In re Grivas

MEMORANDUM DECISION

Like a modern day Juliet, this Court must ponder whether that which we call a “settlement” in an application to employ special counsel is the same as that “settlement” embodied in a confirmed reorganization plan. Although the semantic construction may appear to be less ethereal than that engaged in by Juliet, the stakes are high. At issue is the entitlement of three law firms to fees in excess of $865,000.

FACTUAL SUMMARY

Hill & Baskin are general counsel for William L. Grivas, an individual in Chapter 11 proceedings since February 1987. Shortly after the commencement of this Chapter 11 case, the debtor filed a lender liability lawsuit against Security Pacific National Bank (“SPNB”). The lawsuit alleged that SPNB’s precipitous action in shutting down Grivas’ line of credit a mere 45 days after commencing the lender-borrower relationship drove his successful electronics assembly business into Chapter 11 proceedings. To say that this litigation *956 and, indeed, every aspect of this Chapter 11 case, was fought with the ferocity of Armageddon is an understatement.

For a period of time, Hill & Baskin represented the debtor in both the Chapter 11 case and the…