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Order awarding compensation for Chapter 7 Trustee after conversion to Chapter 13 (dkt. 69).
Chapter 7 Trustee filed an application for compensation, with the consent of the Debtors, seeking $1,400 for a mixture of trustee duties and attorney services performed by Chapter 7 Trustee before the Debtors converted the case to Chapter 13. In arriving at amount requested, Chapter 7 Trustee multiplied his total hours of work by his normal hourly billing rate for legal services. The Court held that 1) generally Sections 326(a), 328(b), and 330(a) provide for the bifurcation of the calculation and award of
compensation to a Chapter 7 trustee (as comission) and counsel for the Chapter 7 trustee (at an hourly rate), and 2) that the proper methodology in setting the Chapter 7 trustee's compensation in a converted case is to calculate the maximum commission that the Chapter 7 trustee could have earned for his pre-conversion efforts based on the sums to be distributed under the Chapter 13 plan, discounted by a reasonable amount as determined by the circumstances of the case and the actual services performed. When applying the discount rate and setting the ultimate compensation the trustee's hourly rate and number of hours of work are relevant factors. The Court found that the Chapter 7 Trustee had made such calculation and awarded compensation in the amount of $1,400.

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Robert A. Gordon