Warner
Warner v. Pease
Opinion
Lead Opinion
MEMORANDUM **
John Warner was appointed by the bankruptcy court to be counsel for Bay Voltex Corporation, the debtor in possession in a Chapter 11 proceeding. Thereafter a trustee was appointed in place of the debtor. The trustee, with the approval of the court, appointed different counsel. A settlement was reached between the debt- or and its shareholder, David Pease.
John Warner applied to the court for his administrative fees as counsel. The court allowed fees for his services to the debtor but disallowed fees for services after the trustee was appointed. Warner then sued in state court against the debtor and David Pease for the disallowed portion of the fees, which he contends were for their benefit.
Upon a motion by David Pease to interpret the bankruptcy court’s orders, the court held that Warner’s filing of the state court action was unjustified as a matter of law and fact and constituted a violation of his terms of employment and a violation of the court’s prior orders. It also awarded sanctions against Warner in the amount of the attorney fees by Pease, which totaled $6500. Warner appealed to the Bankruptcy Appellate Panel, which affirmed the bankruptcy court.