Justus

MEMORANDUM *

Robert Rentto appeals the Bankruptcy Appellate Panel’s decision which affirmed a bankruptcy court order disallowing his claim for approximately $250,000 in legal fees and costs against the bankruptcy estate of D.W.G.K. Restaurants, Inc. (the Debtor).

Rentto represented the adverse parties (the Kaye Group) in an adversary proceeding brought by the Debtor. 1 Rentto’s client lost the action in 1987. He now seeks recovery for the services rendered in representing the adverse parties.

(1) Rentto filed a creditor’s claim in this proceeding, but he cannot prevail on that because all of his services were rendered after the inception of this bankruptcy. A claim is a “right to payment.” 11 U.S.C. § 101 (5). As relevant here, a creditor is one who “has a claim against the debtor that arose at the time of or before the order for relief concerning the debtor.” 11 U.S.C. § 101 (10)(A). Again, that does not define Rentto’s situation. We recognize that the bankruptcy court’s order of May 15, 1987, provided for allowable claims of the Kaye Group’s creditors, but that does not advance the argument because, as that order indicated, it was speaking of “pre-petition claims,” that is,…

dissenting.

I respectfully dissent.

When Rentto represented the Kaye Group, it had not filed for bankruptcy. Rentto’s claim against his client for his fees never suffered from the infirmity of representing a bankruptcy estate without court approval.

Although the Kaye Group’s assets were consolidated with the D.W.G .K. bankruptcy estate, that did not mean the Kaye Group’s creditors, like Rentto, could only pursue their claims against the now stripped Kaye Group. The consolidation also made “allowable claims” good against the D.W.G.K. bankruptcy estate.

Rentto’s claim would not have been allowable had he represented D W.G.K. after the filing without court approval, but he did not do that. Although Rentto would ordinarily have no claim against D.W.G.K. for representing its adversary, the court order gave him and other Kaye Group creditors such a claim, to avoid inequity from the consolidation of assets. He is an innocent Kaye Group creditor, so far as the record shows, whose claim should, under the consolidation order, follow the Kaye Group’s assets into the D.W.G.K. bankruptcy.