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Unknown, 123 F.3d 861. Cases Citing This Book View Copy Cite
“the court must therefore set the compensation award either according to 328 or 330.”
93 citation events (67 in the last 25 years) across 24 distinct courts.
Strongest positive: Robert Betancourt (nmb, 2022-04-28)
Treatment trajectory · 1999 → 2026 · click a year to view as-of
1999 2012 2026
Top citers, strongest first. 35 distinct citers.
discussed Cited as authority (verbatim quote) Robert Betancourt
Bankr. D.N.M. · 2022 · quote attribution · 1 verbatim quote · confidence high
the court must therefore set the compensation award either according to 328 or 330.
discussed Cited as authority (rule) Feilitech US LLC
Bankr. N.D. Miss. · 2023 · confidence medium
In re Texas Sec., Inc., 218 F.3d at 445 -46 (citing In the Matter of National Gypsum Co. v. Donaldson Lufkin & Jenrette Securities Corp., 123 F.3d 861, 862-63 (5th Cir. 1997)); In re ASARCO, 702 F.3d at 257 (“[w]e have repeatedly interpreted § 328 as meaning precisely what it says [. . .] once those terms have been approved pursuant to § 328(a), the court may not stray from them at the end of the engagement unless developments subsequent to the original approval that were incapable of being anticipated render the terms improvident.”); In re Coho Energy, Inc., 395 F.3d 198 , 204 (5th Cir.…
discussed Cited as authority (rule) Feilitech US LLC
Bankr. N.D. Miss. · 2023 · confidence medium
In re Texas Sec., Inc., 218 F.3d at 445 -46 (citing In the Matter of National Gypsum Co. v. Donaldson Lufkin & Jenrette Securities Corp., 123 F.3d 861, 862-63 (5th Cir. 1997)); In re ASARCO, 702 F.3d at 257 (“[w]e have repeatedly interpreted § 328 as meaning precisely what it says [. . .] once those terms have been approved pursuant to § 328(a), the court may not stray from them at the end of the engagement unless developments subsequent to the original approval that were incapable of being anticipated render the terms improvident.”); In re Coho Energy, Inc., 395 F.3d 198 , 204 (5th Cir.…
cited Cited as authority (rule) Frontier Communications Corporation
Bankr. S.D.N.Y. · 2020 · confidence medium
Corp. v. Nat’l Gypsum Co. (In re Nat’l Gypsum Co.), 123 F.3d 861, 862-63 (5th Cir. 1997).
cited Cited as authority (rule) Rodney Wayne Etheridge and Sandra Lynn Etheridge
Bankr. M.D.N.C. · 2019 · confidence medium
M.D.N.C. 2011) (citing In re Nat’l Gypsum Co., 123 F.3d 861, 862 (5th Cir. 1997)).
cited Cited as authority (rule) David Alan Husted, Jr. and Sally Irene Husted
Bankr. E.D. Tex. · 2019 · confidence medium
In re Texas Sec., Inc., 218 F.3d 443, 445 (5th Cir. 2000) (citing Matter of National Gypsum Co. v. Donaldson Lufkin & Jenrette Securities Corp., 123 F.3d 861, 862 (5th Cir. 1997)).
discussed Cited as authority (rule) In re Boomerang Tube, Inc.
Bankr. D. Del. · 2016 · confidence medium
See, e.g., In re ASARCO, LLC, 702 F.3d 250, 268 (5th Cir.2012) (“In disputes governed by § 328(a), the contractual arrangement is supreme, and we shall enforce the contract as written.”) (emphasis added); In re Nat’l Gypsum Co., 123 F.3d 861, 863 (5th Cir.1997) (“Courts must protect [§ 328(a)] agreements and expectations, once found to be acceptable.”) (emphasis added); U.S. Trustee v. Newmark Retail Fin.
examined Cited as authority (rule) Asarco, L.L.C. v. Barclays Capital, Inc. (3×) also: Cited "see"
5th Cir. · 2012 · confidence medium
Coho Energy, 395 F.3d at 204 (“When [the bankruptcy courts’] fee discretion began to dissuade professionals from offering their services to debtors, Congress passed section 328(a) of the bankruptcy code, which allowed professionals to have greater certainty as to their eventual payment.”); see also Barron II, 325 F.3d at 695 (Jones, C.J., concurring) (referring to the attorney’s fee as a “sizeable windfall” but agreeing that the attorney was entitled to receive it under § 328(a)); Smart World, 552 F.3d at 232 (“Where the court pre-approves the terms and conditions of the retenti…
discussed Cited as authority (rule) CRG Partners Group, LLC v. Neary (In Re Pilgrim's Pride Corp.)
5th Cir. · 2012 · confidence medium
If prior approval is given to a certain compensation, § 328 controls and the court starts with that approved compensation, modifying it only for developments unforeseen when originally approved.’ ” (quoting In re Nat’l Gypsum Co., 123 F.3d 861, 862-63 (5th Cir.1997))).
cited Cited as authority (rule) ASARCO LLC v. Barclays Capital Inc. (In Re ASARCO LLC)
S.D. Tex. · 2011 · confidence medium
Corp. v. National Gypsum, Co. (In re National Gypsum Co.), 123 F.3d 861, 862 (5th Cir.1997).
cited Cited as authority (rule) In Re Age Refining, Inc.
Bankr. W.D. Tex. · 2011 · confidence medium
Corp. v. National Gypsum Co. (Matter of National Gypsum Co.), 123 F.3d 861, 862 (5th Cir.1997).
discussed Cited as authority (rule) In Re Energy Partners, Ltd. (2×)
Bankr. S.D. Tex. · 2009 · confidence medium
Prior to 1978, some professionals refused to work for bankruptcy estates because their compensation could potentially be changed by a bankruptcy judge after the professionals had completed the work. 11 Nat’l Gypsum Co., 123 F.3d 861, 862 (5th Cir.1997).
cited Cited as authority (rule) In Re Hale-Halsell Co.
Bankr. N.D. Okla · 2008 · confidence medium
In re Barron, 325 F.3d 690, 693 (5th Cir.2003) (citing In re Nat’l Gypsum Co., 123 F.3d 861, 862 (5th Cir.1997) and In re Tex. Sec., Inc., 218 F.3d 443, 445-46 (5th Cir.2000)). 27 .
cited Cited as authority (rule) Riker, Danzig, Scherer, Hyland & Perretti LLP v. Official Committee of Unsecured Creditors
S.D.N.Y. · 2008 · confidence medium
Corp. v. Nat’l Gypsum Co. (In re Nat’l Gypsum Co.), 123 F.3d 861, 862 (5th Cir.1997).
cited Cited as authority (rule) Mills v. Gurley (In Re Gurley)
Bankr. M.D. Fla. · 2007 · confidence medium
Donaldson Lufkin & Jenrette Securities Corp. v. National Gypsum Co., 123 F.3d 861, 862 (5th Cir.1997).
discussed Cited as authority (rule) In Re Chewning & Frey Security, Inc.
Bankr. N.D. Ga. · 2005 · confidence medium
Corp. v. Nat’l Gypsum Co. (In re Nat’l Gypsum Co.), 123 F.3d 861, 862 (5th Cir.1997) (holding that the professional had been employed pursuant to section 328 even though section 328 was not specified in the application to employ and the order stated that “the Court retains the right to consider and approve the reasonableness and amount of [professional’s] fees on both an interim and final basis.”).
discussed Cited as authority (rule) Smith v. Lounsbury (In Re Amberjack Interests, Inc.) (2×)
Bankr. S.D. Tex. · 2005 · confidence medium
In re National Gypsum Co., 123 F.3d 861, 862-63 (5th Cir.1997).
cited Cited as authority (rule) In Re Northwestern Corp.
Bankr. D. Del. · 2005 · confidence medium
Corp. v. National Gypsum Co. (In re National Gypsum Co.), 123 F.3d 861, 862-63 (5th Cir.1997)).
discussed Cited as authority (rule) Gibbs & Bruns LLP v. Coho Energy Inc. (2×)
5th Cir. · 2004 · confidence medium
In re Nat’l Gypsum Co., 123 F.3d 861, 862 (5th Cir.1997).
discussed Cited as authority (rule) ca5 2004 (2×)
5th Cir. · 2004 · confidence medium
In re Nat'l Gypsum Co., 123 F.3d 861, 862 (5th Cir.1997).
discussed Cited as authority (rule) In Re: Airspect Air, Inc.
6th Cir. · 2004 · confidence medium
In In re National Gypsum Co., 123 F.3d 861, 862 (5th Cir.1997), the bankruptcy court granted approval "upon the terms and conditions of that certain engagement letter dated April 16, 1991," but "retain[ed] the right to consider and approve the reasonableness and amount of [the professional's] fees on both an interim and final basis." The Fifth Circuit held that the bankruptcy court's reservation of the right to consider the "reasonableness" of the fees did not negate its "approval" of the fee arrangement under §328 but instead merely acknowledged the court's right to review any fee award for …
discussed Cited as authority (rule) Nischwitz v. Miskovic (In Re Airspect Air, Inc.)
6th Cir. · 2004 · confidence medium
In In re National Gypsum, Co., 123 F.3d 861, 862 (5th Cir.1997), the bankruptcy court granted approval “upon the terms and conditions of that certain engagement letter dated April 16, 1991,” but “retain[ed] the right to consider and approve the reasonableness and amount of [the professional’s] fees on both an interim and final basis.” The Fifth Circuit held that the bankruptcy court’s reservation of the right to consider the “reasonableness” of the fees did not negate its “approval” of the fee arrangement under § 328 but instead merely acknowledged the court’s right to r…
cited Cited as authority (rule) In Re High Voltage Engineering Corp.
Bankr. D. Mass. · 2004 · confidence medium
That uncertainty continues under the present § 330. ...” In re National Gypsum Co., 123 F.3d 861, 862 (5th Cir.1997).
discussed Cited as authority (rule) Advanced Microbial Solutions, L.L.C. v. O'Neal (In Re Advanced Microbial Solutions, L.L.C.) (2×) also: Cited "see"
E.D. Tex. · 2004 · confidence medium
Corp. v. Nat'l Gypsum Co. (In re National Gypsum Co.), 123 F.3d 861, 862 (5th Cir.1997).
cited Cited as authority (rule) ca3 2003
3rd Cir. · 2003 · confidence medium
Gypsum Co., 123 F.3d 861, 862 (5th Cir.1997) ("Under... § 328[a] professional may avoid ... uncertainty by obtaining court approval of compensation agreed to with [a committee]....
cited Cited as authority (rule) Federal Mogul-Global Inc. v. Official Committee of Unsecured Creditors
3rd Cir. · 2003 · confidence medium
Gypsum Co., 123 F.3d 861, 862 (5th Cir.1997) (“Under ... § 328[a] professional may avoid ... uncertainty by obtaining court approval of compensation agreed to with [a committee] ....
discussed Cited as authority (rule) F v. Steel & Wire Co. v. Houlihan Lokey Howard & Zukin Capital, L.P.
E.D. Wis. · 2003 · confidence medium
Int'l, Inc., 229 F.3d 824, 829 (9th Cir.2000) (stating that “a bankruptcy court may not conduct a[n] ... inquiry into the reasonableness of [a professional’s] fees and their benefit to the estate if the court already has approved the professional’s employment under 11 U.S.C. § 328”); In re Nat’l Gypsum Co., 123 F.3d 861, 862 (5th Cir.1997) (stating that [u]nder ... § 328[a] professional may avoid ... uncertainty by obtaining court approval of compensation agreed to with [a committee]....
discussed Cited as authority (rule) In the Matter Of: Rebecca Mitchell Barron, Debtor. Cynthia Daniels v. Rebecca Mitchell Barron John A. Barron Charles Easley (2×)
5th Cir. · 2003 · confidence medium
That uncertainty continues under the present § 330...." In re National Gypsum Co., 123 F.3d 861, 862 (5th Cir.1997).
cited Cited as authority (rule) Pongetti v. Barron
5th Cir. · 2003 · confidence medium
That uncertainty continues under the present § 330 . . . .” In re National Gypsum Co., 123 F.3d 861, 862 (5th Cir. 1997).
discussed Cited as authority (rule) Pongetti v. Barron
5th Cir. · 2000 · confidence medium
See 11 U.S.C. § 328 (a) (“The trustee ... may employ or authorize the employment of a professional person under section 327 or 1103 of this title ... on any reasonable terms and conditions of employment, including on a retainer, on an hourly basis, or on a contingent fee basis.”); In re National Gypsum Co., 123 F.3d 861, 862 (5th Cir.1997) (“Under present § 328 the professional may avoid ... uncertainty by obtaining court approval of compensation agreed to with the trustee (or debtor or committee).”).
examined Cited as authority (rule) Peele v. Cunningham (In Re Texas Securities, Inc.) (5×) also: Cited "see"
5th Cir. · 2000 · confidence medium
If prior approval is given to a certain compensation, § 328 controls and the court starts with that approved compensation, modifying it only for developments unforeseen when originally approved.” In the Matter of National Gypsum Co. v. Donaldson Lufkin & Jenrette Securities Corp., 123 F.3d 861, 862-63 (5th Cir.1997); see also United States v. Ruff, 99 F.3d 1559, 1567 (11th Cir.1996)(holding that commission of business broker was fixed under § 328 where agreement was approved by court and underlying service had been completed).
discussed Cited "see" In Re First Street Mart, Inc.
Bankr. M.D.N.C. · 2011 · signal: see · confidence high
See In re Nat’l Gypsum Co., 123 F.3d 861, 862 (5th Cir.1997) (discussing the dichotomy between compensation under Section 328 and Section 330 and holding: “If prior approval is given to a certain compensation, § 328 controls and the court starts with that approved compensation, modifying it only for developments unforeseen when originally approved.”).
discussed Cited "see" In Re Nucentrix Broadband Networks, Inc. (2×)
Bankr. N.D. Tex. · 2004 · signal: see · confidence high
See, In re Nat’l Gypsum Co. 123 F.3d 861, 862-63 (5th Cir.1997).
examined Cited "see" In Re El Paso Refinery, L.P. (6×)
Bankr. W.D. Tex. · 2000 · signal: see · confidence high
See id. at 862 .
discussed Cited "see, e.g." In re Hungry Horse, LLC
Bankr. D.N.M. · 2017 · signal: see, e.g. · confidence low
See, e.g., Donaldson Lufkin & Jenrette Securities Corp. v. Nat’l Gypsum Co. (In re Nat’l Gypsum Co.), 123 F.3d 861 (5th Cir. 1997): The court must therefore set the compensation award either according to § 328 or § 330.
123 F.3d 861
REAVLEY, Circuit Judge:

Donaldson Lufkin and Jenrette Securities Corp. (DLJ), retained by National Gypsum Company in its Chapter 11 bankruptcy reorganization, appeals the district court’s affir-mance of the bankruptcy court’s fee order reducing the final DLJ fee from $2,400,000 to $2,000,000. Because we read the bankruptcy court’s initial order to approve an agreed fee for DLJ, the court was required to follow § 328 instead of § 330 of the Bankruptcy Code. (11 U.S.C.) The fee order is reversed.

Background

National Gypsum Company as the debtor-in-possession recorded its agreement with DLJ for professional services in a detailed letter dated April 16,1991. The agreed compensation to DLJ was to be $125,000 per month. Application was made to the bankruptcy court for approval of this retention agreement, and the court’s order of June 20, 1991 granted that approval “upon the terms and conditions of that certain engagement letter dated April 16, 1991.” The order ended with these words: “The Court retains the right to consider and approve the reasonableness and amount of DLJ’s fees on both an interim and final basis.”

Three subsequent orders were entered by the bankruptcy court during the 23 months of the Chapter 11 reorganization, all approving extension of the retention agreement under the terms and conditions set forth in the original order of June 20, 1991. In three applications for interim payments by DLJ, it set forth the full $125,000 per month obligation. When the final application was made on June 7, 1993, DLJ claimed, by virtue of the agreed monthly fee, $2,825,000 beyond the amount of the previous interim payments. National Gypsum Company raised objections to that amount, and all parties then agreed to a balance owing DLJ of $2,400,000. However, after a hearing, the bankruptcy court reduced the amount allowed to $2,000,000 as its judgment of reasonable compensation in the light of hourly compensation that had been allowed in similar bankruptcy cases in the same district. The district court affirmed the bankruptcy court’s order on the ground that the latter did not abuse its discretion in analyzing the reasonableness of the fees under § 330. The district court ruled that § 328 was inapplicable because the order of the bankruptcy court was conditioned upon final approval by that court of the reasonableness of the compensation.

Discussion

Prior to 1978 the most able professionals were often unwilling to work for bankruptcy estates where their compensation would be subject to the uncertainties of what a judge thought the work was worth after it had been done. [1] That uncertainty continues under the present § 330 of the Bankruptcy Code, which provides that the court award to professional consultants “reasonable compensation” based on relevant factors of time and comparable costs, etc. Under present § 328 the professional may avoid that uncertainty by obtaining court approval of compensation agreed to with the trustee (or debtor or committee). Thereafter, that approved compensation may be changed only for the following reason: “Notwithstanding such terms and conditions, the court may allow compensation different from the compensation provided under such terms and conditions after the conclusion of such employment, if such terms and conditions prove to have been improvident in light of developments not capable of being anticipated at the time of the fixing of such terms and conditions.”

The court must therefore set the compensation award either according to § 328 or § 330. If prior approval is given to a certain compensation, § 328 controls and the court starts with that approved compensation, modifying it only for developments unforeseen when originally approved. If the[*863] most competent professionals are to be available for complicated capital restructuring and the development of successful corporate reorganization, they must know what they will receive for them expertise and commitment. Courts must protect those agreements and expectations, once found to be acceptable.

Decision

In June of 1991 the bankruptcy court could have refused to approve the compensation to which National Gypsum Company and DLJ had agreed. The court could have approved the retention of DLJ and, if DLJ would accede, left the award of compensation to be set by the court according to § 330. The court did not do this. It expressly approved the terms of the agreement. The reasonableness of those terms, in the event of anticipated circumstances and performance, was decided. [2] By retaining “the right to consider and approve the reasonableness and amount of DLJ’s fees on both an interim and final basis,” the court merely recited its control of the compensation in the event of subsequent and unanticipated circumstances affecting the reasonableness of that agreed fee.

While we do not reach the question, we assume the award of the bankruptcy court would have -been within its discretion when the agreed compensation was disregarded.

We reverse the order and remand the case for an award complying with § 328.

REVERSED and REMANDED.

1

. See In re Benassi, 72 B.R. 44, 47 (Bankr. D.Minn.1987) citing H.R.Rep. No. 595, 95th Cong. 1st Sess. 330 (1977), reprinted in 1978 U.S.Code Cong. & Admin. News 5963, 6286; In re Confections by Sandra, 83 B.R. 729, 732 (9th Cir. BAP 1987); Lief M. Clark, Paying the Piper: Rethinking Professional Compensation in Bankruptcy, 1 Am. Bankr.Inst. L.Rev. 231, 232 (1993).

2

. In re Reimers, 972 F.2d 1127 (9th Cir.1992)(holding that the bankruptcy court erroneously applied the law by altering the terms of payment without finding those terms to have been "improvident” in light of unforeseeable developments); In re Dividend Development Corp., 145 B.R. 651 (Bankr.C.D.Cal.1992)(section 328 anticipates that the court make a determination as to the reasonableness of a fee arrangement at the beginning of a case); 3 Collier on Bankruptcy ¶ 328.03 (15th ed.1996)("a court may not revisit the prior determination as to the 'reasonableness' of an agreement previously approved unless and until it determines that the terms and conditions proved to be 'improvident' ”).