Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

In re Unr Industries Inc.

June 6, 1984

IN THE MATTER OF UNR INDUSTRIES, INC., ET AL., DEBTORS-APPELLANTS


Wood and Cudahy, Circuit Judges, and Nichols, Senior Circuit Judge.*fn*

Author: Cudahy

CUDAHY, Circuit Judge.

This appeal involves litigation expenses incurred in connection with a reorganization proceeding pending in the district court. The question before us is whether the debtors must pay the cost of court reporters, translators and interpreters hired to aid in conducting discovery on behalf of creditors. For the reasons expressed below, we vacate the order of the district court and remand the case for proceedings consistent with this opinion.

I.

UNR Industries, Inc. ("UNR") and ten of its subsidiaries and affiliates filed for reorganization on July 29, 1982.An Official Committee of Unsecured Creditors (the "Committee") was formed and, pursuant to 11 U.S.C. § 1103, the Committee hired Norman H. Nachman and the law firm of Nachman, Munitz & Sweig, Ltd., as its legal counsel.

One of the subsidiaries, Leavitt Structural Tubing Co., ("Leavitt") has been consistently unprofitable and, according to the creditors, a drain on the finance of UNR. Leavitt operates, on the south side of Chicago, a tubular steel mill, which it leases from Holco Corporation, a Dutch company. The Committee, seeking to halt the drain on finances caused by operation of the mill (known as the "South Plant"), applied to the bankruptcy court for an order converting Leavitt's reorganization to a straight liquidation.

In addition to the Committee's efforts to preserve Leavitt's assets, two of UNR's individual creditors took steps directed at Leavitt's relationship with Holco. Manufacturers Hanover Trust Company and Citibank, N.A. (the "Banks"), through their own counsel, Richard A. Levy and Levy & Erens, moved for an order to compel Leavitt to reject the South Plant lease and to limit Leavitt's rental payments to no more than the reasonable value of the use and occupancy of the South Plant premises. Part of the Banks' theory is that Holco and Leavitt are actually partners and are not in the relationship of lessor and lessee. To enable them to present these issues to the district court,*fn1 the Banks sought authority to conduct discovery and this authority was eventually granted. Court reporters, translators and interpreters were hired to aid in this discovery, the costs of which totaled about $36,000. Translators were necessary because many documents were in Dutch or German. Further, because of an expedited discovery schedule, the Banks ordered daily transcription of the depositions, which proved to be quite expensive. The translators, interpreters and reporters billed Levy & Erens for their services.

From what we are able to discern from the record, it appears that the Banks conducted discovery primarily on the joint venture issue and related issues which they had raised. The Committee apparently conducted its own discovery on its application to convert the case to a liquidation. The expenses at issue in this case resulted, it seems, mainly from discovery on the joint venture issue.

On October 22, 1983, the Committee, through its attorneys, requested that the debtors pay the court reporters, interpreters and translators employed in the discovery. That application did not refer to any specific statutory provision requiring the debtors to make the payments but it did allege that the "Committee and the New York Banks have utilized court reporters [and translators and interpreters]." The application did not allege that the Committee -- or its counsel -- hired the various reporters, translators and interpreters nor did it indicate whether the Committee would be liable to pay the invoices if the debtors were not compelled to pay.

On November 4, 1983, the district court ordered the debtors to make the payments. The court below found that the application "is correctly considered as brought under 11 U.S.C. § 330" and that Levy's statement earlier that he would not present a fee application for his representation of the Banks referred only to legal services and, presumably, not to expenses. On appeal, the Committee has disavowed reliance on any provision of law except 11 U.S.C. § 330 (and the advisory committee note to a rule which refers to § 330).*fn2 Therefore, if § 330 does not provide legal authority for the district court's order, we shall not consider other potentially relevant provisions as support for the order.

II.

Section 330 of the Bankruptcy Code, 11 U.S.C. § 330, is straightforward. As it relates to this case, it allows the parties listed in 11 U.S.C. § 1103 to seek "reimbursement for actual, necessary expenses." Before addressing the questin whether the case before us involves reimbursable expenses, we find it necessary to discuss problems presented by the appellate record before us.

One of these problems is that both parties have argued factual points for which there is no record support. Circuit Rule 9(c)(2) requires that all facts stated in the staement of facts must be supported by a reference to the record. Neither party in this case complied with that rule. Further, many potentially crucial factual statements made in the briefs and at oral argument are not supported by anything in the record. Both parties have made repeated assertions concerning who initiated certain discovery, who was present at depositions, who asked questions at depositions, what issues were involved in the discovery and who ordered daily or immediate copy of depositions. The parties also disagree as to the form of prior applications for reimbursement made by the Committee's counsel. However, no evidence has been put in the record concerning who ordered copies of the depositions, not a single notice of deposition has been included in the record, not one transcript of a depositon is in the record, none of the discussed documents are in the recrod and none of Nachman, Munitz & Sweig's prior applications for reimbursement are in the record. If various of the factual assertions were supported by the record, they might be dispositive. If these points are vital to the case, the outcome of this appeal might be altered by the failure to include pertinent items in the record. See Casualty Indemnity Exchange v. Village of Crete, 731 F.2d 457, 460 (7th Cir. 1984).*fn3

As noted, the Committee relies exclusively on 11 U.S.C. § 330.*fn4 The Committee has advanced two theories under which the debtor would be required to make the payments. Before the district court, and in its brief on appeal, the Committee argued that § 330 provides for reimbursement of Committee expenses.*fn5 At oral argument, however, the Committee argued alternatively that reimbursement was proper if the expenses were ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.