Shop Television Network, Inc. v. Chodos (In re Shop Television Network, Inc.)

MEMORANDUM OF DECISION AND ORDER AFFIRMING BANKRUPTCY COURT TURNOVER ORDER

This is an appeal from a May 26, 1993, bankruptcy court order requiring Appellant Hillel Chodos (“Chodos”) to return $283,-498.38 of excessive compensation (the “Turnover Order”). The Court, having read and considered all papers filed by the parties, and having heard oral argument thereon, finds as follows:

I.

BACKGROUND

Appellant Chodos is a California lawyer who represented Respondent Shop Television *415 Network, Inc. (“STN”) in connection with STN’s lawsuit against J.C. Penney Company, Inc. (“J.C. Penney”) for breach of contract (the “J.C. Penney litigation”). On February 11, 1992, STN issued a check in the amount of $283,498.38 to Chodos. The next day, on February 12, 1992, STN filed a petition under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Central District of California.

Shortly after the bankruptcy petition was filed, STN filed an application before the bankruptcy court for an order approving the retention of Chodos as its special counsel to handle the litigation for STN (as debtor-in-possession) against J.C. Penney. After STN withdrew this application, it…