Bankr. L. Rep. P 72,146 in Re Thc Financial Corp., a Hawaii Corporation, Debtor. Lily M. Okamoto v. Thc Financial Corporation

On July 9, 1985, Lily M. Okamoto (Oka-moto) filed an application in the district court for payment for services rendered to a bankrupt estate. THC Financial Corporation (THCF). The trustee filed an opposition. After discovery, the district court granted the trustee’s motion for summary judgment.

FACTS

In early 1977, THCF, a large Hawaiian industrial loan company, filed for bankruptcy under Chapter X of the Bankruptcy Act of 1898, 11 U.S.C. §§ 501-676 (1970) (repealed 1978). The district court approved a reorganization plan to liquidate THCF’s assets and to pay its depositors. One asset was a $700,000 note receivable from LR & I Development One (LR & I). The note was secured by a mortgage on some real estate known as Pulama Gardens in Kahal-uu on the Island of Oahu. LR & I was in receivorship and had defaulted on the note.

With court approval, THCF foreclosed the mortgage and purchased Pulama Gardens at a commissioner’s sale in February of 1983. THCF planned to develop Pulama Gardens to improve its value.

Okamoto, who is an attorney, claims that THCF’s trustee, J. Carl Osborne, and its general counsel, Tamotsu Tanaka, hired her over a four-year period from April, 1981 to April,…