In Re Howard Atkins Romie Atkins, Debtors. Howard Atkins, Dba Coyote Health Center v. Wain, Samuel & Co.

Former Chapter 11 debtors, Mr. & Mrs. Howard Atkins (“debtors”), appeal the decision of the Bankruptcy Appellate Panel (“BAP”) affirming the bankruptcy court’s nunc pro tune order that both retroactively authorized services an accounting firm rendered to the estate on an emergency basis and awarded the firm fees for those services. Because we agree that exceptional circumstances existed to warrant the retroactive approval, we affirm the BAP’s decision.

I.

The debtors filed for a Chapter 11 reorganization on March 30, 1990. On May 21, 1991, the debtors’ personal attorney, Mr. Robert Bassell, contacted Mr. Mark Setzen, a partner in the accounting firm of Wain, Samuel & Co. (“Wain, Samuel” or “the firm”), informing Setzen that the debtors urgently needed an experienced certified public accountant to assist their defense in an imminent trial with the Internal Revenue Service (“IRS”). The IRS was seeking approximately $200,000 from the debtors in unpaid taxes, interest and penalties, including penalties for civil fraud. Bassell informed Setzen that the debtors had to respond immediately to IRS interrogatories; if the debtors failed to respond in a timely fashion, the IRS would be…