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SOUTHERN DISTRICT OF FLORIDA
ALAN L. GOLDBERG, the duly appointed and acting Chapter 7 Trustee for the estate
of Stephen Jay Lawrence (the "Debtor"), by and through his undersigned counsel and pursuant
to Bankruptcy Rule 2014 requests that this Court approve the Trustee's proposed third party
arrangement for compensation of the Trustee's counsel, and in support thereof, respectfully
represents that:
1. On June 12, 1997, the Debtor filed his voluntary Chapter 7 petition and invoked
2. On June 12, 1997, Movant was appointed to serve as the duly qualified and acting
3. On June 20, 1997, Movant filed an Application For Employment ofBerger Davis
& Singerman, P.A. ("BDS") As Attorney For The Trustee Nunc Pro Tunc To June 17, 1998.
4. On June 23, 1997, this Court entered an Order Approving Employment ofBerger
Tropin & Throckmorton, P.A., ("KTT") as Cp-Counsel For The Trustee (Court Paper # 171-1).
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7. The Trustee's retention of KTT was occasioned as a result of the February 5, 1998
Order ' of this Court which determined, in part, that out of an abundance of caution, but without
any specific findings of any actual conflict of interest, that BDS should not pursue the claims of
Any Actual Or Potential Compensation Agreement; and B) To Disqualify Trustee And His
9. The Debtor's Disqualification Motion baldly and without factual basis accused
BDS and the Trustee of having entered into an improper arrangement with the largest creditor
of the -estate, Bear, Stearns & Company ("Bear, Stearns"), wherein Bear, Stearns would
compensate the Trustee and/of BDS for their efforts in this case.
10. At the December 3, 1997 hearing on the Debtor's Motion to Disqualify, the Court
received and considered detailed testimony from the Debtor, his Counsel and the Trustee during
the course of an evidentiary hearing of several hours duration, the transcript of which is 145
pages in length.
1
Order Granting In Part And Denying In Part Trustee's Supplemental Motion For
Employment Of Berger Davis And Singerman, P.A. As Attorneys For The Trustee (Court Paper
#141-1)
2
The Trustee's retention of Kozyak, Tropin & Throckmorton, V.A. was not confined to
issues relating to Frederica Lawrence.
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of any potential compensation agreement between Bear, Stearns and the Trustee and/or his
counsel nor was there any other improper or otherwise inappropriate conduct or activities on the
part of the Trustee or BDS. The Court found that the Debtor had wholly failed to meet his
burden to disqualify the Trustee or BDS. See, March 25, 1998 Order Denying Debtor's Motion
12. The Court also ruled that if any such compensation agreement existed and was
properly disclosed under Bankruptcy Rule 2014, that such an arrangement would be proper and
of benefit to the estate. See, March 25, 1998 Order Denying Debtor's Motion to Compel
disclosure of Debtor and Potential Compensation Agreement and to Disqualify Trustee and His
"The Court finds that the type of third party compensation agreement
complained of by the Debtor is not per se objectionable. Such agreements, if
properly documented,;disclosed and approved by Order of the Bankruptcy Court
are recognized and accepted methods of compensating functionaries of the estate
where no assets or other means to provide compensation exist. Efforts to reach
such agreements which often facilitate the prosecution of claims and the recovery
of money or property for distribution to creditors are to be applauded, not
condemned."
13. On May 5, 1998, the Trustee and his counsel engaged in the first direct discussions
14. Pursuant to Bankruptcy Rule 2014, this pleading is expressly intended to constitute
full compliance with Bankruptcy Rule 2014, and seeks to obtain express authorization from this
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expenses incurred by BDS, KTT, and any experts retained by the Trustee with the approval of
the Bankruptcy Court, in the event that there does not exist sufficient funds in the estate to cover
16. BDS and KTT have each agreed to provide Bear, Stearns with monthly,
informational time-billing reports, which reports shall be appropriately redacted to assure that
17. Nothing contained in this Agreement shall in any manner preclude Bear, Stearns
from filing and prosecuting an objection to any of the fee applications filed by BDS, KTT and/or
18. BDS and KTT shall be first required to seek payment of their allowed fees and
expenses from the available assets of the estate, after the payment therefrom of allowed fees and
the expenses of the Trustee. Bear, Stearns has not agreed to guaranty or pay any fees or
19. In the event that there are insufficient funds within the estate from which to
compensate BDS for its allowed fees at its regular hourly rates, BDS has agreed: A) to accept
reduced rates of twenty (20%) percent off its regularly billed hourly rates for its attorneys; and
B) to credit Bear, Stearns with a one-time waiver of $25,000.00 of fees which may be awarded
by the Court. If there are sufficient funds in the estate to pay the any fees awarded by the Court
to BDS, BDS will receive its regular non-discounted fees, as allowed by the Court. Bear, Steams
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fees and expenses by Bear, Steams under the terms of this Agreement, Bear, Steams shall be
entitled to an immediate reimbursement of any and all fees and expenses which it has paid to
BDS, KTT and/or any Court approved experts under this Agreement (subject to the maintenance
of a proper reserve for the fees and expenses which may be due to the Trustee), upon the filing
of an affidavit with the Court setting forth the dates and amounts of the payments made to BDS,
21. Bear, Stearns, BDS and/or KTT. shall each have the right to terminate their rights
and obligations under this Agreement by providing written notification to each of the parties
hereto, the Office of the United States Trustee and with a copy to the Bankruptcy Court.
Notwithstanding the foregoing, the obligations of Bear, Steams hereunder shall remain valid and
enforcable up through and including the date of the issuance of the notification of termination
22. This Agreement may be executed in counterparts and each such counterpart,
including the signature pages thereof shall be considered original copies for purposes of filing
23. As this Court is well aware, this case has generated extraordinarily complex,
voluminous and detailed litigation. In order to assure the maximum recovery to creditors in what
has been until recently a wholly assetless estate, the Trustee believes that the voluntary agreement
by Bear, Steams to be responsible for the legal fees and expenses incurred on behalf of the estate
in the prosecution of the Trustee's numerous claims against the Debtor and his assets is a
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States District Court, pursuant to an Order dated May 13, 1998, in District Court Docket 98-587-
Cv-Nesbitt.
1. Directing that (i) BDS, KTT and any Court approved experts file their fee
applications in this case in the ordinary course, and that to the extent that there are estate funds
from which any such allowed fees and expenses may be paid, after payment or reserve for fees
and costs which may be awarded to the Trustee, BDS, KTT and /or any Court approved experts
shall receive their compensation from said estate assets and (ii) in the event that BDS, KTT
and/or the Court approved experts are unable to receive their allowed fees and expenses from the
available assets of the estate, Bear Stearns is authorized and directed to pay the fees and expenses
incurred by KTT at par and to pay BDS for its fees (net of the $25,000.00 referenced in
Paragraph 19 (B) above) at the reduced rate of twenty (20%) off the regular hourly rates charged
2. Allowing Bear, Stearns to be reimbursed for any and all fees and expenses paid
to BDS, KTT and/or any Court approved experts under this Agreement from estate assets once
realized (and subject to the maintenance of a proper reserve for the fees and expenses to the
Trustee) upon the filing of an Affidavit setting forth the dates and amounts of the fees and
expenses advanced to BDS, KTT and/or any Court approved experts; and
3. Granting such other and further relief as may be just and proper.
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We HEREBY CERTIFY that we are admitted to the Bar of the United States
District Court for the Southern District of Florida and we are in compliance with the additional
I(HUU^V I.AM.
Paul Steveh Singe^naii, Esq. Howard Kahn, Esq.
Fla. Bar No. 378860 Fla. Bar No. 0724416
Daniel S. Taub
Mark D. Cohen, Esq. Managing Director
Fla. Bar No. 347345
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We HEREBY CERTIFY that we are admitted to the Bar of the United States
District Court for the Southern District of Florida and we are in compliance with the additional
Daniel S. Taub
Mark D. Cohen, Esq. Managing Director
Fla. Bar No. 347345
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6/2/98 7
We HEREBY CERTIFY that we are admitted to the Bar of the United States
District Court for the Southern District of Florida and we are in compliance with the additional
Daniel S. Taub
MarkUAjiuoften, esq. Managing Director
Fla. Bar % V 7 3 4 5
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6/2/98
We HEREBY CERTIFY that we are admitted to the Bar of the United States
District Court for the Southern District of Florida and we are in compliance with the additional
)aniel S. Taub
Mark D. Cohen, Esq. Managing Director
Fla. Bar No. 347345
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6/2/98
I HEREBY CERTIFY that a true and correct copy of the foregoing Trustee's Motion
For Approval Of Compensation Arrangement For Counsel To And Experts For The Trustee And
Bankruptcy Rule 2014 Disclosures to all parties on the attached Service List via regular, first
By:
Paul SteveW Singehnan
Florida Bar No. 0378860
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Debtor.
/
NOTICE OF HEARING
•NOTICE IS HEREBY GIVEN that a hearing will be held in the above matter at
By:
Courtroom Deputy
The movant, or movant's counsel, James H. Fierberg, shall serve a copy of this notice
and, unless previously served, the above-described pleading to all required parties and
within the time frames required by the Federal Rules of Bankruptcy Procedure, Local
Rules, or orders of the court, and shall file this original notice and
completed certificate of service (printed on reverse) with the court.
All moving or objecting parties shall bring to the hearing, a proposed order,
sustaining their position, with appropriate copies and envelopes.