rights except to the extent necessary to facilitate the purpose of the bankruptcy proceeding. Absent a clear provision of the Bankruptcy Code modifying a creditor s nonbankruptcy legal rights, the Court concludes that those rights should be deemed to be left intact In re Busch In Busch, 29 the Bankruptcy Appellate Panel (BAP) for the Tenth Circuit affirmed the bankruptcy court s award of attorney s fees to the wife in connection with state court divorce proceedings. 30 The divorce decree required the debtor to assume, pay, and hold harmless his ex-wife from the second mortgage payments on the parties home. 31 The court held that the mortgage payments were in the nature of support and nondischargeable under 523(a)(5) of the Code. 32 When the debtor filed his third Chapter 13 case, the ex-wife filed an unsecured priority proof of claim for debts under the divorce decree and moved to have the automatic stay lifted to seek remedies against the debtor for failure to pay the second mortgage obligation, which the Tenth Circuit BAP granted. 33 In the debtor s prior case before the BAP, the BAP ruled that the lower courts correctly held that the mortgage obligation was in the nature of support because the debtor s child could live in the home until the age of The bankruptcy court awarded the ex-wife attorney s fees pursuant to a Utah state statute which states that: In any action to enforce an order of custody, parent-time, child support, alimony, or division of property in a domestic case, the court may award costs and attorney fees upon determining that the party substantially prevailed upon the claim or defense. The court, in its discretion, may award no fees or limited fees against a party if the court finds the party is impecunious or enters in the record the reason for not awarding fees. 35 The BAP relied upon Travelers and the Utah statute to uphold the attorney s fees award: Although in Travelers, the issue was raised in the context of attorney s fees which were shifted by contract, the reasoning in Travelers

4 344 NORTON JOURNAL OF BANKRUPTCY LAW AND PRACTICE [VOL. 17] is equally applicable to attorney s fees shifted by state statute. This is particularly so given the Supreme Court s emphasis on the long recognized principle that the basic federal rule in bankruptcy is that state law governs the substance of claims. Further, the Supreme Court stated [p]roperty interests are created and defined by state law, and [u]nless some federal interest requires a different result, there is no reason why such interests should be analyzed differently simply because an interest party is involved in a bankruptcy proceeding In re Hoopai The Hoopai 37 court vacated and remanded the creditor s award of attorney s fees because the creditor was not the prevailing party pursuant to the Hawaii state statute that provides for awards of reasonable attorney s fees to the prevailing party. In Hoopai, a mortagee conducted a strict foreclosure sale, which was followed by the making of a prepetition contract by the debtor to sell the property for a price higher than was bid at the foreclosure sale. Either price was sufficient to pay the mortgage debt in full. The debtor then filed a Chapter 13 case. Despite sufficient sale proceeds for full payment of the mortgage debt, the mortgagee asserted that its sale had operated to terminate the debtor s property interest and sought to uphold the foreclosure sale. The mortgagee won on that issue in the bankruptcy court, but the debtor prevailed on appeal and was thus held to be the prevailing party within the meaning of the applicable state statute. In so holding, the court, relying on Travelers, observed that the debtor, as the prevailing party, would be entitled to recover from the mortgagee postpetition attorney s fees under the state statute. 4. In re Treon In In re Treon, 38 the Bankruptcy Court for the District of Oregon denied the debtor s request for postpetition attorney s fees sought under a prepetition employment contract. The court found that the debtor had breached the contract and thus did not have to reach the question of whether such fees were recoverable. The court did, however, make the following observation: The extent to which a debtor prevails in dischargeability litigation involving a contract that contains an attorney fee clause can recover attorney fees is unresolved because of the recent decision in Travelers. 5. In re Smith In In re Smith, 39 the Bankruptcy Court for the Western District of Missouri awarded the creditor postpetition attorney s fees as part of its

5 POSTPETITION ATTORNEY S FEES 345 unsecured claim by relying on the Travelers rationale that claims are enforceable under state law unless the claim is specifically disallowed under 502(b) and the parties prepetition fee agreement gave rise to a contingent, unliquidated attorney s fees claim In re Crafts Retail Holding Corp. Travelers cannot be used as a last resort for attorneys who request fees but were never retained and approved by a court order pursuant to 327 and 330 of the Bankruptcy Code. 41 Crafts Retail 42 denied the attorneys their fees because they were never retained by the court and there was not an enforceable agreement providing for attorney s fees In re Britt In In re Britt, 44 the Bankruptcy Appellate Panel for the Ninth Circuit, relying on Travelers, awarded attorney s fees pursuant to a contract clause. 45 The appeal arose out of a third-party complaint by a bank against a car dealer to recover damages incurred in the avoidance of its security interest in a truck by a Chapter 7 trustee. 46 The bank s security interest was avoided because it was not perfected within 30 days after the debtor received possession of the vehicle and thus fell outside of the safe-harbor window under 547(c)(3) of the Code. 47 The bank moved for summary judgment by arguing that it lost its lien because the dealer did not perfect the lien in a timely manner pursuant to Arizona law. 48 The court denied summary judgment to the bank and awarded the dealer attorney s fees. 49 The bank financed purchases of vehicles by customers of the dealer pursuant to a sales installment contract, which contained a provision that the prevailing party would be entitled to attorney s fees and costs incurred in any legal proceeding to enforce the sales installment agreement. 50 The BAP relied on Travelers to award the dealer attorney s fees pursuant to the provision in the sales installment contract and explained that, under California law, [a]ttorney s fees are allowable as costs, but only if they are authorized by contract or law. In any action on a contract, the prevailing party is entitled to reasonable attorney s fees and costs where the contract explicitly provides that one of the parties shall be awarded fees and costs incurred to enforce the provisions of the contract In re SNTL Corp. The Bankruptcy Appellate Panel for the Ninth Circuit, in In re SNTL Corp., 52 followed the Qmect rationale to award postpetition attorney s fees. 53 Like Qmect, the SNTL court rejected the notion that 506(b) preempts postpetition attorney s fees for all except oversecured creditors. 54

6 346 NORTON JOURNAL OF BANKRUPTCY LAW AND PRACTICE [VOL. 17] Next, the court explained that 502(b) does not specifically disallow attorney s fees. 55 The court continued: [b]ecause we hold that attorney s fees arising out of a prepetition contract but incurred postpetition fall within the Bankruptcy Code s broad definition of claim, we reject the position of the majority line of cases that section 502(b) precludes such fees. 56 The BAP also did not find persuasive the notion that United Sav. Ass n of Texas v. Timbers of Inwood Forest Associates, Ltd. 57 (Timbers) is a basis to disallow attorney s fees. 58 The BAP explained that: Timbers provided that an undersecured creditor could not receive postpetition interest on the unsecured portion of its debt. This holding is consistent with section 502(b)(2), which specifically disallows claims for unmatured interest. Inasmuch as section 502(b) does not contain a seminal prohibition against attorney s fees, the comparison between the current issue and that presented in Timbers is not persuasive. 59 Finally, the court refused to enter into a policy debate on the issue because the Bankruptcy Code provides the answer, stating that it is the responsibility of Congress to correct statutory dysfunctions and to resolve difficult policy questions embedded in the statute. 60 DECISIONS THAT DO NOT FOLLOW TRAVELERS 9. In re Electric Machinery Enterprises, Inc. In In re Electric Machinery Enterprises, Inc., 61 the Bankruptcy Court for the Middle District of Florida examined the grounds to disallow postpetition attorney s fees pursuant to a prepetition fee agreement that Travelers refused to examine. 62 The bankruptcy court denied an unsecured creditor s claim for postpetition attorney s fees for four reasons. First, the plain language of 506(b) and the statutory construction principle of expression unius est exclusion alterius (the exclusion of one thing is the exclusion of another) explain that unsecured creditors are not entitled to postpetition attorney s fees and costs. 63 If Congress intended for unsecured creditors to receive post-petition attorney s fees, then it would have done so explicitly by authorizing unsecured creditors to collect fees under section 506(b). 64 Second, Timbers requires disallowance of an unsecured creditor s right to collect fees and costs. 65 Since Timbers permitted postpetition interest to be paid out of an equity cushion, an unsecured creditor who had no equity cushion fell within the general rule disallowing postpetition interest. 66 Therefore, this rationale applies equally to disallow postpetition attorney s fees to unsecured creditors. 67 Third, the plain language of 502(b), which states that the

7 POSTPETITION ATTORNEY S FEES 347 court will determine the amount of a claim as of the date of the filing, bars postpetition attorney s fees because the unsecured creditor did not have the postpetition attorney fee claim as of the date of the bankruptcy petition. 68 Fourth, to award postpetition attorney s fees would violate the equitable distribution scheme of the Bankruptcy Code. 69 The court explained that to permit these fees would permit certain types of unsecured creditors, typically holders of contract claims under agreement with attorneys fee provisions, to recover their fees while other unsecured creditors would not be able to recover fees as part of their unsecured claim. 70 In addition, the court examined Scruggs and applied the benefit to the estate requirement to award fees. It also considered the convenience of administering a bankruptcy case by having finality to the claims process by not having to encounter ever-accruing attorneys fees claims. 71 The Electric Machinery court followed the argument made by the amici law professors in Travelers. 10. In re WCS Enterprises, Inc. Likewise, the WCS 72 court followed the argument set forth by the amici law professors in Travelers. The bankruptcy court held that the unsecured creditor could not recover the postpetition portion of the claimed attorney s fees. 73 In WCS, the debtor operated a landscape construction business but was forced into bankruptcy as a result of the depressed real estate market. 74 The creditor filed a proof of claim that included a claim for attorney s fees because the credit application provided that the debtor would pay attorney s fees of 33% of the unpaid balance and interest if the account was referred to an attorney for collection. 75 The prepetition attorney s fees were $180, while the postpetition amount was $3,650 for defending against the debtor s objection to the creditor s claim. 76 First, the court explained that although 502(b) does not expressly contain a provision that disallows postpetition attorney s fees, that section has to be read in conjunction with 506(b). 77 The court continued to explain that a secured creditor can recover post-petition interest and attorneys fees otherwise provided by contract or state law only to the extent it has collateral worth more than the amount of its claim. 78 By contrast, according to the court, an undersecured creditor is entitled to postpetition attorney s fees, which follows that a completely unsecured creditor is not entitled to attorney s fees. 79 Second, the court entertained one of theories to disallow postpetition attorney s fees that Travelers refused to consider. 80 The court relied on the amici law professors brief that discussed Scruggs, in that fees are only allowed to the extent that they are beneficial to the estate. It observed that the Scruggs policy is reflected in 503(b)(3) and (4), which allows a bankruptcy court to award attorney s fees as an admin-

8 348 NORTON JOURNAL OF BANKRUPTCY LAW AND PRACTICE [VOL. 17] istrative expense priority claim when the creditor recovers property for the benefit of the estate or when a substantial contribution is made in the Chapter 11 case. 81 Based on Scruggs and the amici law professors brief in Travelers, the court held that the creditor could not demonstrate that the fees incurred in filing the proof of claim and litigating its entitlement to attorney s fees were beneficial to the estate In re Brooks In Brooks, 83 the Bankruptcy Court for the District of New Jersey reduced the creditor s postconfirmation Chapter 13 attorney s fees claim because the services provided were routine, did not present complex issues, and were ministerial in nature, and the fees were high compared to the ones normally charged in the locality. 84 The Brooks court reduced the fee award while acknowledging the Travelers rule that attorney s fees in litigating bankruptcy issues are allowed. 85 The creditor held two mortgages on the debtors property in the amount of $81,768 and $4,157, respectively. 86 The mortgages included a provision entitled Collection Costs whereby the debtors would pay all court costs permitted by law plus 20%. 87 The debtors eventually sold the property for $260,000 in order to pay the two mortgages. 88 Afterwards, the bank included attorney s fees in its proof of claim in the amount of $7, for services in connection with two relief from stay motions and filing amended proofs of claim, which they argued was not excessive but a 17% discount. 89 The court explained that the American Rule on attorney s fees is followed in New Jersey and that fees incurred in the bankruptcy process are not categorically disallowed. 90 The court reduced the fee award for two reasons. First, the court explained that 506(b) is not relevant because 506(b) does not provide for postconfirmation fees. 91 Second, the contract provision providing for collection costs is enforceable under New Jersey law, which states: [i]t has long since been well settled that our courts will enforce the customary attorney-fee clause in a promissory note or other instrument of obligation to the extent that the attorney fees requested as part of the note are reasonable. 92 The court continued to explain that although 20% collection costs are reasonable in the commercial context, that amount and the reduced amount sought by the bank were not reasonable in this Chapter 13 case because the fees incurred by the bank were for ministerial tasks and, therefore, not reasonable In re Astle The Bankruptcy Court for the District of Idaho in In re Astle 94 denied the creditor s claim for attorney s fees based on 506(b), a theory that

9 POSTPETITION ATTORNEY S FEES 349 the Travelers Court refused to entertain as a possible theory to disallow attorney s fees for an unsecured creditor. 95 In Astle, the Chapter 12 debtors, in order to use electricity, gave Idaho Power a first position, postpetition lien in their herd and milk receivables. 96 Idaho Power eventually made an application to the court for fees pursuant to 506(b). 97 The court examined 506(b) s language that allows a claim for fees pursuant to an agreement or State statute, found that Idaho Power did not have a fee agreement with the debtor, and ruled that Idaho Power could not recover under a State statute because its lien on the debtor s receivables was granted pursuant to 364(d)(1) of the Code, a federal statute. 98 Idaho Power attempted to rely on an Idaho state statute that awarded fees to a prevailing party in a civil action on a commercial transaction. 99 As a result, since Idaho Power conceded that there was no fee agreement with the debtor and that its reliance on the Idaho statute was misplaced, its fee application was denied. 100 WHERE ARE POSTPETITION ATTORNEY S FEES GOING NOW? At least one commentator has provided a different method to disallow postpetition attorney s fees pursuant to a prepetition fee agreement. 101 Professor Mark Scarberry has proposed that the plain meaning of 502(b), 506(a), and 506(b) provide a three-step system which precludes the allowance of postpetition attorney s fees as unsecured claims. 102 First, Scarberry explains that 502(b) allows a claim in an amount determined at the petition date. Under his analysis, such fees are only allowed in their amount as of the petition date and that subsequent increased amounts would be part of the postpetition claim not allowed under 502(b). 103 Second, the allowed amount of the claim, as used in 506(a), determines the secured and unsecured amounts of the creditor s claim. 104 Since 506(a) refers to the allowed amount of the claim of [the] creditor, it is a reference to 502(b), according to Scarberry. 105 Under 506(a), two amounts, the allowed amount of the claim and the value of the collateral, must be determined, which are then compared and bifurcated with the allowed claim being secured to the extent of the value of the collateral, and any remaining amount creates an unsecured claim. 106 As a result, 506(a) takes the amount of the allowed claim under 502(b) and either treats it as completely secured or bifurcates it into a secured and unsecured amount. 107 Third, 506(b) provides allowance for an additional amount, in particular, fees, interest, and costs beyond the allowed amount under 502(b). 108 Scarberry points to the words, reasonable fees, costs, and charges under 506(b) which describe what 506(b) does for an oversecured claim. 109 The fees, costs,

10 350 NORTON JOURNAL OF BANKRUPTCY LAW AND PRACTICE [VOL. 17] and charges shall be allowed under 506(b) in a similar way that postpetition interest is allowed so long as an agreement or statute provides for them. 110 In relying on the Supreme Court s decision in U.S. v. Ron Pair Enterprises, Inc., 111 Scarberry explains that 506(b) adds interest and fees to the prepetition amount of the claim, and since 502(b) determines the prepetition amount of the claim, which is as of the date of the filing of the bankruptcy case, the amount of the secured claim held by an oversecured creditor prior to the application of 506(b) cannot include postpetition attorney s fees. 112 Scarberry concludes: Because post-petition fees are not allowed by section 502(b) but rather by section 506(b), we are left with the clear conclusion that post-petition fees cannot be allowed in favor of undersecured creditors or wholly unsecured creditors, neither of whom receive any benefit from section 506(b). That conclusion establishes, as a matter of the plain meaning of sections 502(b), 506(a), and 506(b), as they deal with claims, that post-petition fees are not allowable on unsecured claims. 113 CONCLUSION The post-travelers wave of attorney s fees cases tilts towards permitting fees. However, the cases that disallow the fees illustrate that the Supreme Court s indecision will force the courts to consider the issue anew. NOTES 1. Travelers Cas. and Sur. Co. of America v. Pacific Gas and Elec. Co., 127 S. Ct. 1199, 167 L. Ed. 2d 178, 47 Bankr. Ct. Dec. (CRR) 265, 57 Collier Bankr. Cas. 2d (MB) 314, Bankr. L. Rep. (CCH) P (U.S. 2007). 2. In re Fobian, 951 F.2d 1149, Bankr. L. Rep. (CCH) P (9th Cir. 1991) (abrogated by, Travelers Cas. and Sur. Co. of America v. Pacific Gas and Elec. Co., 127 S. Ct. 1199, 167 L. Ed. 2d 178, 47 Bankr. Ct. Dec. (CRR) 265, 57 Collier Bankr. Cas. 2d (MB) 314, Bankr. L. Rep. (CCH) P (U.S. 2007)). 3. Fobian, 951 F.2d at See Travelers, 127 S. Ct. at See Travelers, 127 S. Ct. at 1207 (citing Cooper Industries, Inc. v. Aviall Services, Inc., 543 U.S. 157, (2004)). 6. See Travelers, 127 S. Ct. at See Travelers, 127 S. Ct. at See Brief in Support of Respondent by Amici Curiae Professors Richard Aaron, et. al., 2006 WL (Dec. 22, 2006). 9. Scruggs, 190 U.S. 533, 23 S. Ct. 710, 47 L. Ed (1903). 10. See Scruggs, 190 U.S. at See Scruggs, 190 U.S. at See Scruggs, 190 U.S. at See Scruggs, 190 U.S. at 534.

11 POSTPETITION ATTORNEY S FEES See Scruggs, 190 U.S. at See Scruggs, 190 U.S. at See Travelers, 127 S. Ct. at See Travelers, 127 S. Ct. at See Travelers, 127 S. Ct. at See Ralph Brubaker, Allowance of Attorney s Fees to an Unsecured Creditor: The Supreme Court Has Spoken (and Said Nothing), 27 No. 5 Bankruptcy Law Letter 1 (May 2007) ( Thus we are left with no definitive resolution of either the Travelers case itself or the broader issue of whether unsecured creditors can, as a component of their unsecured claims, be allowed postpetition attorney s fees provided for under a prepetition contractual fee provision ). 20. In re Qmect, Inc., 368 B.R. 882, 57 Collier Bankr. Cas. 2d (MB) 300 (Bankr. N.D. Cal. 2007). 21. See Qmect, 368 B.R. at See Qmect, 368 B.R. at See Qmect, 368 B.R. at See Qmect, 368 B.R. at See Qmect, 368 B.R. at See Qmect, 368 B.R. at See Qmect, 368 B.R. at See Qmect, 368 B.R. at In re Busch, 369 B.R. 614, 57 Collier Bankr. Cas. 2d (MB) 202 (B.A.P. 10th Cir. 2007). 30. See Busch, 369 B.R. at See Busch, 369 B.R. at See Busch, 369 B.R. at See Busch, 369 B.R. at See Busch, 369 B.R. at See Busch, 369 B.R. at 624 (citing Utah Code Ann (2) (2006)). 36. See Busch, 369 B.R. at 625 (citations omitted). 37. In re Hoopai, 369 B.R. 506 (B.A.P. 9th Cir. 2007). 38. In re Treon, 2008 WL (Bankr. D. Or. 2008). 39. In re Smith, 2008 WL (Bankr. W.D. Mo. 2008). 40. See Smith, 2008 WL at * See In re Crafts Retail Holding Corp., 378 B.R. at Crafts Retail, 378 B.R. 44, 49 Bankr. Ct. Dec. (CRR) 28 (Bankr. E.D. N.Y. 2007). 43. See Crafts Retail, 378 B.R. at In re Britt, 2007 WL (B.A.P. 9th Cir. 2007). 45. See Britt, 2007 WL at * See Britt, 2007 WL at *1 47. See Britt, 2007 WL at * See Britt, 2007 WL at *1 49. See Britt, 2007 WL at *1 50. See Britt, 2007 WL at * See Britt, 2007 WL at *21-22 (citations omitted). 52. In re SNTL Corp., 380 B.R. 204, 49 Bankr. Ct. Dec. (CRR) 79 (B.A.P. 9th Cir. 2007). 53. See SNTL Corp., 380 B.R. at See SNTL Corp., 380 B.R. at See SNTL Corp., 380 B.R. at 220.

12 352 NORTON JOURNAL OF BANKRUPTCY LAW AND PRACTICE [VOL. 17] 56. See SNTL Corp., 380 B.R. at United Sav. Ass n of Texas v. Timbers of Inwood Forest Associates, Ltd., 484 U.S. 365, 108 S. Ct. 626, 98 L. Ed. 2d 740, 16 Bankr. Ct. Dec. (CRR) 1369, 17 Collier Bankr. Cas. 2d (MB) 1368, Bankr. L. Rep. (CCH) P (1988). 58. See SNTL Corp., 380 B.R. at See SNTL Corp., 380 B.R. at See SNTL Corp., 380 B.R. at In re Electric Machinery Enterprises, Inc., 371 B.R. 549, 48 Bankr. Ct. Dec. (CRR) 142 (Bankr. M.D. Fla. 2007). 62. See Electric Machinery, 371 B.R. at See Electric Machinery, 371 B.R. at 550 (citations omitted). 64. See Electric Machinery, 371 B.R. at 551 (citations omitted). 65. See Electric Machinery, 371 B.R. at See Electric Machinery, 371 B.R. at See Electric Machinery, 371 B.R. at See Electric Machinery, 371 B.R. at See Electric Machinery, 371 B.R. at See Electric Machinery, 371 B.R. at 552 (citations omitted). 71. See Electric Machinery, 371 B.R. at In re WCS Enterprises, Inc., 381 B.R. 206, 49 Bankr. Ct. Dec. (CRR) 49 (Bankr. E.D. Va. 2007). 73. See WCS, 381 B.R. at See WCS, 381 B.R. at See WCS, 381 B.R. at See WCS, 381 B.R. at See WCS, 381 B.R. at See WCS, 381 B.R. at 209 (italics in original). 79. See WCS, 381 B.R. at 209 (citations omitted). 80. See WCS, 381 B.R. at See WCS, 381 B.R. at 210 (citing Scruggs, 190 U.S. at 539; Brief in Support of Respondent by Amici Curiae Professors Richard Aaron, et at., 2006 WL (Dec. 22, 2006)) 82. See WCS, 381 B.R. at In re Brooks, 2007 WL (Bankr. D. N.J. 2007). 84. See Brooks, 2007 WL at * See Brooks, 2007 WL at *3 (citing Travelers). 86. See Brooks, 2007 WL at * See Brooks, 2007 WL at * See Brooks, 2007 WL at * SeeBrooks, 2007 WL at * See Brooks, 2007 WL at *3 (The American Rule holds that each party is responsible for its own litigation costs, including attorney s fees, with two exceptions. First, where statutory provisions allow for fee allowance. Second, where a contractual provision allocates attorney s fees) (citing Travelers, 127 S. Ct. at 1203, 1206). 91. See Brooks, 2007 WL at * See Brooks, 2007 WL at *5 (quoting Hatch v. T&L Associates, 319 N.J. Super. 644, 647 (App. Div. 1999)). 93. See Brooks, 2007 WL at * In re Astle, 364 B.R. 735, Bankr. L. Rep. (CCH) P (Bankr. D. Idaho 2007).

13 POSTPETITION ATTORNEY S FEES See Astle, 364 B.R. at 737, n See Astle, 364 B.R. at See Astle, 364 B.R. at See Astle, 364 B.R. at See Astle, 364 B.R. at 739 n. 5 (citing Idaho Code (3)) See Astle, 364 B.R. at Mark S. Scarberry, Interpreting Bankruptcy Code Sections 502 and 506: Post-Petition Attorney s Fees in a Post-Traveler s World, 15 Am. Bankr. Inst. L. Rev. 611 (2007) See Scarberry, 15 Am. Bankr. Inst. L. Rev. at , See Scarberry, 15 Am. Bankr. Inst. L. Rev. at See Scarberry, 15 Am. Bankr. Inst. L. Rev. at See Scarberry, 15 Am. Bankr. Inst. L. Rev. at See Scarberry, 15 Am. Bankr. Inst. L. Rev. at See Scarberry, 15 Am. Bankr. Inst. L. Rev. at See Scarberry, 15 Am. Bankr. Inst. L. Rev. at See Scarberry, 15 Am. Bankr. Inst. L. Rev. at See Scarberry, 15 Am. Bankr. Inst. L. Rev. at U.S. v. Ron Pair Enterprises, Inc., 489 U.S. 235, 109 S. Ct. 1026, 103 L. Ed. 2d 290, 18 Bankr. Ct. Dec. (CRR) 1150, Bankr. L. Rep. (CCH) P 72575, 89-1 U.S. Tax Cas. (CCH) P 9179, 63 A.F.T.R.2d (1989) See Scarberry, 15 Am. Bankr. Inst. L. Rev. at See Scarberry, 15 Am. Bankr. Inst. L. Rev. at 651.