Académique Documents
Professionnel Documents
Culture Documents
_________________________
No. 94-2215
IN RE:
_________________________________
Robert D. Wieck, Special Counsel for the Estate, with whom
_______________
MacAdams & Wieck, Inc. was on brief, for appellees.
______________________
__________________________
April 28, 1995
__________________________
SELYA,
SELYA,
Fed.
R. Bankr.
Circuit Judge.
Circuit Judge.
_____________
P.
2014(a), a
fulfilling his
professional.
novel
Chapter
duties.1
In the
In
U.S.C.
11 trustee
bankruptcy court's
Under 11
327(a) and
may
employ
approval, to
assist
this appeal,
we uphold
process, we
address two
questions of
Second,
if
belated
applications
are
cognizable
at
all,
what
legal
hold, in
circuits, that a
application,
general
concordance with
bankruptcy court
but only
if it
can be
several
other
a post
____
facto
_____
demonstrated (1)
that the
11 U.S.C.
327(a) (1988).
Bankruptcy Rule 2014(a) implements
the statute.
It provides in pertinent part that a trustee's
application for the employment of a professional person pursuant
to section 327(a) shall state, inter alia, "the specific facts
_____ ____
showing the necessity for the employment, the name of the person
to be employed, the reasons for the selection, the professional
services to be rendered, [and] any proposed arrangement for
compensation . . . ."
Although the statute and the rule operate
in tandem, we shall for simplicity's sake refer mainly to the
former.
2
delay
in
seeking
circumstances.
merely
by
court approval
Relatedly,
oversight
we
resulted
hold
cannot
from
extraordinary
that tardiness
qualify
as
an
occasioned
extraordinary
debtors, Donald
not in dispute.
On
August 27,
filed a
voluntary
On February 17,
S.
prominent Rhode
Richardson
and
Island appraiser
Scotti were
and broker.
familiar
with the
from the
the debtors
bankruptcy
Although both
need
for prior
court before
or during
the
yeoman work
he arranged a sale
Island,
Richardson's
approved
for
the sales
of a two-acre
$275,000.
petition
for
for the
The
permission
agreement
estate.
parcel in Portsmouth,
bankruptcy
to
(which made
Among other
sell
court
the
provision
granted
land
and
for a
5%
brokerage
commission).
When
the time
came
to pay
the
fee,
employment.
Employ
He then assembled
Broker" and
a "Nunc Pro
submitted it
to the
Tunc Application to
bankruptcy court
in a
B.R.
trustee appealed to
that court, ruling
court's order.
276, 277-79
the district
(Bankr.
court.
On
D.R.I. 1994).
The
October 26,
1994,
See In
___ __
the bankruptcy
the terrain
question is whether
authorization of
occupied by section
the statute permits
professional services
at all.
327(a),
the post
____
Because
power of
interpretive scrutiny
States v. Holmquist, 36
______
_________
is plenary.
See,
___
e.g., United
____ ______
1994), petition
________
for cert. filed (U.S. Dec. 27, 1994) (No. 94-7485); United States
___ _____ _____
_____________
v. Gifford, 17 F.3d 462, 472
_______
Co. v.Commercial Union Ins. Co.,978 F.2d 750, 757(1st Cir. 1992).
___
_________________________
____________________
If
possible, a
that conforms
to the
statute should be
plain meaning
of its
construed in
a way
text.3
e.g.,
____
See,
___
Pritzker v.
________
Yari, 42
____
94-1517);
F.3d 53,
Holmquist, 36
_________
construction.
CIA, 992
___
territory
F.3d at
in
159.
When
order
to
a statute's
venture into
appropriate
Sullivan v.
________
distill
13, 1995)
an
F.2d 1249,
courts to
Cir. 1994),
67-68 (1st
2594
power of
instance,
the
statutory
purposes, is indeterminate.
sanctions
authorization
nor
of outside
expressly
for
all
forbids
professional
language,
the
services.
post
____
facto
_____
Courts
have
not fill
language
both
authorization,
see
___
statute
and
Triangle Chems.,
_______________
rule
697
at 1284,
prior
1289;
____________________
Stephen R.
62 Am.
prohibiting
discerned ambiguity in
appears
to
be
no explicatory
legislative
text.
Since
history,
we
Assocs. Ltd.
Partnership,
___________________________
113
S.
Ct.
1489,
1495
(1993).
by equitable principles.
light
of the
purposefully
nonmechanical nature
think
it
appropriate
that
is
permitted to entertain
services
under section
several of our
F.2d
bankruptcy
of equity,
courts
We
sister circuits.
so
should
we
be
professional
hold, thereby
In
joining
41 F.3d at
F.2d 99,
105
(3d Cir.),
cert.
_____
B.
B.
_
Nature of the Power; Standard of Review
Nature of the Power; Standard of Review
_______________________________________
Because
belated
applications
equitable
decision
the
in
for
nature,
to
grant
discretionary.
bankruptcy
the
we
or
employment
believe
deny such
The cases
court's
that
power
of
the
to
entertain
professionals is
court's
applications
is
ultimate
necessarily
are in
accord.
See Arkansas, 798 F.2d at 650; Triangle Chems., 697 F.2d at 1289;
___ ________
_______________
see also 2 Lawrence P. King,
___ ____
327-20
(15th
("Generally
ed.
1995)
it has
been
Collier on Bankruptcy
_____________________
[hereinafter
concluded that
327.02,
at
Collier on Bankruptcy]
_______________________
bankruptcy courts
are
like token,
the
bankruptcy court's
ruling on
an
for the
____
_____
employment of a
abuse-of-discretion rubric.
at 1266.
See
___
the district
discretion,
ceding
no
special deference
See Grella
___ ______
to
the
district
By
bankruptcy
recognizing
courts
to
the
discretionary
consider post
____
facto
_____
authority
applications
of
under
beginning rather
than the
legal
We
yardstick by which
conclude
that
professional
the
person's
We must yet
to be measured.
applicant
must
demonstrate
both
the
suitability
for
appointment
and
the
bankruptcy
court
confronted
suitability; the
by
post
____
facto
_____
application does
bankruptcy
application been
court
must
satisfy
itself
In other words,
that,
had
the
its informed
application
after-the-fact
In
are sufficiently
extraordinary
to
warrant
F.2d at 105.
Third Circuit
Although
we
appellate
cases
have
circumstances," or
determined
that
"extraordinary
See,
___
e.g., Land,
____ ____
105; Triangle
________
57 B.R. 821, 822-23 (Bankr. 9th Cir. 1986); see also 2 Collier on
___ ____
__________
Bankruptcy, supra,
__________ _____
Seventh Circuit,
327.02,
at 327-20.
Indeed, apart
from the
"excusable neglect"
at 319-20, those
views.
We
can discern
no basis
for rejecting
this
policies underlying
favor adoption
of the
approval is to
be preferred
the
Chapter 11
process also
permits the
Prior
bankruptcy
and minimizes the chance that the court will be confronted with a
fait
____
accompli.
________
approval
requirement
standard,
such
purpose.
At
statute and
at
To achieve
319;
as
have
desirable ends,
teeth.
extraordinary
the prior
relatively
circumstances,
strict
serves
see
___
also
____
Kroeger Properties,
___________________
that
situations
involving
restricting
post
____
extraordinary
nonobservance
of
this
(suggesting
general
must
these
57
facto
_____
B.R.
See id.
___ ___
at
822-23
authorization
circumstances
section 327(a)'s
the
will
curb
requirements);
327.02, at
to
see
___
327-20.
inevitably help
We
find
to conserve overtaxed
that these
policy
judicial
considerations
point
grant
post
____
provided that
the
facto
_____
application for
applicant can
10
professional
demonstrate,
inter
_____
short shrift
of the merits
of this appeal.
We assume arguendo
________
was made.
seeking approval
reduces to
was due
Because
entirely to inadvertence,
extraordinary
the trustee's
circumstances
that
justify
to
Withal, no
tardiness
in
our inquiry
universe of
post
____
facto
_____
and
extraordinary
experience
dictate
circumstances
were
that
if
expanded
the
category
to
include
of
mere
oversight,
the
modifying
completely emptied
itself would
must
of its
be stripped
pause and
adjective
meaning.
"extraordinary"
Consequently,
of its efficacy.
inquire, like
Alice to
be
the standard
At some
Humpty
would
point, one
Dumpty, whether
____________________
means just
what
it
to mean
word . . .
neither more
nor
less.").
The weight
of authority pushes in
legitimate basis
for granting
post facto
____ _____
approval.
See,
___
e.g.,
____
justify
Land, 943
____
F.2d at
1268
("Simple neglect
will not
employment
of
professional.");
extraordinary circumstances);
n.4 (Bankr. 9th
Arkansas, 798
________
F.2d
at
651
940, 943
This tenet
115 B.R. 639, 649 (Bankr. D.S.D. 1990); In re Mason, 66 B.R. 297,
___________
449, 450
further justification
and we
noted that,
bankruptcy court
section
here, the
327(a) and
Fed.
R. Bankr.
12
P.
was
it
not only
2014(a), but
should be
applying
also
was
applying
its
own
local
rule.7
circumstance is three-fold.
of
the
The
significance
"extraordinary circumstances"
of
this
standard.
Second, once
Third, a special
traditional
oversight
rules. See,
___
220,
degree of deference
standards
of
224 (1st
above
decisionmaking
Cir.
and beyond
and
appellate
adherence
United States
______________
to
specific mandates
v. Diaz-Villafane,
______________
874
contained
F.2d 43,
[therein]");
46
(1st Cir.)
considerable latitude
in applying
local procedural
rules of its own making"), cert. denied, 493 U.S. 862 (1989).
_____ ______
III
III
___
Conclusion
Conclusion
__________
____________________
7The applicable local rule provides in full:
Absent extraordinary circumstances, nunc pro
tunc
Applications
for
appointment
of
professional persons pursuant to Sections 327
and
1103 of
the Bankruptcy
Code, and
Bankruptcy Rule 2014, will not be considered.
An Application is considered timely if it is
filed within thirty (30) days of the date of
the filing of the petition in bankruptcy or
the date the professional commences rendering
services, whichever occurs later.
D.R.I. Bankr. R. 25(A)(1).
13
Bankr. P.
2014(a), a bankruptcy
already
authorization
person
even
though the
been rendered.
only if
it
court may, in
can be
its
professional person's
But
327(a)
the
court should
shown
that the
services
grant the
professional
untimeliness
circumstances.
of
the
application
results
from
extraordinary
facto application.
_____
of the trustee's
fruits of his
transient
lure
of
ad
__
hoc
___
decisionmaking,
Affirmed.
Affirmed.
________
14
but
in
the