IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
RAYMOND T. HAAS, No. 93-12708
Memorandum of Decision
Debtor Raymond Haas originally filed a Chapter 7 bankruptcy petition. From the schedules,
it appeared that there would be no dividend to unsecured creditors. One creditor, Debbie
Chutuk, was convinced that Haas had made avoidable fraudulent transfers. She obtained leave
from this court to pursue the actions in state court, with the provision that any recovery would
belong to the estate. Thereafter, Haas converted his case to Chapter 13 and obtained
confirmation of a plan calling for 100% payment to his creditors. He settled the Chutuk lawsuit
by obtaining title to the disputed properties and agreeing not to transfer them until after he has
completed his plan.
The matter now before the court is Chutuk's application to recover her litigation costs of
$18,106.10 as an "equitable lien." This is more or less typical of Chutuk's efforts in this case;
she is basically in the right, but unable to articulate a specific basis in the law for what she
wants. The court treats her application as a request for an administrative priority claim pursuant
to section 503(b)(4) of the Bankruptcy Code.
The court finds that Chutuk is entitled to recover at least some of her attorney fees and costs
pursuant to section 503(b)(4) and section 503(b)(3)(B) because they were incurred in
recovering property for the benefit of the estate after leave of court. If it were not for Chutuk,
the creditors would have received nothing. Because she pursued Haas, he converted the case
to Chapter 13 and agreed to pay creditors in full.
However, Chutuk is not entitled to recover all her fees and expenses, but only those incurred
after she was authorized by the court to pursue the fraudulent conveyance actions. This
occurred on December 16, 1993. It appears from her application that Chutuk's counsel spent
approximately 60 hours after authorization on the matter, for fees of $6,600.00. She also
incurred $1,785.13 in costs during this period. Accordingly, the court will award Chutuk an
administrative priority claim in the amount of $8,385.13.
Pursuant to FRBP 9021, a separate order will be entered.
Dated: August 30, 1994 _______________________