United States District Court, N.D. Illinois, Eastern Division
IN RE DIRECT MEDIA POWER, INC., Debtor. DIRECT MEDIA POWER, INC., and DEAN TUCCI, Appellants,
RADIO ONE, INC., Appellee.
MEMORANDUM OPINION AND ORDER
Z. Lee United States District Judge
Media Power, Inc. (“DMP”) filed for Chapter 11
bankruptcy in 2016. The case was converted to a Chapter 7
bankruptcy in 2017 and subsequently dismissed. At the time of
dismissal, the bankruptcy court retained jurisdiction to rule
on a pending motion for civil contempt that had been filed by
creditor Radio One, Inc. (“Radio One”). The
bankruptcy court granted the motion in 2018 and later awarded
Radio One its attorneys’ fees and costs associated with
the contempt proceedings. DMP and its president, Dean Tucci,
now appeal the bankruptcy court’s contempt ruling and
award of fees and costs. For the reasons stated herein, the
Court affirms the decisions of the bankruptcy court.
and Procedural Background 
The Cash Collateral Orders
filed for Chapter 11 bankruptcy in November 2016. SA 1. The
following month, the bankruptcy court entered an order
(“the First Interim Order”) authorizing DMP to
use cash collateral during the bankruptcy on an interim
basis, subject to certain conditions. SA 9–10. Namely,
the First Interim Order permitted the use of cash collateral
for “only those categories of expenses listed on”
a budget provided with the order. SA 9–13.
to § 341 of the Bankruptcy Code, a meeting of
DMP’s creditors was held on January 5, 2017. SA 1339.
At the meeting, Tucci testified that DMP had not filed tax
returns for 2014 or 2015. SA 1356 at 18:13–20. Based on
this and other concerns, creditor Radio One filed an
objection to DMP’s motion seeking a second interim
order authorizing the use of cash collateral (“the
Second Interim Order”). SA 14–18. The bankruptcy
court granted DMP’s motion on January 12, 2017, but
imposed certain additional conditions. SA 19–20.
Specifically, the bankruptcy court required DMP to submit to
Radio One “bank statements for any bank account that it
utilized within [the] past twelve months, ”
“reports from its accounting software to include weekly
income statements and detailed transactional reports for the
post-filing period, ” and “all invoices and
receipts in its possession or control that substantiate the
post-filing transactions.” SA 19. In addition, DMP was
ordered to submit to an examination pursuant to Rule 2004 of
the Federal Rules of Bankruptcy Procedure. SA 19.
directed by the Second Interim Order, Tucci testified at the
Rule 2004 examination on January 31, 2017. SA
1558–1681. Tucci stated that he “didn’t set
up [any] safeguards” to ensure that the budget approved
by the bankruptcy court was being followed, and that the way
he operated the company had not changed since the filing of
the bankruptcy petition. SA 1630 at 73:12–17, 1631 at
74:8–10. He also testified as to a number of transfers
made between himself, DMP, and the affiliated companies he
owned, both before and after the entry of the First and
Second Interim Orders. SA 1601–04, 1607–11, 1619,
following week, on February 6, 2017, the bankruptcy court
issued a third cash collateral order (“the Third
Interim Order”), placing additional restrictions on
DMP. SA 24–25. The Third Interim Order prohibited DMP
from using any bank account owned by DMP, DMP Teleservices (a
d/b/a of DMP), or Teledebt Solutions, Inc. (another entity in
which Tucci had an ownership interest), other than “the
Bank of America account ending in #6530.” SA 24. The
Third Interim Order also prohibited DMP from “making
any transfers to affiliate companies or companies owned in
whole or in part (directly or indirectly) by Dean
Tucci.” SA 24. Finally, the Third Interim Order
provided that DMP “shall not pay any expense or
otherwise use, transfer, or expend any of [its] funds without
prior written approval from” Radio One’s counsel.
later, on February 13, 2017, the bankruptcy court issued a
fourth cash collateral order (“the Fourth Interim
Order”), further limiting DMP’s ability to use
cash collateral. SA 29– 30. The Fourth Interim Order
included the restrictions from the previous three orders and
added that DMP must attest under oath that its funds were
being transferred to and from only the #6530 account. SA 30.
Additionally, it required DMP to provide Radio One’s
counsel with weekly reports showing all transactions from the
preceding two weeks involving the #6530 account and another
account ending in #7452. SA 30. DMP was also required to
close another bank account and “transfer all remaining
[DMP] funds into the #6530 account.” SA 30.
bankruptcy court expressly “retain[ed] jurisdiction to
hear and determine all matters arising from or related to the
implementation, interpretation, and/or enforcement of”
the First Interim Order, Second Interim Order, Third Interim
Order, and Fourth Interim Order (collectively, “the
Cash Collateral Orders”). SA 9, 20, 25, 30.
The Contempt Proceedings
One filed a motion for civil contempt on March 8, 2017,
seeking dismissal of the bankruptcy case due to DMP’s
and Tucci’s alleged violations of the Cash Collateral
Orders. See No. 16-36934 (Bankr. N.D. Ill.), ECF No.
95. The bankruptcy court set a hearing for March 9, 2017,
which was then continued to April 19, 2017. SA 34. In the
meantime, the bankruptcy court entered an order imposing
restrictions on the use of cash collateral in accordance with
the Fourth Interim Order, and prohibiting DMP from expending
any assets or diverting sales to other entities. SA
objected to the motion for contempt on March 24, 2017,
arguing that it had been in substantial compliance with the
Third Cash Collateral Order and that dismissal would be
inappropriate. SA 59–66. Based upon the parties’
agreed motion, the bankruptcy court again continued the
hearing on the motion for contempt until May 3, 2017. SA 136.
appeared for a second Rule 2004 examination on April 27,
2017. SA 296–414. He testified that there were certain
inaccuracies in the monthly operating reports he had provided
to the bankruptcy court, and that he had signed the reports
even though he did not believe them to be accurate. SA
days later, on May 2, 2017––the night before the
hearing on Radio One’s motion for
contempt––DMP filed a motion to convert the case
to a Chapter 7 bankruptcy. SA 149. The bankruptcy court
granted the motion, and a Chapter 7 trustee was appointed.
No. 16-36934 (Bankr. N.D. Ill.), ECF Nos. 131, 132.
28, 2017, the bankruptcy court granted Radio One leave to
file an amended contempt motion. No. 16-36934 (Bankr. N.D.
Ill.), ECF No. 151. Before the motion was filed, the trustee
filed a motion to dismiss the bankruptcy case on July 11,
2017, stating that the bankruptcy estate was
“administratively insolvent.” SA 152–57.
Radio One then filed its amended motion for contempt on July
14, 2017. SA 159–71.
Tucci filed a brief in opposition to the motion for contempt,
arguing that if the bankruptcy court were to grant the
trustee’s motion to dismiss, it would no longer have
jurisdiction over the motion for contempt. SA 430. The
bankruptcy court disagreed and dismissed the Chapter 7 case
on September 20, 2017, expressly “retain[ing]
jurisdiction over the request by Radio One, Inc. for contempt
against [DMP] and Dean Tucci.” SA 444.
One was again granted leave to file an amended motion for
contempt, which it did on October 10, 2017. SA 446–59.
After the motion was fully briefed, the bankruptcy court held
a hearing on December 5, 2017. No. 16-36934 (Bankr. N.D.
Ill.), ECF Nos. 188, 190. Subsequently, on March 29, 2018,
the bankruptcy court granted the motion. SA 730–45.
One filed an application for attorneys’ fees and costs
on April 12, 2018, seeking $221, 102.50 in fees and $35,
050.62 in costs. SA 746. DMP responded, opposing any award
but, alternatively, arguing that Radio One was at most
entitled to a total award of $3, 801.56. SA 758. Radio One
then revised its request to $207, 287.50 in fees and $35,
030.34 in costs. SA 1319. The bankruptcy court ruled on the