In Re Viking Ranches, Inc.

AMENDED MEMORANDUM OF DECISION RE APPLICATION TO EMPLOY ACCOUNTANTS (ERNST & WHINNEY)

FACTS

The facts are not in dispute. Viking Ranches, Inc., a Utah corporation (“Viking”), is the debtor-in-possession in a voluntary Chapter 11 case which was filed on March 10, 1988. Viking is engaged in the “operation of a quarter horse and thoroughbred ranch including raising, selling, boarding and racing quarter horses.” The schedules show that Viking’s total debt is $11,734,181 with 843 creditors listed and inventory (horses at cost) exceeding $6,682,000 as of January 31, 1988.

Viking’s substantial and ongoing business activities require the accounting services of a certified public accounting firm. The debtor also requires certain specialized accounting and consulting services from the C.P.A. firm. These services involve:

Viking wants to employ the certified accounting firm of Ernst & Whinney. Ernst & Whinney (“Ernst”) is a major certified accounting firm and has been Viking’s independent accountants and auditors since viking was incorporated. In the application for employment, Ernst admits that it is owed an unsecured, pre-petition debt of $21,025. This debt arises solely from…