Sundquist
Sundquist v. Bank of America, N.A. (In re Sundquist)
Opinion
Lead Opinion
Klein, J.
OPINION ON MOTION TO EXPUNGE ATTORNEYS’ FEE LIEN
This Motion to Expunge an attorneys’ fee lien asserted by the debtors’ former attorney involves an important tool in the judicial toolbox for addressing the dilemma of counsel who incompetently represent debtors who have a meritorious case.
Former counsel asserts an attorneys’ fee lien as a challenge to the bankruptcy court’s power to cancel an attorneys’ contract under Bankruptcy Code § 329(b), 11 U.S.C. § 329 (b), and to limit fees for debtors’ counsel to “reasonable” compensation.
The lien is being used as a device to create “hold-up” value by impeding settlement efforts by plaintiffs and defendant in order to extract a fee “far higher” than what this court authorized as “reasonable” compensation under § 329(b).
The Motion to Expunge is GRANTED; the § 329(b)- order requiring that the plaintiffs pay the former attorney $70,000.00 as § 329(b) “reasonable” compensation remains in effect.
Facts
The underlying facts are set forth in this court’s reported decision, Sundquist v. Bank of America, N.A., 566 B.R. 563, 571-85 (Bankr. E.D. Cal. 2017), and will be merely summarized here.