Appeal from the Ninth Circuit Bankruptcy Appellate Panel. Russell, Perris, and Meyers, Judges, Presiding. BAP No. EC-89-1256-RPMe
Before: Norris, Beezer, and Leavy, Circuit Judges.
Joanne Weston ("Debtor") appeals pro se from the Bankruptcy Appellate Panel's ("BAP") decision affirming certain rulings of the bankruptcy court. This appeal boils down to essentially two issues, viz., did the bankruptcy court err by (1) converting Debtor's consolidated Chapter 11 cases to a Chapter 7 proceeding, and (2) awarding attorney's fees to certain creditors? We reject her arguments and affirm on all but one point.
A case filed under Chapter 11 may be converted to a Chapter 7 liquidation, even over the debtor's protests, based on a showing of cause, including:
(1) continuing loss to or diminution of the estate and absence of a reasonable likelihood of rehabilitation;
(2) inability to effectuate a plan;
(3) unreasonable delay by the debtor that is prejudicial to creditors;
(4) failure to propose a plan under section 1121 of this title within any time fixed by the court.
11 U.S.C. § 1112(b)(1) - (4).
Here, the bankruptcy court made extensive and amply supported findings concerning Debtor's inability to make almost any payments to her creditors as well as her unwillingness to take almost any affirmative action in her case despite its having been pending for several years. In light of these considerations, it cannot be said that the bankruptcy court abused its discretion by converting Debtor's consolidated Chapter 11 cases to a proceeding under Chapter 7. See In re Klein/Ray Broadcasting, 100 Bankr. 509, 511 (Bankr. 9th Cir. 1987).
Debtor's attorney's fee arguments, although somewhat unclear, are equally unavailing. To the extent she complains about the in camera submission of Tobin & Tobin's fee request for its work on behalf of First Interstate Bank of California ("FIBC"), the BAP correctly noted that Tobin & Tobin had failed to meet its burden of demonstrating that the attorney-client privilege applied to its request for fees, and properly remanded for a hearing. We adopt the BAP's ruling on this point.
As for Debtor's contention that neither First Interstate Mortgage Corporation ("FIMC") nor FIBC had proven their right to fees, the record reflects not only that all three deeds of trust held by FIMC and FIBC provided for attorney's fees, but that Debtor had conceded their right to fees at the February 14, 1989 hearing.
With respect to Debtor's argument that neither FIMC nor FIBC were entitled to interim fees pending her numerous appeals, the BAP correctly noted that Debtor's failure to obtain a stay of those orders obviates that argument. In line with this point, we note that the bankruptcy court did not grant FIMC and FIBC carte blanche approval of any and all future fee requests; the court simply ruled that those parties were entitled to fees for ...