IN THE DISTRICT COURT OF THE VIRGIN ISLANDS
BANKRUPTCY DIVISION
DIVISION OF ST. THOMAS AND ST. JOHN
In re: ) Involuntary Chapter 7
)
Elizabeth Service, ) Case No. 3:20-bk-30003 (MFW)
)
Putative Debtor. ) Rel. Docs. 18, 20, 24, 25 & 26
MEMORANDUM OPINION1
Before the Court is the Motion for Attorneys’ Fees and Costs
Pursuant to 11 U.S.C. §303(i)(1) filed by Elizabeth Service (the
“Movant”) and the Opposition thereto filed by Ackley Caribbean
Enterprises, Inc. (“ACE”) and FTM, LLC (the “Petitioning
Creditors”). For the reasons stated below, the Court finds that
the Movant is entitled pursuant to
11 U.S.C. § 303(i)(1) to a
partial award of attorneys’ fees and costs incurred in
prosecuting her motion to dismiss the involuntary petition.
I. BACKGROUND
In October 2016, the Movant entered into an Asset Purchase
Agreement (the “APA”) with ACE to purchase two restaurants in St.
Thomas, U.S.V.I. The Movant paid $10,000.00 as a non-refundable
deposit and financed the balance, $290,000.00 (“Loan”), through
financing from ACE. The obligation was secured by the
restaurants’ assets and by real estate owned by the Movant in
1 This Memorandum Opinion constitutes the findings of
fact and conclusions of law of the Court pursuant to Rule 7052 of
the Federal Rules of Bankruptcy Procedure, which is made
applicable to contested matters by Rule 9014.
Georgia. The Movant also agreed to pay the monthly rent on the
premises owed by ACE to FTM, which she paid directly to FTM.
With the onset of the pandemic in spring of 2020, the Movant
was unable to make the payments due on the rent or the APA. She
spoke with FTM who agreed to accept half the rent due, deferring
the rest. The Movant tried to negotiate an accommodation from
ACE but they could not agree on terms.
On September 21, 2020, the Petitioning Creditors filed an
involuntary petition against the Movant. The Movant filed a
motion to dismiss the involuntary petition asserting that (1)
only two creditors signed the involuntary petition while she has
more than 12 creditors, (2) there is a bona fide dispute about
those two creditors’ claims, and (3) the petition was filed in
bad faith. The Petitioning Creditors filed a response and a
hearing was held on November 10, 2020. At the conclusion of the
hearing, the Court granted the motion to dismiss, finding that
FTM was not a creditor (having no contract with the Movant) and
that ACE was not an eligible creditor because its claim was
disputed (in amount and status as unsecured). The Court made no
ruling on the bad faith allegation and its order was without
prejudice to a refiling or to a motion for attorneys’ fees under
section 303(i)(1).
On March 3, 2021, the Movant filed a motion seeking almost
$40,000 in fees and expenses. The Petitioning Creditors filed a
2
response and a hearing was held on the Motion on March 18, 2021,
after which the Court held the matter under advisement.
II. JURISDICTION
At the hearing, the Petitioning Creditors argued initially
that the Court does not have jurisdiction to hear the motion
because the case is closed and no motion was filed seeking leave
to reopen the case. See, e.g., In re Cap. Fin., Inc., No. RS
02–19544–MG, 2007 WL 7535047, at *2 (B.A.P. 9th Cir. Nov. 14,
2017).
The Court finds that the Capital Finance case unpersuasive
because the court merely noted that the bankruptcy court had
required that the case be reopened without deciding whether it
was necessary.
Id. The Court concludes, instead, that it has
jurisdiction because the issue of attorneys’ fees under section
303(i)(1) does not even arise until the case is dismissed. See,
e.g., In re Cooper School of Art, Inc.,
709 F.2d 1104, 1106 (6th
Cir. 1983) (holding that “[w]hen a bankruptcy court dismisses a
petition for involuntary proceedings . . . it does not lose
jurisdiction for the purpose of awarding costs and attorney
fees”); In re Ross,
135 B.R. 230, 234 (Bankr. E.D. Pa. 1991)
(“Given the language of the statute, a bankruptcy court must
first order the dismissal of an involuntary petition prior to
reaching any issues under section 303(i). . . . [and therefore] I
3
have the jurisdiction to consider an award under section 303(i)
after dismissal.”).
Further, at the hearing on the motion to dismiss, the Court
held that its ruling was without prejudice to the Movant’s right
to request fees. Therefore, the Court concludes that it has
jurisdiction to consider the Motion for Attorneys’ Fees.
III. DISCUSSION
The Petitioning Creditors raise several other reasons why
the Motion should be denied.
A. Timeliness of Motion
The Petitioning Creditors initially argue that the motion is
untimely because it was filed more than 3 months after dismissal
of the involuntary case. They contend that any such motion must
be filed within 14 days pursuant to Rule 54(d)(2)(B). See Fed.
R. Bankr. P. 9014(c) (incorporating Rule 7054 which includes Rule
54(d)(2)(B)).
The Court rejects this argument. Rule 54 is not applicable
to the award of attorneys’ fees and costs under section
303(i)(1). See, e.g., Cap. Fin.,, 2007 WL 7535047, at *5-6
(concluding that “Fed. R. Civ. P. 54(d) . . . do[es] not apply. .
. . [because] § 303(i) is substantive law providing an
independent claim to an alleged debtor whenever an involuntary
petition is dismissed without the alleged debtor having waived
4
that claim” rather than a general claim as a prevailing party
under Rule 54); Nat’l Med. Imaging, LLC v. U.S. Bank (In re Nat’l
Med. Imaging, LLC), 570 B.R. 147, 157 (Bankr. E.D. Pa. 2017)
(holding that “section 303(i) claims are not subject to a statute
of limitations (whether contained in the Bankruptcy Code or
borrowed from state law), but must [only] be brought within a
reasonable amount of time that does not prejudice Defendants”).
The Court concludes that the Petitioning Creditors did not
contend, or prove, that they were prejudiced by any delay in the
filing of the Motion.
B. Standard of Review
Section 303(i)(1) provides:
(i) If the court dismisses a petition under this
section other than on consent of all petitioners and
the debtor, and if the debtor does not waive the right
to judgment under this subsection, the court may grant
judgment—
(1) against the petitioners and in favor of
the debtor for -
(A) costs; or
(B) a reasonable attorney’s fee.
11 U.S.C. § 303(i)(1). Thus, to award fees under that section
requires three elements: (1) the court dismissed the involuntary
petition, (2) the dismissal was not on consent of the petitioning
creditors, and (3) the putative debtor did not waive its right to
attorneys’ fees and costs. See, e.g., In re Lee,
252 B.R. 565,
565 (Bankr. M.D. Fla. 2000). There is no dispute that these
three elements have been met in this case.
5
That does not mean, however, that fees must be awarded. The
Petitioning Creditors appropriately note that it is within the
Court’s discretion whether to award fees or not, and if so, in
what amount. See, e.g., Higgins v. Vortex Fishing Sys., Inc.,
379 F.3d 701, 706 (9th Cir. 2004); Nat’l Med. Imaging,
570 B.R.
at 161; In re Express Car & Truck Rental, Inc.,
440 B.R. 422, 431
(Bankr. E.D. Pa. 2010). The Movant agrees that the award of fees
is subject to the Court’s discretion.
Courts apply a totality of the circumstances test in
determining whether to award attorneys’ fees and costs under
section 303(i)(1). That test requires that courts consider,
inter alia, (1) the merits of the involuntary petition, (2) any
improper conduct on the part of the alleged debtor, (3) the
reasonableness of the actions of the petitioning creditors, and
(4) the motivation and objectives behind filing of the
involuntary petition. See, e.g., In re Taub,
438 B.R. 761, 775
(Bankr. E.D.N.Y. 2010) (citing 2 Collier on Bankruptcy ¶ 303.11
(Alan N. Resnick & Henry J. Sommer eds. 16th ed.)).
The Movant argues, however, that there is a presumption that
fees and costs should be awarded. See, e.g., In re Mountain
Dairies,
372 B.R. 623, 637 (Bankr. S.D.N.Y. 2007).
The Court agrees that it has discretion to award fees under
the totality of the circumstances test and that there is a
presumption that some award of fees is appropriate. See, e.g.,
6
Higgins, 379 F.3d at 707; Express Car, 440 B.R. at 431 (noting
that a majority of courts have held that there is a presumption
in favor of awarding fees on dismissal of an involuntary
petition). As the Ninth Circuit noted in Higgins:
Although we adopt the totality of the circumstances
test as the appropriate standard under § 303(i)(1), we
do not abandon the premise that any petitioning
creditor in an involuntary case . . . should expect to
pay the debtor’s attorney’s fees and costs if the
petition is dismissed. Thus, when an involuntary
petition is dismissed on some ground other than consent
of the parties and the debtor has not waived the right
to recovery, an involuntary debtor’s motion for
attorney’s fees and costs under § 303(i)(1) raises a
rebuttable presumption that reasonable fees and costs
are authorized. . . . . This presumption helps
reinforce the idea that the filing of an involuntary
petition should not be lightly undertaken, and will
serve to discourage inappropriate and frivolous
filings. Filing an involuntary petition should be a
measure of last resort because even if the petition is
filed in good-faith, it can chill the alleged debtor’s
credit and sources of supply, and scare away his
customers.
Higgins, 379 F.3d at 707 (quotations and citations omitted).
It is important to note, however, that any reduction of fees
and costs under this standard is not a determination of whether
those fees and costs are due to counsel from their client, the
Movant, but only whether it is reasonable to enter an award
against the Petitioning Creditors for them.
C. Totality of the Circumstances
1. Merits of the involuntary petition
The involuntary petition was filed by only two purported
creditors, ACE and FTM. The Petitioning Creditors argue that FTM
7
was a creditor because the Movant had made a deal with FTM to pay
it only half of the rent owed by ACE. She then used that as an
argument that she did not have to pay ACE the full rent.
However, at the dismissal hearing, the Court concluded that
FTM was not a creditor of the Movant at all, notwithstanding its
agreement to accept partial payment from the Movant in
satisfaction of ACE’s rental obligation. Further, the Court
found that there was a dispute as to whether ACE was an unsecured
creditor or whether it was secured by property the Movant owned
in Georgia. It was on the basis of those findings that the Court
dismissed the involuntary petition.2 As a result, the Court
cannot conclude that the involuntary petition was meritorious.
2. Improper conduct of putative debtor
The Petitioning Creditors argue that the actions of the
Movant justify denial of any attorneys’ fees. First, the
Petitioning Creditors contend that at the dismissal hearing the
Movant asserted that she had given funds to her counsel to cover
the amounts due to ACE, but that those funds were never deposited
by counsel but were returned to the Movant instead. This, they
assert was a fraud on the Court. In addition, the Petitioning
2 The Movant also presented evidence that she had more
than twelve creditors, which the Petitioning Creditors disputed
arguing it was not clear if they were her creditors or her
company’s creditors. The Court found it unnecessary to decide
that issue, however, because of its ruling that neither of the
Petitioning Creditors was eligible to file the involuntary
petition.
8
Creditors assert that the Movant had a history of not paying her
debts, including IRS trust fund taxes.
The Court disagrees with these. In granting the Motion to
Dismiss, the Court did not make any findings or rely in any way
on the representation of the Movant that she had deposited funds
with her counsel to pay ACE. Nor did the Court conclude that the
Movant was current on her obligations to creditors. Rather, as
noted above, the Court dismissed the case simply because it found
that the Petitioning Creditors were not eligible to file the
involuntary petition. Therefore, the Court is not persuaded that
these failures of the Movant, even if proven, warrant denial of
attorneys’ fees and costs under section 303(i)(1).
3. Reasonableness of actions of petitioning creditors
and objectives of filing of involuntary petition
The Petitioning Creditors argue that the Court should deny
the request for an award of attorneys’ fees and costs because the
Court did not find that the involuntary petition was filed in bad
faith when it granted the motion to dismiss the case.
The Court agrees that it did not find that the involuntary
petition was filed in good faith. That fact alone, however, is
not dispositive in considering an award of fees and costs under
section 303(i)(1). Instead, bad faith is required only for an
award of compensatory or punitive damages under section
303(i)(2). See, e.g., In re Bayshore Wire Prods. Corp., 209 F.3d
100, 105 (2d Cir. 2000) (holding that bad faith of the
9
petitioning creditors “is not a prerequisite to an award of costs
and attorney’s fees under § 303(i)(1).”). However, bad faith is
relevant to a consideration of the motives of the Petitioning
Creditors in filing the involuntary petition and the actions they
took in connection therewith.
The Petitioning Creditors assert that their actions in
filing the involuntary petition were taken in the utmost good
faith in an effort to collect legitimate debts owed to them by
the Movant. The Movant argues, however, that the Petitioning
Creditors’ actions were improper. At the Dismissal hearing, the
Movant testified that prior to filing the involuntary petition,
she had tried to pay ACE the amounts she owed, but it refused to
accept payment. She then tried to negotiate for a reduction in
rent which was agreed to by FTM, ACE’s landlord. She further
testified that she tried to negotiate with Ackley for payment
terms but he insisted on her agreeing to return one of the
restaurants while still being liable to repay more than ACE was
owed for both. When she refused, she said he physically
threatened her. She said that she was trying to refinance the
obligation with a third party when the Petitioning Creditors
filed the involuntary petition. She argues their motive was to
force her to agree to the unfair deal she had already rejected.
The Petitioning Creditors presented evidence refuting the
Movant’s testimony that ACE had refused to accept payments,
10
offering the affidavit of its bookkeeper who stated that the
Movant stopped making payments on the loan in March and paid only
half of the rent due. The bookkeeper stated that she never
refused any payments from the Movant.
Because the Court found that the Petitioning Creditors were
ineligible to file the involuntary petition, it did not need to
rule on this conflicting testimony. However, even if the
Petitioning Creditors did file the involuntary petition in an
effort to collect the obligations owed them, the Court finds that
the filing was not appropriate. They had no legal basis to file
it, and it caused real harm to the Movant (requiring that she pay
an attorney to have it dismissed and perhaps adversely affecting
her pending efforts to refinance her obligations). Therefore,
the Court concludes that the Petitioning Creditors’ actions in
filing the involuntary petition, when they were not eligible to
do so, should result in an award of some attorneys’ fees to the
Movant.
D. Reasonableness of fees
Fees requested by the Movant include fees and expenses of
(i) local counsel, Douglas B. Chanco, totaling $2,812.50,3 (ii)
3 Originally, Chanco requested $2,100 for services
detailed in the request, plus estimated fees of $550. (D.I. 18-
5.) A supplemental declaration provided detail for $712.50 in
lieu of the estimated time. (D.I. 25.)
11
transactional counsel, Leigh Goldman, totaling $1,230,4 and (iii)
pro hac vice counsel, Small Herrin, LLP, totaling $35,144.385 for
a total of $39,186.88.
The Movant bears the burden of establishing that the fees
requested under section 303(i)(1) are reasonable. See, e.g., In
re Scrap Metal Buyers of Tampa, Inc., 233 B.R. 162, 166 (Bankr.
M.D. Fla. 1999), aff’d
253 B.R. 103 (M.D. Fla. 2000). The
Petitioning Creditors raise several specific objections to the
fees.
1. Work performed before admission
The Petitioning Creditors contend that any work done before
counsel was admitted to practice in the Virgin Islands must be
disallowed. The Court agrees that this time should not be
included in any award of fees against the Petitioning Creditors.
See, e.g., Matter of Jindal for Pro Hac Vice Admission to Virgin
Islands Bar, 69 V.I. 942, 948-49 (V.I. 2018) (holding that an
attorney engages in the unauthorized practice of law when he/she
commences work on a case before being admitted pro hac vice);
4 Goldman provided detail for only $630 of those fees and
expenses. (D.I. 18-6.) No supplemental declaration providing
detail for the estimated fees of $600 was filed.
5 Originally, Small Herrin requested $20,729.38 plus
estimated fees of $6,345. (D.I. 18-4.) A supplemental
declaration provided detail for $14,415 instead of the estimate.
(D.I. 24.) She asserts that the actual services performed
exceeded the estimate because she had not anticipated the
extensive response filed by the Petitioning Creditors. (D.I.
24.)
12
Matter of Est. of Benjamin, No. ST-95-PB-53, 2019 WL 11788004, at
*5 (V.I. Super. Ct. Feb. 8, 2019) (holding that a pro hac vice
attorney cannot be compensated for legal services performed prior
to being admitted).
In this case, attorney Small of Small Herrin was never
admitted to practice in the Virgin Islands and did not seek
admission pro hac vice. (D.I. 18-4 & 24 at ¶ 10.) Therefore,
the fees for his services ($150) will not be included in any
award against the Petitioning Creditors.
Id.
Attorney Humnicky of Small Herrin was admitted to practice
pro hac vice on October 28, 2021. In her Supplemental
Declaration, Attorney Humnicky asserts that the filing of her
application and documentation needed from the state courts was
delayed by the pandemic. However, until the retention
application was filed, she was not authorized to practice law in
the Virgin Islands and, therefore, the Court believes that fees
incurred prior to that time should not be assessed against the
Petitioning Creditors. Attorney Humnicky charged $7,590 for
services performed before filing her pro hac vice motion. (D.I.
18-4.) These fees may not be awarded against the Petitioning
Creditors.
The Petitioning Creditors also argue that fees and costs for
preparing the request for admission pro hac vice totaling
$1,211.38 must also be disallowed. The Court agrees. The fees
13
and costs incurred in seeking admission did not relate to the
defense of the involuntary petition. Rather, the choice of
counsel was Movant’s and thus, the efforts of Movant’s counsel to
be admitted pro hac vice benefitted her and her client but were
not caused by the Petitioning Creditors’ actions. See, e.g., In
re N.S. Garrott & Sons, 54 B.R. 221, 223 (Bankr. E.D. Ark. 1985)
(disallowing fees for preparing retention applications). Because
the fees incurred for those activities occurred before the pro
hac vice motion was filed, they have already been reduced. The
costs associated with that motion ($296.38) will also not be
included in any award against the Petitioning Creditors.
Thus, the Court will reduce the fee award against the
Petitioning Creditor by $8,036.38.
2. Local hourly rate
The Petitioning Creditors assert that the rates awarded to
Movant’s counsel should not exceed the hourly rates available in
the Virgin Islands. See, e.g., Lakeview Loan Serv., LLC v.
Martinez, No. CV 2016-0073, 2020 WL 4572340, at *6 (D.V.I. Aug.
7, 2020) (finding reasonable hourly rates for attorneys in the
Virgin Islands to be $125-300); McLaughlin v. Indep. Ins.
Advisors, Inc., No. ST-98-CV-338,
2012 WL 13220117, at *5 (V.I.
Super. Ct. Sept. 7, 2012) (allowing paralegal compensation at $80
per hour).
The Court rejects this argument. Under the Bankruptcy Code,
14
attorneys are not generally bound to accept local rates, but are
entitled to their standard non-bankruptcy rates. See, e.g.,
Zolfo, Cooper & Co. v. Oster-Sunbeam Co., Inc., 50 F.3d 253, 260
(3d Cir. 1995) (concluding that a bankruptcy firm should not be
restricted to the hourly rate typical in the locale of the case);
In re Robertson Cos.,
123 B.R. 616, 619 (Bankr. D.N.D. 1990)
(holding that a rule restricting bankruptcy attorney’s hourly
rate to that prevailing in the locale where the case is pending
“is unduly parochial particularly in this age of national and
regional law firms working on larger more complex bankruptcy
cases of more than local import.”). This is particularly true in
this instance because there are few bankruptcy practitioners in
the Virgin Islands and, therefore, conflicts of interest may
preclude a party from obtaining local counsel who are experienced
in bankruptcy matters.
3. Vagueness
The Petitioning Creditors also contend that the fees should
be reduced because many of the entries are vague, without
sufficient detail to show what work was done and why that work
was necessary. See, e.g., In re Mackie, 623 B.R. 285, 287
(Bankr. D.S.C. 2020); In re HL Builders, LLC, No. 19-32825,
2020
WL 6390103, at *7 (Bankr. S.D. Tex. Oct. 30, 2020).
In particular, the Petitioning Creditors object to the
estimate of $7,495 for services that have not yet been performed
15
or for which bills have not been submitted. Subsequent to the
hearing, Movant’s local and pro hac vice counsel submitted
detailed bills for the estimated services. (D.I. 24 & 25. See
also n. 3-5, supra.) The Court finds the supplemental detail
provided to be sufficient and, consequently, will not reduce the
fees requested as being vague. However, transactional counsel
did not provide any detail for the estimated fees requested of
$600, and, therefore, those fees must not be included in the
award.
The Petitioning Creditors also find objectionable the
request for fees where the entries have been redacted. The Court
agrees. Because the entries are redacted, the Court is unable to
ascertain whether the services rendered were necessary to defend
the involuntary petition. See, e.g., Glassman v. Heimbach,
Spitko & Heckman (In re Spitko), Adv. No. 05-0258, 2007 WL
1720242, at *18 (Bankr. E.D. Pa. June 11, 2007). Therefore, the
Court will reduce the award of fees against the Petitioning
Creditors by the $2,2056 requested for those services. (D.I.
24.)
With respect to the other entries, however, the Court will
not make any reduction due to vagueness, because it finds that
the entries are sufficiently detailed to allow an analysis of
6 An additional $1,925 in fees for redacted entries is
already included in the reduction for services rendered before
the pro hac vice motion was filed. (D.I. 24.)
16
what the services were and whether they were reasonable.
Therefore, the Court will reduce the total award by $2,805
because of vagueness.
4. Excessive amounts charged
The Petitioning Creditors object to $3,920 in fees that they
contend are excessive. Principally, they object to the time
spent by Attorney Humnicky (11.2 hours) in preparing for the
hearing on the motion to dismiss that lasted less than an hour.
The Court disagrees with this assertion. The issues
relevant to the Motion to Dismiss were many and, although the
Court rendered a ruling on the narrow issue of whether the
Petitioning Creditors were eligible to file the petition, if the
Movant had not been successful on that issue, she would have had
to pursue her other arguments. Therefore, preparation for that
contingency was appropriate and necessitated by the Petitioning
Creditors’ actions. Those fees will be included in the award
against them. The Petitioning Creditors also contend that
Attorney Humnicky spent an excessive amount of time spent seeking
consensus on a proposed order dismissing the case after they had
suggested that each side submit their own version, which is what
ultimately happened. The Court disagrees. It is always
preferable to the Court that counsel confer and submit an agreed
order rather than submitting their own versions. Therefore, the
Court will award fees to the Movant’s counsel for trying to get
17
agreement on the order submitted.7
The Petitioning Creditors also object to $880 in fees
charged for emails and calls between local counsel and pro hac
vice counsel. See, e.g., Tyler v. Am. Airlines, Inc., No. CV 76-
369, 1979 WL 498670, at *1 (D.V.I. June 21, 1979). The Court
disagrees; intra-attorney calls and emails are compensable so
long as they adequately describe the tasks performed, which the
Court finds they do here. See, e.g., In re Prime Foods of St.
Croix, Inc.,
80 B.R. 758, 763 (D.V.I. 1987) (allowing
compensation for intra-office conferences). Therefore, the
Court will not reduce the fees requested for communications
between counsel.
Finally, the Petitioning Creditors seek disallowance of fees
for the time spent by Attorney Humnicky in preparing a motion for
leave to file a reply to their response to the Motion, which was
denied. See, e.g., In re Forever Green Athletic Fields, Inc.,
Bankr. No. 12-13888-MDC,
2017 WL 1753104, at * 12 (Bankr. E.D.
Pa. May 3, 2017) (disallowing fees under section 303(i) for
advancement of unsuccessful arguments). The Court agrees that
the time spent should not be included in the award. Attorney
Humnicky sought permission to file the Reply by midnight of the
day before the hearing to consider the Motion. That was clearly
7 The Court also notes that it accepted the form of order
submitted by the Movants’ counsel, rather than the one preferred
by the Petitioning Creditors. (D.I. 16 & 17.)
18
too late and the Court denied the request. Thus, the Court will
disallow $875 for the 2.5 hours spent drafting the motion to file
a reply.
5. Administrative Tasks
The Petitioning Creditors also object to fees of $700
charged by Attorney Humnicky for tasks they contend are purely
ministerial tasks (scheduling calls and meetings, drafting
exhibit cover pages, updating her calendar, coordinating staff,
dealing with a power outage and filing pleadings). See, e.g., In
re Pierce, 165 B.R. 252, 256 (Bankr. N.D. Ind. 1994). Attorney
Humnicky responds that it was quicker and easier for her to
perform those tasks than to take the time to instruct a paralegal
on what to do. The Court disagrees. That amount will not be
included in the fee award against the Petitioning Creditors.
6. Non-bankruptcy case Related Tasks
The Petitioning Creditors finally argue that fees totaling
$805 for the work done by Attorney Humnicky in helping the Movant
deal with her efforts to obtain a loan or deal with credit
reporting agencies should not be allowed.
The Court agrees with the Petitioning Creditors that fees
for work unrelated to the involuntary petition should not be
allowed in any award against them. While those services may have
benefitted the Movant (and therefore are due by her), they were
not caused by the actions of the Petitioning Creditors and
19
therefore should not be charged as costs against them under
section 303(1i) (1). Accordingly, the Court will disallow those
fees.
IV. CONCLUSION
For the foregoing reasons, after the above reductions of
$13,221.38, the Court will award fees against the Petitioning
Creditors in the amount of $25,965.50.
An appropriate Order is attached.
Dated: April 7, 2021 BY THE COURT:
Mary F. Walrath
United States Bankruptcy Judge
20