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6500 Cherrywood Ln - Greenbelt, MD 20770 - Main Tel: 301-344-8018 map
101 W Lombard St Room 8530 - Baltimore, MD 21201 - Main Tel: 410-962-2688

The petitioning creditors who obtained an Order for Relief in a case later converted to a case under Chapter 11 sought compensation from the estate under 11 U.S.C. § § 503(b)(3)(A) and 503(b)(3)(D). The application was opposed by an insider creditor who argued that the applicants were limited to compensation for the actual filing of the involuntary petition and for nothing more. HELD: the applicants were entitled to compensation for the three time segments involved; the filing of the involuntary petition, the time between the entry of the Order for Relief and the date of conversion of the case to a case under Chapter 11, and the time after conversion. The court found that the applicants rendered a substantial contribution to the case under Chapter 11 and that had they not acted as they did when they did, the case would have been stranded in legal limbo.

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Paul Mannes