Appeal from the United States Bankruptcy Court for the Central District of California. Hon. John E. Ryan, Bankruptcy Judge, Presiding. Bk. No. SA 91-30408-JR
Before: Meyers, Riegle*fn1 and Perris, Bankruptcy Judges
MEYERS, Bankruptcy Judge:
The bankruptcy court held that actual disbursement of receipts is a prerequisite to allowance and payment of interim fees to a Chapter 11 trustee.
On January 16, 1991, J. Wayne and Jean M. Stewart ("Debtors") filed a voluntary petition under Chapter 11 of the Bankruptcy Code ("Code").
On December 18, 1991, the bankruptcy court ordered the appointment of a Chapter 11 trustee. The Office of the United States Trustee ("U.S. Trustee") appointed Richard Marshack ("Appellant"). The bankruptcy court approved the application for appointment of trustee on January 2, 1992.
On March 9, 1992, the Appellant filed an application seeking interim compensation in the amount of $38,635.50. The Appellant's summary of receipts and disbursements in the application shows receipts of $1,347,812.38 and disbursements of $24,662.27.
The U.S. Trustee objected to the fee request because it was based on the funds collected instead of the monies disbursed. At a continued hearing on the Appellant's request for compensation, the U.S. Trustee asserted that in exceptional circumstances a trustee could receive interim fees based on the amount collected rather than on the amount disbursed. The court invited the Appellant to establish that the $1,347,812.38 eventually would be disbursed. The Appellant showed that almost $8.5 million of unsecured priority and unsecured general claims had been filed in the case, and that it was therefore virtually certain that the entire sum collected would be disbursed. The court took the application for compensation under submission.
The trial court issued an opinion, In re Stewart, 145 Bankr. 57 (C.Cal. 1992), holding that trustees could not receive interim compensation greater than the maximum amount they were entitled to under Code Section 326, which limits compensation to trustees to a percentage formula of the funds actually disbursed. The court awarded the Appellant $919.87, which is the maximum sum allowed as a percentage of the disbursements of $24,662.27 under Section 326. The Appellant filed a notice of appeal.