In re: Community Home Financial Services, Inc.

the law firm of Jones Walker LLP ("JW") as counsel to Kristina M. Johnson, the chapter 11 trustee ("Johnson" or the "Trustee") of the estate of the debtor, Community Home Fi- nancial Services, Inc. ("CHFS");

United States Trustee's Objection to Final Application for Compensation and Reim- bursement of Expenses by the Law Firm of Jones Walker LLP as Counsel to Kristina M. Johnson, Trustee of the Estate of Community Home Financial Services, Inc. (the "UST Final Fee Objection") (Dkt. #3340) filed by David W. Asbach, Acting U.S. Trustee for Region 5 ("UST");

Objection of Edwards Family Partnership, L.P. and Charles and Gretchen Edwards Fami- ly Trust, as Successor by Assignment to Beher Holdings Trust, to Final Fee Application of Jones Walker LLP (the "EFP/EFT's Objection to JW's Fees") (Dkt. #3344) filed by the Edwards Family Partnership, LP ("EFP") and the Charles and Gretchen Edwards Family Trust ("EFT"), successor by assignment to Beher Holdings Trust ("BHT");³ Trustee's Final Application for Compensation as the Chapter 11 Trustee of Community Home Financial Services, Inc. (the "Trustee's Final Fee Application") (Dkt. #3315) filed by the Trustee; and

Objection of Edwards Family Partnership, L.P. and Charles and Gretchen Edwards Fami- ly Trust, as Successor by Assignment to Beher Holdings Trust, to Trustee's Final Fee Application for Compensation (Dkt. #3345) filed by EFP/EFT.

At Trial, Douglas C. Noble and Stephen Montagnet represented JW and the Trustee; Jim F. Spencer, Jr., Stephanie M. Rippee, and Erin A. McManus represented EFP/EFT; and Abigail Marbury, Christopher J. Steiskal, and Sammye Tharp represented the UST. Dr. Edwards was present at Trial as EFP/EFT's corporate representative. Kristina M. Johnson, a JW partner, ap- peared at Trial solely in her capacity as the chapter 11 trustee. For nine of the ten Trial days, Jef- Order are repeated for clarity and ease of reference.

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frey Barber ("Barber") was present as JW's representative.⁴ Prior to and at Trial, this third bankruptcy judge, having been assigned this 2012 Bankruptcy Case only in 2021, charged counsel for the parties with presenting all documentary evidence that the parties relied upon in support of their respective positions, including any documents filed in the Bankruptcy Case, any adversary proceeding, or other court action. The parties introduced 349 stipulated exhibits into evidence, consisting largely of pleadings, motions, objections, briefs, transcripts, and orders.⁵As explained to the parties, the Court considers only those filings that were both listed as exhibits and actually used and discussed at Trial. In addition to these 349 stipulated exhibits, JW and the Trustee jointly introduced 33 exhibits into evidence, and EFP/EFT introduced thirteen.⁶During Trial, seven witnesses testified: Jeffrey Barber (JW's cor- porate representative and the Trustee's lead counsel in the Bankruptcy Case); the Trustee; Craig M. Geno (a solo Mississippi bankruptcy practitioner and JW's expert); Antonella Montagna (JW's pricing manager); Christopher R. Maddux (Mississippi bankruptcy practitioner in a peer law firm); Dr. Edwards (interest owner in EFP/EFT and EFP/BHT, the largest creditors of the estate); and Martha Borg (Dr. Edwards' daughter and manager of the family's investments).

TABLE OF CONTENTS

JURISDICTION .............................................................................................................................................................................................................. 5

INTRODUCTION ........................................................................................................................................................................................................... 6

FACTS ............................................................................................................................................................................................................................. 8

DISCUSSION ............................................................................................................................................................................................................. 108

A. Burden of Proof ..................................................................................................................................................................................................... 109 B. Standard for Determining Reasonableness of Fees & Expenses .......................................................................................................................... 111

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C. JW's Fees ............................................................................................................................................................................................................... 113

1. EFP/EFT's Objection to JW's Fees ..................................................................................................................................................................... 115

2. UST Final Fee Objection ..................................................................................................................................................................................... 116

3. Lodestar: Hourly Billing Rates ............................................................................................................................................................................ 117 a. JW's Hourly Billing Rates .............................................................................................................................................................................. 118 b. Analysis of Hourly Rates Charged in this Bankruptcy Case .......................................................................................................................... 121

(1) CHFS's Prior Counsel Charged the Estate $140-$275 Per Hour .............................................................................................................. 121

(2) Craig M. Geno's Testimony ...................................................................................................................................................................... 122

(3) Christopher R. Maddux's Testimony ........................................................................................................................................................ 123

(4) EFP/EFT's Objection to Hourly Billing Rates More Than $450 Is Overruled ........................................................................................ 125

(5) EFP/EFT's Objection to De Leon's Hourly Billing Rate Is Sustained .................................................................................................... 126

(6) EFP/EFT's Objection to a Rate Restoration Is Sustained......................................................................................................................... 127

(a) Antonella Montagna's Testimony Does Not Support a Rate Restoration ........................................................................................... 131

(b) JW's Voluntary/Involuntary Reductions Do Not Warrant a Rate Restoration ................................................................................... 134

(c) JW's Reliance on Feilitech is Incomplete ............................................................................................................................................ 135

(d) JW's Chart of Hourly Billing Rates (Exhibit T-23) Is Not Persuasive ............................................................................................... 137

4. Lodestar: Hours Expended ................................................................................................................................................................................... 142 a. Work That Was Not Necessary and/or Did Not Benefit the Estate ................................................................................................................ 145

(1) Alleged Breach of Fiduciary Duty/Conflict of Interest (All Work Performed after March 2015) ......................................................... 147

(2) Objections to Trustee's Specific Actions ................................................................................................................................................. 149

(a) Trustee's RICO Case Against EFP/BHT, Dr. Edwards & His Adult Children ................................................................................ 151

(b) Trustee's Motions to Withdraw the Reference of the Entire Bankruptcy Case, Intervene & Consolidate ..................................... 156

(c) Trustee's Liquidation Plans ............................................................................................................................................................... 159

(i) Comparison of Trustee's Proposed Treatment of EFP/BHT's Claims ........................................................................................ 160

(ii) Analysis ........................................................................................................................................................................................ 162

(iii) Trustee's Original & Second Amended Plans ............................................................................................................................ 164

(iv) Penalty Plan ................................................................................................................................................................................. 165

(d) Resumption of Litigation of Edwards Adversary Proceedings ........................................................................................................ 169

(i) Law of the Case .............................................................................................................................................................................. 170

(ii) Judicial Estoppel ........................................................................................................................................................................... 173

(iii) Billing Judgment .......................................................................................................................................................................... 177

(iv) Analysis ........................................................................................................................................................................................ 181

(e) Trustee's Appeal of District Court's Denial of Henderson's & Wells Marble's Fees ...................................................................... 186 b. Denial of Estimated Fees Pursuant to Bankruptcy Rule 2016 .......................................................................................................................... 190

(1) Bankruptcy Rule 2016 & (2) Analysis ........................................................................................................................................................ 191 c. Trustee Work Done by JW's Professionals ....................................................................................................................................................... 193

(1) Servicing Loans of Consumer Borrowers in Bankruptcy ........................................................................................................................... 197

(2) Preparing Statutorily Required Monthly Operating Reports ...................................................................................................................... 199 d. Duplication of Services ...................................................................................................................................................................................... 201 e. Overstaffing ........................................................................................................................................................................................................ 202

(1) Reviewing, Drafting & Preparing ............................................................................................................................................................... 205

(2) Attending ..................................................................................................................................................................................................... 208

(3) Summary ...................................................................................................................................................................................................... 212 f. Billing for Administrative/Clerical Work .......................................................................................................................................................... 213

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g. Legal Work Done by Trainees/Block Billing .................................................................................................................................................... 215 h. Travel Time & i. Excessive Research on Caulkett ............................................................................................................................................ 216 j. Defending Fee Applications/Motion To Transfer Fee Disputes ......................................................................................................................... 217 k. Fees Incurred After March 2023 in Excess of $75,000 Holdback in Joint Plan ............................................................................................... 219

5. Lodestar Calculation ............................................................................................................................................................................................ 220

6. Adjustments to JW's Fees .................................................................................................................................................................................... 221 a. Adjustment to JW's Fees Under § 330(a)(3) ...................................................................................................................................................... 221 b. Adjustment to JW's Fees Under Johnson Factors ............................................................................................................................................. 222 D. JW's Expenses ....................................................................................................................................................................................................... 234

1. CALR Charges ..................................................................................................................................................................................................... 235

2. Court Records/PACER ........................................................................................................................................................................................ 237

3. Copies & 4. Delivery Charges ............................................................................................................................................................................. 238

5. Overtime Pay & 6. Meals ...................................................................................................................................................................................... 239

7. Estimated Expenses ............................................................................................................................................................................................... 240 E. Summary of Court's Ruling on JW's Compensation (Fees & Expenses) ............................................................................................................ 240 F. Trustee's Compensation ........................................................................................................................................................................................ 241

1. Statutory Commission under § 326...................................................................................................................................................................... 241

2. Fair Compensation under § 330(a)(3) .................................................................................................................................................................. 244 a. Trustee's Hourly Rate ........................................................................................................................................................................................ 246 b. Trustee's Compensation from March 2015 to the Present & c. Trustee's RICO Case Against EFP/BHT, Dr. Edwards & His

Adult Children & d. Trustee's Motions to Withdraw the Reference of the Entire Bankruptcy Case, Intervene & Consolidate &

e. Penalty Plan & f. Trustee's Compensation for Services Rendered in Pursuit of Litigation Against Dr. Edwards & EFP/BHT ................. 248

g. Denial of Trustee's Estimated Fees Pursuant to Rule 2016 & h. Vague Time Entries in Trustee's Fee Applications ....................................... 249

i. Defending Fee Applications/Motion to Transfer Fee Disputes .......................................................................................................................... 251 j. Fees Incurred After March 2023 in Excess of $75,000 Holdback in Joint Plan ................................................................................................ 252 k. Lodestar Calculation .......................................................................................................................................................................................... 252

3. Adjustment to Trustee's Compensation ............................................................................................................................................................... 253 a. Adjustment to Trustee's Compensation Under § 330(a)(3) .............................................................................................................................. 253 b. Adjustment to Trustee's Compensation Under Johnson Factors ...................................................................................................................... 255 G. Summary of Court's Ruling on Trustee's Compensation ..................................................................................................................................... 262 H. Additional Fees Pursuant to Joint Plan—"Estimated Commissions" .................................................................................................................. 262

1. How the Court Calculates In-Kind Disbursements or Estimated Commissions Pursuant to Joint Plan & 2. Assignment of Rights to Costa Rica Condo Sale Escrow Account ............................................................................................................................................................ 266

3. Assignments of Mortgage Portfolios & Home Improvement Loans ................................................................................................................. 268

CONCLUSION ........................................................................................................................................................................................................... 271

JURISDICTION

The Court has jurisdiction over the parties to and the subject matter of this proceeding pursu- ant to 28 U.S.C. § 1334. This is a core proceeding under 28 U.S.C. § 157(b)(2)(A). Although the Bankruptcy Case has been closed, the Court retained jurisdiction over "all matters regarding trus- tee compensation and the payment of professional fees." (Dkt. #3399). Notice of the Trial was

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proper under the circumstances.

INTRODUCTION

This Bankruptcy Case has endured thirteen years, outlasting two bankruptcy judges and the arrest, conviction, and 57-month prison sentence served by CHFS's owner. It has spawned twelve adversary proceedings;⁷eight civil actions in the U.S. District Court for the Southern Dis- trict of Mississippi (the "District Court");⁸one criminal action in the District Court;⁹nine appeals before the District Court;¹⁰and five appeals before the Fifth Circuit.¹¹Yet there are only two ac- tive creditors (both controlled by Dr. Edwards) in this Bankruptcy Case. The last remaining issue is a fee dispute of epic proportions—covering 45 interim and final fee applications submitted by JW and the Trustee.¹²For services rendered from January 8, 2014 through November 16, 2023, JW seeks final approval of $6,061,754.51 in fees and expenses and an additional $920,000 upward adjustment of the "lodestar" amount for total compensation of $6,981,754.51. (STP-132). EFP/EFT, whose predecessors (EFP/BHT) have been dubbed the es- tate's "super-duper" creditors,¹³and the UST object to the JW Final Fee Application. EFP/EFT contest JW's billing judgment in almost every way possible and oppose any fee enhance-

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ment/rate restoration.¹⁴The UST challenges all estimated fees and says that no fee enhancement is justified under these facts.¹⁵

For services rendered during this same period, the Trustee, who is a partner at JW, seeks $1,168,347.37 in statutory and other compensation.¹⁶(STP-30 at 1). That amount plus the fees and expenses that JW seeks amounts to total compensation of $8,150,101.88. EFP/BHT object on numerous grounds.¹⁷

The historical contentiousness between the parties continued at Trial before this third judge. Throughout this Bankruptcy Case, counsel have pointed a finger at the opposing party, each oth- er, and every judge who has touched this Bankruptcy Case. They have criticized how the first bankruptcy judge ran his docket, and when faced with an unfavorable ruling by this Court or an appellate court, they argued that the adjudicating court got it wrong. Even before the Trial ended, the parties expressed their willingness to appeal this Order. The fee issue has dominated this Bankruptcy Case.

But bankruptcy cases should be about reorganizing or liquidating the assets of the estate— not fees. At every level of review, courts have commented on the fees in this Bankruptcy Case.¹⁸ Both prior bankruptcy judges have cut JW's interim compensation. Too much time and effort (by

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all parties) has been expended on fees. Although fees are a by-product of actions necessary to administer an estate, fee disputes should never detract from work that is necessary and/or bene- fits the estate. See Hensley v. Eckerhart, 461 U.S. 424 (1983) ("A request for attorney's fees should not result in a second major litigation."). Unfortunately, that is what happened here.

FACTS¹⁹

In fee disputes, a bankruptcy court must explain "why compensation was awarded at the lev- el it was given" or why compensation was denied. Cont'l Ill. Nat'l Bank & Trust Co. v. Charles N. Wooten, Ltd. (In re Evangeline Ref. Co.), 890 F.2d 1312, 1328 (5th Cir. 1989). A line-by-line review and discussion of each time entry is generally unnecessary. Given the parties' litigious history, the Court is compelled to outline in some detail the circumstances that led to the ap- pointment of the Trustee, her employment of JW as her counsel, the challenges she faced, and the services she and her firm rendered during the pendency of this Bankruptcy Case.

CHFS

CHFS was a mortgage servicing company run by William D. Dickson ("Dickson") from an office in Jackson, Mississippi. CHFS purchased mortgage loan portfolios at a discount and ser- viced those loans, as well as loans owned by other companies for which CHFS received a com- mission. (Dkt. #167 § 2.2). Until late 2013, CHFS's twenty or so employees serviced 3,889 sec- ond and third-tier mortgage loans. (STP-163 at 22, 36). The mortgage properties were located in about 30 states across the country. (STP-163 at 21).

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Dickson

Dickson owned CHFS and at least two other loan servicing companies and ran all businesses from the same Jackson office.²⁰The business transactions at issue here involved only CHFS.

Home Improvement Loans

Before Dickson and Dr. Edwards met, CHFS purchased a portfolio of 1,089 consumer loans known as the "Home Improvement Loans." To finance the purchase, CHFS obtained a loan from Roy Al Finance & Loan Company. In 2006, Dickson began searching for replacement financing. To aid in his search, CHFS hired New Jersey business broker, Joe Logan ("Logan"), who intro- duced Dickson to Dr. Edwards. (Dkt. #3532 at 6-7).

Dr. Edwards

Dr. Edwards, a doctor and investor from Baltimore, Maryland, has been involved in the loan- servicing business since 1982. (Dkt. #3532 at 5-6). He conducted business through various part- nerships and trusts that he formed and controlled, and he frequently shuffled assets and liabilities among them.

Dr. Edwards and his daughter, Martha Borg ("Borg"), traveled to Jackson to meet Dickson in 2006 and explore a possible investment in CHFS. (Dkt. #3527 at 6-7). Satisfied with what they gleaned from their visit with Dickson, Dr. Edwards offered CHFS a revolving line of credit up to $10,000,000 to replace its existing credit facility and to provide capital to purchase more con- sumer mortgage loans.²¹(Dkt. #3532 at 7). CHFS accepted the offer.²²

The line of credit was funded, at different times, by four entities that Dr. Edwards owned

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and/or controlled: The Rainbow Group, Ltd., a British Virgin Islands ("BVI") company; Beher Holdings, Ltd., also a BVI company; and EFP/BHT. (Dkt. #167 at 9). As the result of assign- ments and amendments to loan documents in 2007 and 2010, EFP/BHT, which Dr. Edwards viewed fundamentally (although not technically) the same entity, eventually became the sole lenders in a 75/25 percentage split.²³(Dkt. #3532 at 99). When disputes later erupted between the parties, the lenders were EFP/BHT.

The amended agreements resulted in a $4,000,000 commercial note between CHFS and EFP, and a $12,000,000 commercial note between CHFS and BHT. Borg managed this investment for the Edwards family. (Dkt. #3527 at 7). As part of their agreements, the parties designated Harold B. McCarley, Jr. ("McCarley"), a Mississippi lawyer, as the custodian of the original loan docu- ments and assignments. (Dkt. #3527 at 12).

Mortgage Portfolios

The business arrangement regarding the Home Improvement Loans had been working smoothly for about a year when Dickson and Dr. Edwards entered into a different transaction. (Dkt. #3532 at 9). Dr. Edwards, through entities he owned and/or controlled (not necessarily EFP/BHT), provided CHFS approximately $9,000,000 to purchase additional mortgage portfoli- os of subprime loans (the "Mortgage Portfolios") (STP-163 at 35). Using these funds, CHFS purchased 2,080 loans in seven separate transactions from 2008 to 2011.²⁴In this Order, the Mortgage Portfolios are separately referred to as "Portfolios #1-7."²⁵

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Written agreements governed only Portfolios #1-2, and #7; no written agreements governed Portfolios #3-6. EFP was the counterparty to the written agreements governing Portfolios #1-2; BHT was the counterparty to the written agreement governing Portfolio #7. Dr. Edwards main- tained possession of the original notes and assignments comprising Portfolios #1-6. (Dkt. #3532 at 9). As to Portfolio #7, the original notes and assignments were held by a third-party custodian, Patrick Frascogna ("Frascogna"), a Mississippi lawyer who rented office space from Dickson.²⁶ (Dkt. #3532 at 9).

Original Lawsuit—State Court

By 2011, both Dickson and Dr. Edwards believed the loan agreements between CHFS and EFP/BHT had been breached. (Dkt. #3532 at 10). CHFS stopped paying EFP/BHT, and in early 2012, Dr. Edwards declared the loans in default. (Dkt. #3532 at 11). On February 15, 2012, CHFS and Dickson sued EFP/BHT and Dr. Edwards in the Chancery Court of Hinds County, Mississippi, Case No. 2012-268, seeking specific performance, damages for breach of contract, and recission or modification of the loan agreements (the "Original Lawsuit").

Receivership Action—District Court

Dr. Edwards removed the Original Lawsuit to District Court (3:12-cv-00252-CWR-LRA, Dkt. #1) where he asserted counterclaims seeking the appointment of a receiver to manage CHFS's affairs and a judgment against Dickson personally on his guaranty (the "Receivership Action"). During this time, Dickson transferred approximately $3.7 million from CHFS's operat- later, the final adjudication of these disputes was: CHFS owned Portfolios #1-6; BHT owned Portfolio #7; EFP/BHT loaned CHFS the funds to purchase Portfolios #1-6; and the loans to purchase Portfolios #1-3 were valid but the loans to purchase Portfolios #4-6 were not.

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ing account to an account at a Panamanian bank held by W.W. Warren Foundation, a company Dickson formed for this purpose. (STP-163 at 47).

Bankruptcy Filing

On May 23, 2012, during a lunchbreak at the trial of the Receivership Action, CHFS filed a chapter 11 petition for relief. (Dkt. #1; Dkt. #3532 at 11). The commencement of the Bankruptcy Case stayed the Receivership Action against CHFS. See 11 U.S.C. § 362(a).²⁷ In the Bankruptcy Case, CHFS proceeded as the debtor-in-possession (the "DIP") under Dickson's management for approximately nineteen months.²⁸See 11 U.S.C. § 1101. The status and validity of EFP/BHT's claims quickly became the predominant issue. Dr. Edwards alleged that EFP/BHT owned all of the Home Improvement Loans and Mortgage Portfolios and held a perfected security interest in all cash in CHFS's accounts. He opposed almost all requests to spend any funds to pay administrative expenses as violating EFP/BHT's ownership rights to the notes and their interests in their "cash collateral."

Proofs of Claim

Thirty-four proofs of claim were filed in the Bankruptcy Case. Six proofs of claim totaling $30,409,302.01 were filed by EFP/BHT (Cl. #4-9; STP-2 to -7; Dkt. #3529 at 60); six were later withdrawn (Cl. #1, #11, #13, #14, #16, #32); two were later satisfied (Cl. #19, #25); and one was filed by Dickson based on an alleged indemnity agreement. (Cl. #10). The remaining nineteen proofs of claim totaled only $207,405.62.²⁹

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EFP/BHT's six proofs of claim arose from their two distinct business relationships with CHFS regarding the Home Improvement Loans and the Mortgage Portfolios. (STP-2, -7). As to the Home Improvement Loans, EFP/BHT filed identical proofs of claim four and five ("POC 4-1 & 5-1") (STP-2, -3), each in the amount of $18,390,660.32 for "money loaned" to CHFS, which they alleged was secured by the underlying notes. EFP/BHT filed claims in identi- cal amounts because they did not know the amount CHFS owed them separately. Years later, a forensic accountant, Jeffrey Aucoin ("Aucoin") answered that question at the trial of adversary proceedings in late 2017. (STP-93). He opined, and EFP/BHT later stipulated, that as of the date of the bankruptcy petition, CHFS owed $4,458,124 to EFP and $13,374,372 to BHT for a total debt of $17,832,496 related to the purchase of the Home Improvement Loans. (STP-30 at 63).

As to Portfolios #1-6, EFP filed proofs of claim six and nine ("POC 6-1 & 9-1") (STP-4, 7), each in the estimated amount of $7,101,094.35. In POC 6-1, EFP asserted an unsecured claim for damages arising out of CHFS's breach of its fiduciary duty, and in POC 9-1, EFP asserted a se- cured claim "should it be determined that EFP does not own the loan portfolios." (STP-7). Aucoin concluded, and EFP stipulated, that as of the date of the bankruptcy petition, CHFS owed $6,913,462 to EFP on Portfolios #1-6, assuming that: (1) CHFS owned Portfolios #1-6, (2) the transactions were loans and not joint ventures, and (3) all loans were enforceable against CHFS. (Adv. 13-00104-EE, Dkt. #126 at 36-37).

As to Portfolio #7, BHT filed proofs of claim seven and eight ("POC 7-1 & 8-1") (STP-5-6), each in the estimated amount of $4,917,547.35. In POC 7-1, BHT asserted an unsecured claim Case No. 3:18-cv-00154-CWR, Dkt. #32 at 3 nn.2-4.

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for CHFS's alleged breach of its fiduciary duty. In POC 8-1, BHT asserted a secured claim

"should it be determined that BHT does not own the loan portfolios." (STP-6). Aucoin concluded and BHT stipulated, that as of the date of the bankruptcy petition, CHFS owed $4,866,989 to BHT on Portfolio #7. (Adv. 13-00104-EE, Dkt. #126 at 36-37).

Removing duplicative proofs of claim and substituting the stipulated amounts for the amounts alleged in the proofs of claim, EFP/BHT's purported claims against CHFS totaled $29,612,947 as of May 23, 2012. The table below summarizes the loans between CHFS and EFP/BHT using the stipulated numbers:

Consumer Loans Business Loan Edwards-Related Purchased by CHFS to CHFS Lender

Home Improvement Loans $17,832,496 EFP/BHT Portfolios #1-6 $6,913,462 EFP Portfolio #7 $4,866,989 BHT

TOTAL $29,612,947 (T-47). CHFS objected to POC 4-1 & 5-1 (Dkt. #162), challenging the duplicative amounts, EFP/BHT's secured status, and the validity of the loans that financed the purchase of the Home Improvement Loans because of alleged defects in the assignments to EFP/BHT. CHFS also ob- jected to POC 6-1 & 9-1 (Dkt. #163) and POC 7-1 & 8-1 (Dkt. #164), contesting the duplicative amounts and denying any liability.

EFP/BHT were by far the largest creditors of the estate. In CHFS's bankruptcy schedules, Dickson valued the Home Improvement Loans and the Mortgage Portfolios at $42,534,267, which exceeded the debt owed EFP/BHT. (STP-171 at 4).

Interim Cash Collateral Orders

During the first fifteen months of the Bankruptcy Case, CHFS's collections from its consum- er borrowers reached $9,059,191.49. (Dkt. #416). EFP/BHT filed two motions asking the Court

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to prohibit CHFS from using either their "cash collateral" or their property. (Dkt. #3532 at 15-

16). The Court entered interim orders on July 10, 2012, and May 3, 2013, proscribing CHFS's handling of its cash flow. (STP-156, -57). These interim cash collateral orders required CHFS to segregate collections on the Home Improvement Loans from the Mortgage Portfolios, deposit all collections, less servicing fees, into specially designated escrow accounts, make monthly ade- quate protections payments to EFP/BHT equal to all principal payments received on the Home Improvement Loans, and provide EFP/BHT internet access to view the accounts, and prohibited CHFS from spending any funds other than amounts budgeted for operating and other expenses.³⁰ (Dkt. #3532 at 16). The first interim cash collateral order entered on July 10, 2012 expired by its own terms on September 30, 2012. (STP-156). The second interim cash collateral order dated May 3, 2013 provided for a three-month budget of expenditures. (STP-157). The monthly budget attached to the second interim cash collateral order reflected estimated payroll expenses of $60,000 and professional fees of $70,000.³¹(STP-158; Dkt. #3526 at 148).

Dickson Guaranty Suit—District Court

In the Receivership Action, which remained pending between EFP/BHT and Dickson, the District Court severed EFP/BHT's counterclaims against Dickson from those against CHFS, rea- ligned the parties (with EFP/BHT as the plaintiffs and Dickson as the sole defendant), and as- signed the former Receivership Action a new case number, 3:13-cv-00587-CWR-LRA (the

"Dickson Guaranty Suit"). (Case No. 3:12-CV-00252, Dkt. #109, #110).

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Edwards Adversary Proceedings Initiated by Debtor-in-Possession

During the first six months of the Bankruptcy Case, CHFS and Dickson initiated three adver- sary proceedings against EFP/BHT alleging claims similar to those they alleged in the Original Lawsuit: 12-00091-EE filed on August 24, 2012 (the "Home Improvement Loans Adversary")³²; 12-00109-EE filed on October 24, 2012 ("Adversary Proceeding 12-00109-EE")³³; and 13- 00104-EE filed on November 26, 2013 (the "Mortgage Portfolios Adversary")³⁴(Dkt. #102, #145, #414). Collectively, these three adversary proceedings are referred to as the "Edwards Ad- versary Proceedings" unless otherwise noted.

CHFS's Plan of Reorganization As Proposed by Debtor-in-Possession

On January 29, 2013, approximately eight months after the bankruptcy filing, CHFS—led by Dickson—filed the Disclosure Statement with Respect to Plan of Reorganization (Dkt. #167) and Plan of Reorganization (Dkt. #168). CHFS's plan gave EFP/BHT four options for the treatment of their claims regarding the Home Improvement Loans. CHFS proposed either to:

• turn over all Home Improvement Loans to Dr. Edwards, BHT, and EFP in return for a re- lease of all claims against CHFS and Dickson;

• cram down the loans from EFP/BHT into a secured claim of $7,500,000 and an unse- cured claim of $10,000,000 and pay EFP/BHT the secured claim in monthly installments at 5.5% annual interest;

• Pay EFP/BHT the entire debt in monthly installments at 4% annual interest as funds are collected on the Home Improvement Loans; or

• litigate the Home Improvement Loans Adversary and escrow each month the principal

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collected plus 5.5% annual interest. As to EFP/BHT's claims regarding the Mortgage Portfolios, CHFS proposed in its plan to collect the payments on the loans, deposit the collections into an escrow account less a servicing fee, and litigate the status of EFP/BHT's claims in the pending Mortgage Portfolios Adversary. EFP/BHT objected to CHFS's proposed plan and moved the Court to dismiss the Bankruptcy Case or convert it to chapter 7. (STP-175); see 11 U.S.C. § 1112. They argued that CHFS filed the bankruptcy petition in bad faith and complained about the amount of fees billed by CHFS's attorneys. The Court held confirmation of CHFS's proposed plan in abeyance pending resolution of EFP/BHT's motion. (STP-81).

Dickson's $9,095,000 Theft

In the fall of 2013, Dickson began surreptitiously moving CHFS's business operations from Jackson to Costa Rica. (STP-53; Dkt. #3532 at 17). He fired all CHFS employees effective De- cember 31, 2013; signed a contract with Mike Meehan ("Meehan") to provide debt collection services at a call center in Costa Rica; and shipped CHFS's computer servers, other office equipment, and loan documents to the new call center.³⁵(STP-54; Dkt. #1017-1 at 3). As the Trustee put it at Trial, Dickson "picked up his toys out of the sandbox and left." (Dkt. #3529 at

45).

By early 2014, Dickson had transferred approximately $9,095,000 from the DIP accounts to accounts either in his name or in the name of a company he owned or controlled (other than

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CHFS).³⁶(Dkt. #3530 at 159; Dkt. #3532 at 17). After these withdrawals, only about $7,500 re- mained in CHFS's DIP accounts. Dickson also changed CHFS's mailing address to a Nevada address, where loan payments were then forwarded to Costa Rica.

On December 20, 2013, counsel for CHFS (who until then was unaware of Dickson's activi- ties) notified the Court that, based on then available information, Dickson had moved CHFS's principal place of business to Panama, had transferred estate funds to bank accounts in Panama, and had set up branch offices in Panama and Costa Rica. (STP-179).

Johnson's Emergency Appointment as Chapter 11 Trustee

The UST filed an emergency motion for the appointment of a chapter 11 trustee. (Dkt. #427). The Court granted the UST's motion on December 23, 2013. (Dkt. #429). The UST then filed a motion asking the Court to approve Johnson's appointment. (STP-63). Although her appointment as the chapter 11 trustee in this Bankruptcy Case would be her first,³⁷Johnson was well qualified for the position. She had practiced bankruptcy law since 1992, was a member of the board of di- rectors for the American Bankruptcy Institute, and was a fellow in the American College of Bankruptcy. (Dkt. #3526 at 150).

Johnson testified at Trial that before she accepted the UST's appointment, she reviewed the pleadings filed in the Bankruptcy Case and related adversaries to grasp a full understanding of the course of proceedings (which at that time spanned only two years). (Dkt. #3529 at 26). She knew the bankruptcy judge assigned to the Bankruptcy Case and the pace of the proceedings. She was aware that CHFS had no employees in its Jackson office and only about $7,500 in its

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DIP accounts. (Dkt. #3526 at 107). Dickson and CHFS (but not EFP/BHT) objected to Johnson's appointment, alleging that she was not "disinterested" as required by statute. (STP-182). Given the uncertain status of the bank- ruptcy estate, EFP/BHT filed a response supporting Johnson's appointment.³⁸(STP-64). The Court approved Johnson's appointment over Dickson's and CHFS's objections. (Dkt. #473). The Trustee described the situation immediately after her appointment as "absolute chaos."

(Dkt. #3526 at 99). Her immediate goals were to: (a) stabilize the Home Improvement Loans and Mortgage Portfolios consisting of 3,889 loans; (b) recover the funds Dickson removed from the estate and prevent him from diverting any more funds; and (c) investigate CHFS's financial af- fairs. (STP-53 to -56).

Approval of JW's Employment as Trustee's Counsel

On January 22, 2014, the Trustee filed an application to employ her own law firm, JW, as her counsel pursuant to § 327(d).³⁹(STP-66, 69, 74). The Trustee met with Barber and other mem- bers of JW's management team to discuss the firm's employment and, in particular, to assess the risk that the estate may never recover sufficient funds to pay the firm's fees and expenses. (Dkt. #3528 at 36-37; Dkt. #3529 at 47). JW was aware at that time that CHFS had only about $7,500 in its operating account and that its bankruptcy schedules showed that EFP/BHT's claims against the estate totaled $30,409,302.01. (Dkt. #3524 at 192-93; STP-349).

The Trustee chose her law partner, Barber, as lead counsel. Barber described his role as the

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"quarterback" in the case, assigning work to other attorneys and legal assistants as needed. (STP- 66; Dkt. #3524 at 21). The Trustee testified that she did not seek the lead counsel role because she "didn't like the optics." (Dkt. #3526 at 100).

The Trustee's employment of JW was contingent on the Court's approval. 11 U.S.C. § 327. As part of its employment application, JW submitted a declaration asserting that the firm was

"disinterested" as required by the Bankruptcy Code. (STP-66). CHFS and Dickson (but not EFP/BHT) disputed that assertion. (STP-182). They alleged that JW's past representation of an accounting firm retained by CHFS as an expert witness created a conflict of interest. (STP-63-74,

77). EFP/BHT, in contrast, supported JW's employment, stating:⁴⁰ The situation does not present a conflict. Dickson and CHFS have manufactured the no- tion of a potential conflict of interest in an improper attempt to pressure the Trustee into using an expert that the debtor thinks might be more favorable to it, i.e., accept what our preferred expert says or we will object to your disinterestedness. The law does not permit the ousted debtor-in-possession to have such a stranglehold on the Trustee appointment process or the manner in which the Trustee decides to operate the company and pursue or not pursue the company's claims.

(STP-64 ¶ 18). The Court overruled Dickson's and CHFS's objections and approved JW's em- ployment nunc pro tunc to January 8, 2014. (STP-74).

JW's Employment Application

In its employment application, JW agreed to represent the Trustee "on an hourly rate basis that is lower than [JW]'s standard hourly rates."⁴¹(STP-66 at 4). The Trustee testified that JW agreed to charge "discounted" rates because she "did not want to exacerbate the situation." (Dkt.

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#3528 at 36-37). The "discounted" hourly billing rates in the employment application ranged from $220 to $450. (STP-66 at 4-5; Dkt. #3524 at 22). They were "subject to annual adjustments in the normal course of JW's business to reflect economic and other conditions and these ad- justments are usually made effective January 1 of each calendar year." (STP-66). The invoices attached to JW's interim fee applications reflect that the firm did periodically raise their rates throughout the Bankruptcy Case.

The employment application listed seven attorneys (five partners and two associates) and one paralegal "likely to be performing bankruptcy-related services"⁴²but noted that other attorneys

"may be involved as needed." (STP-66 at 4) (emphasis added); see FED. R. BANKR. P. 2014(b). By the end of this Bankruptcy Case, the number of JW's professionals billing the estate jumped almost tenfold to 79.⁴³

Fee Disputes Between EFP/BHT & CHFS's Attorneys (Henderson & Wells Marble)

The Trustee's employment of JW as her counsel meant that the attorneys chosen by Dickson to represent CHFS—now the debtor-out-of-possession—no longer had a client. 11 U.S.C. §§ 704, 1106; Lamie v. U.S. Trustee, 540 U.S. 526, 538-39 (2004). CHFS had been represented by Derek A. Henderson ("Henderson") as general bankruptcy counsel and Roy H. Liddell and Jonathan Bissette at Wells Marble & Hurst, LLC ("Wells Marble") as special counsel. (Dkt. #52, #76).⁴⁴The Court entered separate orders allowing them to withdraw as CHFS's counsel. (Dkt.

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#401, Dkt. #559). At that time, both Henderson and Wells Marble had unbilled and unpaid fees for work performed before the Trustee's appointment.

On September 4, 2013 and November 12, 2013, Wells Marble filed its fourth and fifth fee applications (STP-174, -177), seeking compensation for services rendered from May 2, 2013 through October 31, 2013 totaling $129,002.59. The Court had previously approved, without ob- jection, interim fee applications totaling $71,887.57 for the period from May 1, 2012 through April 30, 2013 (Dkt. #132, #182, #259). In these applications, Roy H. Liddell billed $240 per hour, and Jonathan Bissette billed $140 per hour.

Henderson likewise filed his final application. He sought fees and expenses totaling $51,764.44 for work performed from September 2, 2013 to December 28, 2013. (STP-181). The Court had previously approved, without objection, interim fee applications totaling $189,499.55 for work performed from May 23, 2012 to August 31, 2013 (Dkt. #131, #166, #254, #374). Hen- derson charged an hourly billing rate of $275.

EFP/BHT objected to both Wells Marble's and Henderson's final fee applications. (STP-176,

178). They did not question their hourly billing rates or the time they expended but opposed any fees related to the Edwards Adversary Proceedings on the ground that CHFS's attorneys could not have reasonably believed that the litigation would benefit the estate.⁴⁵(Dkt. #3532 at 86, 88-

89). They also opposed Henderson's fees for the time he spent drafting and proposing CHFS's plan of reorganization, which they viewed as unconfirmable on its face because it released all claims against Dickson.

The Trustee also objected to Henderson's fees for work Henderson expended after December

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18, 2013 "as those fees and expenses do not appear to be primarily for the benefit of the Estate, but rather, for the benefit of insiders of the Debtor and/or professionals." (Dkt. #529 at 2). Her objection was later resolved by agreement. (Dkt. #1227 at 2).

The hearing on these fee applications was held on January 30, 2015. (Dkt. #3530 at 266). The Court issued separate orders awarding the requested fees. (Dkt. #1227, #1272). As discussed be- low, the fee awards were ultimately upheld by the Fifth Circuit on appeal.

Trustee's Investigation

The Trustee discovered that Dickson may have used the $9,095,000 in stolen funds to pur- chase property in Costa Rica. (Dkt. #918). Her investigation was hampered by Dickson's lack of cooperation. He refused to answer any questions (Dkt. #3524 at 102) and later, after pleading guilty, claimed memory loss. (Dkt. #3524 at 102). She did not trust CHFS's former employees to assist her in her investigation, and even if she wanted to rehire them, CHFS had no cash to pay them and no place for them to work. CHFS's cash had dwindled to $7,500, and its office build- ing had been foreclosed upon. (STP-132 at 10; Dkt. #3524 at 57). During these initial months, the Trustee operated CHFS's business from JW's law office using JW's legal professionals to service and manage the loans temporarily. (Dkt. #3528 at 178-79).

Dr. Edwards' Investigation

Meanwhile, Dr. Edwards conducted his own investigation. He hired counsel in Costa Rica to subpoena banks where Dickson or his affiliated companies held foreign accounts. (EE-7-9; Dkt. #3532 at 17). He prepared a report for the FBI discussing his business relationship with Dickson and included a "diverted funds summary" chart depicting where he thought Dickson had diverted the stolen funds. (Dkt. #3524 at 202-03; Dkt. #3526 at 117; Dkt. #3532 at 18). He sent the Trus-

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tee a copy of the FBI report, which read in pertinent part: "CHFS filed multiple complaints against its creditors and did everything it could to complicate and prolong the bankruptcy." (EE- 7; Dkt. #3532 at 17-18). He offered to initiate proceedings to freeze Dickson's (not the estate's) accounts in Costa Rica.⁴⁶Dr. Edwards testified that at this stage in the Bankruptcy Case, he thought he and the Trustee "were working together to try to recover the stolen cash to collect on these loans." (Dkt. #3532 at 20).

Trustee's Contacts with Borrowers

With copies of loan records provided by Dr. Edwards and information gleaned from CHFS's mail, the Trustee sent letters to approximately 800 borrowers instructing them to: remit their loan payments to her; provide her with copies of any loan documents that they had in their possession; and ignore any other payment instructions. (Dkt. #3524 at 31; EE-7). This last instruction was necessary because Dickson had changed CHFS's mailing address to an address in Nevada, where payments were being forwarded to Costa Rica. When the Trustee discovered what Dickson had done, she changed the address, only to have someone (perhaps a former employee of CHFS) no- tify borrowers of a new mailing address in Miami, Florida, where payments again were being forwarded to Costa Rica. (Dkt. #3524 at 53; Dkt. #3526 at 115-16, 120). In response to the Trustee's letters, JW became inundated with emails, calls, faxes, and let- ters from borrowers, closing agents, attorneys, and regulators regarding the loans. (Dkt. #3526 at

105). The volume of calls overwhelmed JW's switchboard. (Dkt. #3524 at 31). Borrowers who could not immediately reach the Trustee complained to the UST. (Dkt. #3526 at 105).

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Stay of Edwards Adversary Proceedings

After the Trustee was substituted as the named plaintiff in the Edwards Adversary Proceed- ings, she asked the Court to stay the proceedings pending stabilization of the CHFS estate. (STP- 293, -299, -301). EFP/BHT agreed to the stay. At this point, the estate had no money to litigate the Edwards Adversary Proceedings. (Dkt. #3526 at 117; Dkt. #3526 at 99). The Trustee testified that her intent from the outset of her appointment was to liquidate the estate and resolve the Ed- wards Adversary Proceedings through a liquidation plan. (Dkt. #3529 at 37-38). For the time be- ing, she focused her efforts on drafting and filing a confirmable plan of liquidation to replace the reorganization plan authorized by Dickson. (STP-86 at 62-63).

Dickson's Arrest for Bank Fraud

A criminal complaint was filed against Dickson accusing him of conspiring to wire approxi- mately $9,095,000 from the DIP Account to accounts he owned or controlled. See United States

v. Dickson, Case No. 3:14-cr-00078-TSL-FKB (S.D. Miss). He was deported to the United States on March 14, 2014. Following his arrest, the "rogue" operation in Central America ceased, alt- hough some loan records and assets remained behind in Costa Rica and Panama. During this pe- riod, the Costa Rican government initiated parallel criminal proceedings against Dickson for money laundering. (Dkt. #3524 at 126).

Loan Servicing by Trustee & JW

In the initial months of her appointment, the Trustee used professionals at JW to service the loans. JW became concerned that the firm, which was not licensed to service consumer loans, could be in violation of consumer protections laws and regulations. (Dkt. #3524 at 74; Dkt. #3526 at 118). To protect JW against any such allegation, the Trustee moved for an order grant-

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ing herself and JW interim authority to service the loans until she could retain a professional mortgage servicing company. (Dkt. #553; Dkt. #3524 at 75). The Court granted that motion on April 11, 2014. (STP-75).

Dickson TRO Case—District Court

Dr. Edwards sued Dickson and his affiliated companies (not including CHFS) in District Court (the "Dickson TRO Case") (Case No. 3:14-cv-00436-CWR-LRA) on June 3, 2014. He thought that Dickson, from his jail cell, was attempting to auction real property held for him by shell corporations.⁴⁷

Dickson Avoidance Action

One day after Dr. Edwards commenced the Dickson TRO Case, the Trustee initiated an ad- versary proceeding against Dickson, certain related companies, and insiders, seeking to equitably subordinate Dickson's indemnity claim, recover prepetition and post-petition transfers, and en- join the sale of properties owned by insiders and/or affiliates of CHFS. (Adv. 14-00030-EE) (the

"Dickson Avoidance Action"). See 11 U.S.C. § 544. "[B]y causing the Debtor and others to si- phon money away from the Estate, Dickson has engaged in inequitable conduct that has injured creditors and conferred an unfair advantage on himself." (Adv. 14-00030-EE, Dkt. #33). The Trustee's allegations in the Dickson Avoidance Action overlapped those asserted by Dr. Ed- wards in the Dickson TRO Case. The Trustee was eventually awarded a civil judgment of $52,798,480 against Dickson. (Adv. 14-00030-EE, Dkt. #301, #302).

Trustee's Hiring of Loan Servicer

By April 2014, the Trustee had obtained remote electronic access to three computer servers

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located in Panama used by CHFS to manage and service its mortgage loans. The Trustee strug- gled to find a professional mortgage servicing company to operate CHFS's business. Some com- panies, for example, were not licensed in all states where CHFS's borrowers resided. (Dkt. #3524 at 72). Others declined when they heard that CHFS's owner had been arrested for bank- ruptcy fraud. (Dkt. #3524 at 72). Her search eventually led her to ClearSpring Loan Services, Inc. ("ClearSpring"), a company that was able and willing to service the consumer loans.⁴⁸(STP-

184). It refused, however, to service loans having a $0.00 balance or missing key documents. Al- so, it would not accept responsibility for filing IRS Form 1098 Mortgage Interest Statements for the 2013 tax year. (Dkt. #3524 at 73, 75-76).

JW sent EFP/BHT's counsel a proposed servicing agreement and arranged a meeting be- tween Dr. Edwards and Alan Sercy, ClearSpring's representative. (STP-345; Dkt. #3524 at 72). The Trustee filed an application seeking approval of ClearSpring's employment. (Dkt. #618). EFP/BHT objected. (Dkt. #630). They argued that the proposed servicing agreement violated the agreement between CHFS and EFP/BHT because ClearSpring charged fees in excess of what EFP/BHT had agreed to pay CHFS. They asked the Trustee to consider a different company that charged lower fees. (Dkt. #3532 at 22). EFP/BHT also objected to ClearSpring's proposed fee for handling loans owed by borrowers in bankruptcy.⁴⁹(STP-345). EFP/BHT asked the Court to require ClearSpring, if approved as the loan servicer, to grant them real-time access by internet to all payment information on the loans. In response, ClearSpring required EFP/BHT to sign an

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indemnification agreement, which Dr. Edwards at first resisted. (STP-345 at 28; Dkt. #3532 at

22). A line-by-line review of the proposed servicing agreement by Barber, Dr. Edwards, and Alan Sercy did not resolve Dr. Edwards' concerns.

After additional negotiations, the parties reached an agreement where EFP/BHT reserved the right to pursue an administrative expense claim for the difference between CHFS's and ClearSpring's loan servicing charges⁵⁰and subjected ClearSpring's fees to a § 506 surcharge but not a "claw back" for any reason other than a violation of the terms of the servicing contract. (STP-345 at 14, 18; Dkt. #3532 at 22-23).

The electronic information on CHFS's computer servers, along with approximately 500 physical records and files created from the Trustee's contacts with borrowers, were transferred to ClearSpring, and the servicer went "live" on June 20, 2014. At that time, about 3,828 loans were

"boarded" with ClearSpring. (STP-163 at 67). When the Trustee later located another computer server in Panama with electronic information, additional loans were boarded with ClearSpring. Hiring ClearSpring was a game changer in the Bankruptcy Case—it relieved the Trustee and JW of the burdensome task of servicing the bulk of the loans and increased the estate's coffers. From June 2014 through the end of that year, ClearSpring collected over $2 million and from June 2014 through January 31, 2023, collected $21,502,493 (gross) or $16,074,464 (net). (Dkt. #3526 at 129; Dkt. #3528 at 23-24).

The Trustee's involvement with loan servicing did not completely end with ClearSpring's employment. She continued to service some loans because of inadequate information and other

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special circumstances. She remained responsible for filing IRS 1098 Mortgage Interest State- ments for the 2013 tax year, cancelling mortgages for which no assignment had been recorded, and handling all bankruptcy cases filed by CHFS's consumer borrowers. (Dkt. #3524 at 76, 78, 112; Dkt. #3526 at 126-27, 131-32; Dkt. #3532 at 25). By the time the Bankruptcy Case was closed, approximately 556 bankruptcy cases had been filed by CHFS's consumer borrowers. (Dkt. #STP-132 at 9; Dkt. #3524 at 112; Dkt. #3528 at 177; T-15).

Award of Partial Summary Judgment to EFP/BHT in Dickson Guaranty Suit

In the Dickson Guaranty Suit, the District Court granted partial summary judgment in favor of EFP/BHT on September 10, 2014. Edwards Family P'ship, LP v. Dickson, Case No. 3:13-cv- 00587-CWR-LRA, 2014 WL 4494283 (S.D. Miss. Sept. 10, 2014), Dkt. #52. The District Court found that CHFS had defaulted on the loans and that Dickson was liable on his personal guaran- ty. Id. at 4. The District Court reserved the issue as to the amount Dickson owed under the notes for later decision. In a separate order entered on August 26, 2015, the District Court awarded $6,810,958 to EFP and $20,502,031 to BHT. (STP-313).

Dickson appealed the decision to the Fifth Circuit, arguing that the summary judgment was premature because of the pending Edwards Adversary Proceedings in which he and CHFS had challenged the extent and validity of EFP/BHT's claims. Dickson posited that if CHFS's obliga- tion fell away, then his should too. On May 23, 2016, the Fifth Circuit affirmed the District Court, ruling that Dickson waived any defenses to the enforcement of the notes, and, therefore, was required to satisfy the obligations "no matter what." Edwards Family P'ship L.P. v. Dickson,

821 F.3d 614, 617 (5th Cir. 2016).

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Recovery of $6,693,838.38

From the spring of 2014 through that summer, the Trustee began collecting cash from foreign and domestic sources. By July 2014, these funds had grown to $6,693,838.38. (STP-53 at 15-16). Of the total amount recovered, $5,898,278.89 was obtained through the criminal process. (Dkt. #1282 at 9). That money had been held in different accounts at a bank in Panama in Dick- son's name or in the name of an affiliate (not CHFS). (Dkt. #3524 at 128-29). Dickson's criminal defense counsel attempted but was unable to wire transfer these funds to the Trustee because the Panamanian bank had frozen the accounts. (Dkt. #3524 at 203). JW attorney David A. Restrepo ("Restrepo") was able, through his connections, to negotiate the release of the holds on the ac- counts. (Dkt. #3524 at 129).

In addition to $5,898,278.89, the Trustee intercepted cashier checks totaling $540,000. She also received $144,191.90 as part of a settlement reached in Florida litigation involving Coastal Condos, LLC⁵¹"to cover any shortfall on the return of CHFS funds that were transferred out of the United States" and $111,367.59 in proceeds from the sale of an apartment complex in Jack- son, Mississippi. (Dkt. #800, #802).

The status of the recovered and returned funds totaling $6,693,838.38 quickly became an is- sue in the Bankruptcy Case. EFP/BHT argued that all of the money belonged to them.⁵²(Dkt. #3532 at 17-19, 57). The Trustee, on the other hand, argued that the money ($6,693,838.38) was not traceable to the loan collections in the DIP accounts stolen by Dickson ($9,095,000). (Dkt.

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#3524 at 130-31). At least some portion of the stolen funds had been withdrawn from specially designated es- crow accounts as a form of adequate protection on the loan collections. (STP-156-58). The theft legally converted these funds from cash collateral to "untraceable" money—denying EFP/BHT their adequate protection but freeing up the funds for administrative claims.

JW First Fee Application

On August 15, 2014, JW filed its First Application for Compensation for the Period of Janu- ary 2, 2014 Through July 31, 2014, and Reimbursement of Expenses by the Law Firm of Jones Walker LLP as Counsel to Kristina M. Johnson, Trustee of the Estate of Community Home Fi- nancial Services, Inc. (the "JW First Fee Application") (STP-110), seeking, on an interim basis,⁵³ fees of $733,656.50 and expenses of $67,203.53 (for a total of $800,860.03).⁵⁴ JW asserts that at this stage, the firm had represented the Trustee for seven months without being paid any fees or reimbursed any expenses. (Dkt. #3529 at 139). According to the Trustee, she had been "using Jones Walker's money to run the estate." (Dkt. #3529 at 150).

"Exhibit A" to the JW First Fee Application is JW's 703-page fee statement. (STP-110-1, 110-2). The fee statement shows that 30 attorneys, fifteen paralegals, one "practice support ana- lyst," and an unknown number of law clerks (grouped under one entry) billed 2,895 hours. The Trustee did not bill any attorney time in the JW First Fee Application but did in all subsequent applications. (Dkt. #3526 at 146-47). The hourly billing rates for the attorneys ranged from $225

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to $485, excluding Restrepo, whose rate was $750 per hour. For paralegals, the hourly billing rates ranged from $105 to $200.

EFP/BHT filed an objection on October 3, 2014.⁵⁵(STP-185). This first fee dispute between EFP/BHT and JW was far reaching. JW filed five briefs in support of its JW First Fee Applica- tion, and EFT/BHT filed four briefs challenging those fees.⁵⁶(Dkt. #820, #849, #916, #917, #973, #990, #995, #1039, #1046).

Ultimately, both the prior bankruptcy judges disallowed, on an interim basis, a portion of the fees and expenses requested by JW. JW seeks only those reduced fees and expenses approved by the second bankruptcy judge.⁵⁷(Dkt. #3525 at 161; Dkt. #3529 at 230-31). At Trial, EFP/EFT withdrew their objection to the reduced fees and expenses incurred during the period covered by the JW First Fee Application. (Dkt. #3524 at 15). Even so, EFP/BHT's objection remains rele- vant because it explains JW's adjustment of its fees and expenses in future fee applications. EFP/BHT said they were "astonished and disturbed" by the $800,860.03 amount of fees and expenses (averaging more than $100,000 per month) and the number of JW's attorneys who pro- vided services to the estate (30). (STP-279 at 7). Dr. Edwards testified at Trial that he "thought having 18 or so billing attorneys when all this business amounted to was receiving loan collec- tions was indefensible." (Dkt. #3532 at 28).

EFP/BHT disputed any time entries for Trustee-related work; all time entries for law clerks

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($6,072); hourly billing rates more than $340 for lawyers except for Restrepo's; all hourly billing rates more than $155 for paralegals; overtime pay to non-lawyer billing professionals ($3,992.75); computer-assisted legal research ("CALR") charges of $9,512.33; and long-distance charges of $3,000 to the extent they exceeded charges actually incurred. At Trial, the Trustee re- called that she was "shocked" by EFP/BHT's objection to JW's fees given that she had success- fully stabilized an estate that was in "absolute chaos" at the time she was appointed. (Dkt. #3526 at 99; STP-185; Dkt. #917, #990).

EFP/BHT's Third Cash Collateral Motion/Trustee's Cash Motion

In conjunction with their objection to the JW First Fee Application, EFP/BHT filed their third cash collateral motion asking the Court to prohibit the Trustee from using their purported cash until resolution of the Home Improvement Loan Adversary.⁵⁸(STP-187 ¶ 31; Dkt. #3532 at

50). EFP/BHT argued that "until the Court has determined if the loan collections are the collat- eral of EFP or BHT, no further estate expenses of any kind should be paid." (STP-85). Dr. Ed- wards testified that he believed that all money received by the Trustee was either EFP/BHT's cash or their cash collateral. (Dkt. #3532 at 55-57, 80). He thought that CHFS was administra- tively insolvent—that is, that the estate lacked sufficient unencumbered funds to pay for the costs of handling the estate, including attorneys' fees—and was disappointed when the Trustee (as the substituted party-plaintiff) failed to voluntarily dismiss the Edwards Adversary Proceedings and turn over all cash and assets to him.⁵⁹

The Trustee responded by filing the Trustee's Motion for Use of Cash (To the Extent Re-

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quired) Nunc Pro Tunc (the "Trustee's Cash Motion") (STP-188) seeking permission to use cash to the extent required to maintain CHFS's business operations. She characterized EFP/BHT's motion as an attempt to "strangle" the estate and prevent her from exercising her statutory duties. (STP-188). She testified that EFP/BHT's narrative in opposition to payment of any fees or ex- penses throughout the Bankruptcy Case, even before she was appointed, was that all money, re- gardless of its source, belonged to them, which she disputed. (Dkt. #3531 at 172).

First Bankruptcy Judge's Agreed First Interim Fee Order on JW First Fee Application

On October 10, 2014, the first bankruptcy judge entered an agreed interim order on the JW First Fee Application. (STP-133). A week after filing their objection, EFP/BHT agreed to the payment to JW of the following fees and expenses pursuant to § 331:

A. 70% of JW's fees for a total of $513,559.55 (70%×$733,656.50=$513,559.55); and B. 100% of JW's expenses for an undisputed total of $58,447.37 (expenses of $67,203.53 less $4,000 attributed to employee overtime and $4,756.16 attributed to fifty percent (50%) of computer-assisted legal research charges, all of which JW waived). (the "First Interim Fee Order") (STP-133 at 2). The First Interim Fee Order ⁶⁰ held back $220,096.95 (30% of JW's requested fees) subject to consideration at the end of the Bankruptcy Case.⁶¹"[A]ll rights, claims and defenses of [JW], the Trustee, the Office of United States Trus- tee, and EFP/BHT are preserved." (STP-133 at 2). On October 11, 2014, Dr. Edwards emailed Barber asking him to resolve the Edwards Adversary Proceedings and to wind the Bankruptcy

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Case down. (STP-344; Dkt. #3524 at 209-10). To Dr. Edwards' surprise, within seventeen days after entry of the First Interim Fee Order JW filed a combined reply and brief in support of the JW First Fee Application, opposing the $220,096.95 "holdback" of its requested fees. (Dkt. #849; Dkt. #3532 at 29).

Hearing on Holdback in JW First Fee Application

The hearing on JW's remaining fees ($220,096.95) was held on December 18, 2014. The is- sues before the first bankruptcy judge were: (1) whether JW sought compensation for work that fell under the Trustee's statutory compensation under § 326; (2) lawyers' hourly billing rates above $340, excluding Restrepo's;⁶²(3) paralegals' hourly billing rates above $155; (4) fees for law clerks of $6,072; and (5) certain expenses. On October 27, 2015, the first bankruptcy judge issued a 61-page opinion reducing some fees and expenses and awarding JW additional fees, as discussed later. (STP-159).

Trustee's First Investigative Report

On December 17, 2014, the Trustee filed her first investigative report. (STP-53); 11 U.S.C. § 1106(a)(4). She disclosed her intent to file a disclosure statement and liquidation plan resolving the Edwards Adversary Proceedings. (STP-53). She also revealed that CHFS had transferred ap- proximately $3.2 million to Dickson and his affiliated companies in the months before the bank- ruptcy filing. CHFS had identified these transactions as "loans," but the Trustee's investigation revealed they were fraudulent transfers. (Dkt. #3529 at 44).

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Trustee's Original Disclosure Statement & Liquidation Plan (February 9, 2015)⁶³ Before the parties finished their post-hearing briefing on the JW First Fee Application, the Trustee filed the Disclosure Statement for the Chapter 11 Plan of Liquidation of the Estate of Community Home Financial Services, Inc. Proposed by the Trustee, Kristina M. Johnson Dated as of February 9, 2015 (the "Original Disclosure Statement") (STP-190) and Chapter 11 Plan of Liquidation of the Estate of Community Home Financial Services, Inc. Proposed by the Trustee, Kristina M. Johnson Dated as of February 9, 2015 (the "Original Plan") (STP-191); see 11 U.S.C. § 1106(a)(5). She divided all claims against the estate, except for administrative claims, into seven classes and placed EFP/BHT's claims into "Class 1 Claims (EFP/BHT Secured Claims)." (STP-191 ¶ 4.1); 11 U.S.C. § 1122. She assigned any loan owned by CHFS to EFP/BHT "in satisfaction of EFP/BHT Secured Claims." Before transferring the loans, she re- quired EFP/BHT to indemnify all estate professionals from any claim related to the loans. (STP- 191 ¶ 5.1). The value of the loans assigned to EFP/BHT, according to the bankruptcy schedules filed by Dickson, was $42,534,267. The Trustee believed that the loans retained sufficient value after Dickson's theft to constitute the "indubitable equivalent" of EFP/BHT's secured claims. (STP-171 at 4). The transfer would occur on or before the effective date of the Original Plan. At this stage of the Bankruptcy Case, the estate's operating account had grown to about $8.5 million, $2.2 million of which were loan payments collected by ClearSpring. The Trustee pro- posed to transfer all that money, except for $250,000, to a newly formed "Liquidation Trust."

(STP-191 ¶ 5.2; Dkt. #3529 at 183-84).

The purpose of the Liquidation Trust, according to Barber, was to fund the Trustee's contin-

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ued efforts to investigate and recover assets in Latin America. (Dkt. #3524 at 223). According to the Trustee, its purpose was to fund litigation against Dickson. (Dkt. #3528 at 51; Dkt. #3529 at 183-84). She proposed to appoint herself as the trustee of the Liquidation Trust and bill her ser- vices at $375 per hour.⁶⁴Money from the Liquidation Trust would be used to pay her fees and expenses and unsecured creditors' claims (not including EFP/BHT's). After three years, any ex- cess funds in the Liquidation Trust would be transferred to EFP/BHT. (Dkt. #3529 at 184-88). The Trustee proposed to use the remaining $250,000 carved out from the Liquidation Trust to create a "Litigation Claims Account" to pay claims liquidated by the "Liquidation Trust Trus- tee" after the effective date. Monies left over after payment of all claims would revert to the Liq- uidation Trust. (STP-190 at 23, 29; STP-191 ¶ 5.1).

The Trustee would dismiss the Edwards Adversary Proceedings without any final adjudica- tion of the status and validity of EFP/BHT's claims. The Trustee asked the Court to approve the Original Disclosure Statement and confirmation procedures. (Dkt. #966). On March 12, 2015, EFP/BHT objected to the Original Disclosure Statement. (Dkt. #994). They thought the Original Plan effectively treated them like unsecured creditors by allowing the Trustee to pay administrative claims (including JW's fees and expenses) using their cash collat- eral without their consent. They complained that the Original Plan dismissed the Edwards Ad- versary Proceedings without addressing EFP/BHT's rights to the Trustee's collected funds. (STP-192 at 3). They reiterated their argument that all funds collected by the Trustee belonged to them, that the estate was administratively insolvent, and that the Trustee was trying to avoid the resolution of their status as secured creditors. They questioned the collectability, and thus the

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value, of the underlying loans and disagreed that the transfer of the loans would satisfy their se- cured claims. (STP-85 at 15; Dkt. #3532 at 30-31). They also questioned why the Trustee failed to mention the cash collections on the loans, which they viewed as the "bird in the hand." (Dkt. #3529 at 198; Dkt. #3532 at 30). They objected to any indemnification agreement. (Dkt. #3532 at 31). The Original Plan was not confirmed for reasons discussed below.

Dr. Edwards' Efforts to Recover Dickson's Assets in Costa Rica

Dickson's arrest purportedly left Meehan, his business partner in Costa Rica, without suffi- cient funds to continue operations. Neither Dr. Edwards nor the Trustee knew Meehan or his in- volvement with Dickson until much later. Of the two, Meehan contacted Dr. Edwards first, after he came across the Dickson Guaranty Action while browsing the internet. (Dkt. #3532 at 34; Dkt. #1017-1). He called Dr. Edwards on September 11, 2014. (Dkt. #1017-1 at 5). Meehan introduced himself as the owner of the call center in Costa Rica, complained that Dickson owed him money, and said that he was desperate for cash. (Dkt. #3532 at 34). This tele- phone call was unsolicited. Dr. Edwards told Meehan he was Dickson's former business partner and asked for his help locating the missing Portfolio #7 loans and any of Dickson's privately- owned assets. Meehan indicated that he might know where Dickson had stored the missing Port- folio #7 loans in Costa Rica. (Dkt. #3532 at 34).

Dr. Edwards scheduled a meeting with Meehan in early December 2014, during a time he had already planned to travel to Costa Rica on other business. (Dkt. #3532 at 34-35). Dr. Ed- wards traveled to Costa Rica alone. Neither his daughter Borg nor his son James Edwards ac- companied him on this trip. (Dkt. #3532 at 39).

Once in Costa Rica, Dr. Edwards showed Meehan the partial summary judgment entered by

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the District Court in the Dickson Guaranty Action as proof of his legal claim to Dickson's as- sets.⁶⁵Dr. Edwards toured the call center used by Dickson in his rogue operations, and Meehan showed him the computers used to service the loans. (Dkt. #3532 at 35). Dr. Edwards did not attempt to access the computers and did not take any computers or other property with him when he returned to Baltimore. (Dkt. #3532 at 35).

In the following months, Dr. Edwards maintained contact with Meehan by email. At Dr. Ed- wards' request, Meehan mailed him a compact disc ("CD") containing the hard drive of a com- puter in the call center used by a former CHFS employee. (Dkt. #3532 at 36-37). Dr. Edwards testified that the CD consisted of photographs of the employee and her friends, documents re- garding Dickson's formation of the Warren Foundation, the Warren Foundation's account at a bank in Panama, Dickson's purchase of a condominium in Costa Rica, loans that Dickson made in Costa Rica, and loans owned by CHFS that had been paid-off. (Dkt. #3532 at 37). According to Dr. Edwards, the CD "had no new loan information" that he or the Trustee did not already have. (Dkt. #3532 at 37).

Trustee's First Fee Application

On February 20, 2015, the Trustee's First Application for Interim Compensation as the Chap- ter 11 Trustee of Community Home Financial Services, Inc. (the "Trustee's First Fee Applica- tion") (STP-8) was filed seeking interim compensation of $68,905.75 for the period from Janu- ary 16, 2014 through December 31, 2014. The Trustee calculated her fees pursuant to the § 326 cap based on a percentage of the funds she disbursed to parties in interest. Those disbursements

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totaled $1,521,858.30. "Exhibit A" is the calculation of her compensation. The Trustee kept track of the time she expended rendering her services but did not attach any billing records. Instead,

"[t]his statement of time expended can be provided upon request to the Trustee." She provides a

"lodestar amount" and Johnson analysis of $428,230 based on her attorney hourly rate of $340. (T-1). The Trustee did not seek reimbursement of any expenses. All expenses were sought in JW's interim fee applications. None of the Trustee's fee applications shows work performed by anyone other than the Trustee. (T-2). EFP/BHT objected to the use of their cash collateral to pay the Trustee any fees. (Dkt. #999). They also objected to any "double-dipping" by the Trustee and JW. The Trustee's First Fee Application was later supplemented to include the months from Jan- uary 1, 2015 to June 30, 2015 as explained below. (STP-9).

Trustee's Contact with Meehan Regarding CD

In February 2015, nearly five months after he first spoke with Dr. Edwards, Meehan contact- ed Barber. (Dkt. #3524 at 123). He told Barber the location of CHFS's computers in Costa Rica and revealed that he had given a CD to Dr. Edwards. According to the Trustee, the CD contained information about 2,000 loans, two bank accounts, over $1,500,000 in loans purchased in Costa Rica, the names of two CHFS affiliates, and the Costa Rican government's seizure of $587,749.95 from Dickson's bank accounts—all information that she testified was valuable and previously unknown to her. (Dkt. #3528 at 57). Meehan also revealed that he had met with Dr. Edwards in Costa Rica. Despite her ongoing communications with Dr. Edwards and his counsel during this time, Dr. Edwards never mentioned his meeting with Meehan or the CD. (Dkt. #3528 at 56; STP-344).

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Trustee's Response to Dr. Edwards' Recovery Efforts

The Trustee testified that she "was blown away" by Dr. Edwards' conduct. (Dkt. #3528 at

53). On February 20, 2015, the Trustee filed an application to employ Facio & Cañas to assist her in locating assets in Costa Rica traceable to the estate and in enforcing orders and judgments there. (Dkt. #983, Dkt. #1004). On March 18, 2015, she filed the Trustee's Second Statement of Investigation and Report ("Trustee's Second Report") (STP-54), describing Meehan's role in Dickson's rogue operation in Costa Rica. She attached emails between Meehan and Dr. Edwards that showed that Dr. Edwards had paid Meehan $1,000 for the CD.

In response to the Trustee's report, Dr. Edwards' counsel gave a copy of the CD to the U.S. Attorney in Jackson. (Dkt. #3524 at 237). The Trustee, in turn, obtained a copy from "federal authorities." (Dkt. #3529 at 218).

At this point, the Trustee could have simply asked EFP/BHT's counsel for a copy of the CD. She didn't.⁶⁶(Dkt. #3528 at 75-77). She also could have filed a garden variety motion for turno- ver in the Bankruptcy Case and/or initiated an adversary proceeding against Dr. Edwards for his alleged violation of the automatic stay. Instead, she took the following highly accelerant measures on April 7, 2015:

1. sued Dr. Edwards, and his adult children, Borg and James Edwards, in District Court for violating the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962(c);

2. moved the District Court to withdraw the reference of the entire Bankruptcy Case and Edwards Adversary Proceedings (Dkt. #1026); and

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3. withdrew the Original Disclosure Statement and Plan and on May 15, 2015, filed an amended disclosure statement and plan that subordinated EFP/BHT's claims from "Class

1 Claims (EFP/BHT Secured Claims)" to "Class 6 (EFP/BHT Claim)" (the "Penalty Plan") (Dkt. #1022).

At some point during this time, the Trustee also apparently referred Dr. Edwards to the U.S. At- torney for criminal investigation. She testified that she had a duty under 18 U.S.C. § 3057 to re- port any violation of 18 U.S.C. § 152 as she previously had done when she became aware of Dickson's criminal actions. (Dkt. #3528 at 73-74). Dr. Edwards testified that that no one from the U.S. Attorney's Office ever contacted him. (Dkt. #3532 at 38).

Given these extreme measures and the serious accusations against EFP/BHT, Dr. Edwards, and his family, EFP/EFT claim that beginning in mid-March 2015 the Trustee and JW had aban- doned their fiduciary duties and focused their attention on pursuing Dr. Edwards to the detriment of the estate.⁶⁷(STP-279 at 27-28). They argue that the compensation requested by the Trustee and JW after March 2015 "was incurred in their 8-year long pursuit to defeat or subordinate the Edwards Entities' claims and thus elevate the payment priority of estate professionals (them- selves) above the interests of the Edwards Entities." (STP-279 at 2; Dkt. #3529 at 212-13). They oppose the payment of any compensation to the Trustee and JW for services performed from March 2015 to November 16, 2023 on the ground their work did not benefit the estate.⁶⁸ EFP/EFT calculate the amount billed for services rendered after March 2015 to be $4,249,596 in fees and $290,249.60 in expenses.⁶⁹(STP-279 at 2). EFP/EFT's argument requires the Court to review the Trustee's actions after March 2015 in some detail.

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Trustee's RICO Case Against EFP/BHT, Dr. Edwards & His Adult Children

On April 7, 2015, the Trustee filed a 369-page complaint, including exhibits, against EFP/BHT, Dr. Edwards, his son James R. Edwards, and his daughter Borg in District Court (the

"RICO Complaint"), seeking damages under the RICO Act and the automatic stay under § 362, the equitable subordination of EFP/BHT's claims under § 510(c),⁷⁰and the turnover of estate property under § 542(a) (the "RICO Case"). See Johnson v. Edwards Family P'ship, LP, Case No. 3:15-cv-00260-CWR-LRA (S.D. Miss. 2015); (STP-314). The predicate for the Trustee's RICO actions against all defendants was Dr. Edwards' trip to Costa Rica—a trip he took unac- companied by his children.

In support of the RICO count in her complaint, the Trustee alleged that Dr. Edwards and his adult children "sought to knowingly and fraudulently conceal from the Trustee property belong- ing to the Estate [of CHFS], such as Costa Rican assets and loans purchased with money from the Estate [of CHFS] in violation of court orders, bankruptcy law, and 18 U.S.C. § 152(1) (con- cealment of property)." (Case No. 3:15-cv-00260-CWR-LRA, Dkt. #1). She included James Ed- wards and Borg as defendants because she viewed them as Dr. Edwards' "business partners" and because her RICO claim required proof of a "criminal enterprise." (Dkt. #3528 at 71); 18 U.S.C. § 1961. In the RICO statement attached to the complaint, the Trustee alleged that the defendants had violated 18 U.S.C. § 152 (bankruptcy fraud), 18 U.S.C. § 1341 (mail fraud), 18 U.S.C. § 1343 (wire fraud), and 18 U.S.C. § 1512 (witness tampering). The Trustee had never previous- ly filed a RICO case but "felt that it was necessary to shut [the rogue operation] down immedi- ately." (Dkt. #3528 at 71).

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Dr. Edwards testified that he was "absolutely" surprised by the RICO Complaint and consid- ered the allegations "absurd." (Dkt. #3532 at 33, 38). He immediately stopped trying to locate any of Dickson's assets. EFP/EFT question whether the Trustee and JW engaged in a cost- benefit analysis before filing the RICO Complaint given that any damages awarded the Trustee would ultimately be returned to them as CHFS's largest creditors.

Trustee's Motions to Withdraw the Reference of the Entire Bankruptcy Case, Intervene & Consolidate

The Trustee testified that she believed that she "needed to get out of this Court" because the Bankruptcy Case "wasn't going anywhere." (Dkt. #3528 at 75-76). For that reason, she filed five motions asking the District Court to withdraw the reference in the entire Bankruptcy Case or, alternatively, to withdraw only certain adversary proceedings and contested matters and then to consolidate them with other pending District Court cases into two new parallel District Court cases. See 28 U.S.C. § 157(d); (STP-194; 12-00091-EE, Dkt. #156; 12-00109-EE, Dkt. #77; 13- 00104-EE, Dkt. #26; 14-00030-EE, Dkt. #90; Dkt. #3528 at 55-56, 60).⁷¹Specifically, the Trus- tee asked the District Court to withdraw the following adversary proceedings and contested mat- ters: Edwards Adversary Proceedings; Dickson Avoidance Action; cash collateral and related contested matters; EFP/BHT's POC 4-1 through 9-1; and Dickson's proof of claim (Claim 10-1). The Trustee then asked the District Court to consolidate the Dickson TRO Case (initiated by Dr. Edwards) and the Dickson Avoidance Action into one case, and the Dickson Guaranty Suit (initiated by Dr. Edwards); RICO Case; Edwards Adversary Proceedings; cash collateral matters; and EFP/BHT's POC 4-1 through 4-9 into a second case. The Trustee and JW saw these circum-

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stances as an opportunity to "get everything under one roof" and "a very efficient way of han- dling all of the related litigation." (Dkt. #3524 at 233). The first bankruptcy judge placed the Bankruptcy Case "on hold" pending a ruling by the District Court on the Trustee's withdrawal motions. (STP-159 at 11).

Trustee's First Amended Disclosure Statement & Liquidation Plan Subordinating EFT/BHT's Claims (May 15, 2015) (the "Penalty Plan")

On April 7, 2015, at the beginning of the hearing on the Original Disclosure Statement (which had been filed only two months earlier), the Trustee announced her withdrawal of the Original Plan. (STP-193). Her announcement rendered the hearing moot. At Trial, the Trustee testified that she worked quickly to file a new disclosure statement and plan to "soften" the blow and signal to Dr. Edwards that they were not at "war." (Dkt. #3528 at 60). A month later, on May 15, 2015, she filed the First Amended Disclosure Statement for the Chapter 11 Plan of Liquidation of the Estate of Community Home Financial Services, Inc. Pro- posed by the Trustee, Kristina M. Johnson Dated as of May 15, 2015 (the "Trustee's First Amended Disclosure Statement") (STP-205) and First Amended Chapter 11 Plan of Liquidation of the Estate of Community Home Financial Services, Inc. Proposed by the Trustee, Kristina M. Johnson Dated as of May 15, 2015 (the "Penalty Plan") (STP-206).⁷²The parties dispute the ex- tent to which the treatment of EFP/BHT's claims in the Penalty Plan, as modified, differs from the Original Plan.

In the Penalty Plan, the Trustee downgraded EFP/BHT's claims from secured Class 1 in the Original Plan to unsecured Class 6.⁷³She placed EFP/BHT behind all other unsecured creditors,

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except Dickson—CHFS's owner who stole over $9 million from the estate. She proposed to satisfy EFP/BHT's claims as follows: (a) assign to EFP/BHT all loans held by CHFS; (b) transfer the REO Property and all other real and personal property except as oth- erwise provided; and (c) convey all remaining cash to EFP/BHT not otherwise provided for with- in 45 days of the effective date, less $500,000 for payment of post-confirmation administrative claims. Again, she required EFP/BHT to indemnify the Trustee and all estate professionals. In comparison to the Original Plan, the Penalty Plan increased the previously proposed Liti- gation Claims Account from $250,000 to $500,000. (Dkt. #3529 at 200). The Litigation Claims Account doubled in size, according to the Trustee, because of a decision in another jurisdiction holding that loan servicing debtors (like CHFS) must separately notify each individual borrower of the bar date for filing a proof of claim.⁷⁴(Dkt. #3531 at 158). The Trustee expressly retained any bankruptcy causes of action and litigation claims for one year, at the end of which the Trus- tee would assign any unresolved causes of actions and claims to EFP/BHT and would distribute all remaining cash to EFP/BHT. Also, the Trustee proposed to dismiss the Edwards Adversary Proceedings and the RICO Case.

EFP/BHT objected to the Trustee's First Amended Disclosure Statement. (STP-208). They asserted that the Trustee structured the Penalty Plan to "punish" them because of Dr. Edwards' actions in Costa Rica. They disagreed with the Trustee's proposal to give EFP/BHT all assets after paying all other claims because they believed the money being used to pay administrative expenses belonged to them or was their cash collateral that could not be spent without their con- collateral—and unsecured creditors are paid only after administrative claimants. 11 U.S.C. § 1129.

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sent. They complained that confirmation of any plan was premature until resolution of the Ed- wards Adversary Proceedings. In their objection, they explained:

Consistent with EFP and BHT's position in the case for nearly three years, the District Court recognized that the threshold issues in this bankruptcy case raised in the adversary proceedings must be addressed to move this bankruptcy case forward—namely (1) EFP and BHT's status as secured creditors, AP 12-91, and (2) the estate's interest, if any, in the joint venture portfolios, AP 12-00109. The Trustee blinded by her conflict of interest has so far refused to address these determinative proceedings in which she is the plaintiff. (STP-208 ¶ 10).

The parties resolved EFP/BHT's objection by inserting the following language in an agreed order approving the Trustee's First Amended Disclosure Statement:

EFP and BHT contend that the first amended disclosure statement is premature and im- proper because it fails to disclose that no plan can be approved until the threshold materi- al issues of the Edwards entities' status as secured creditors and interest in the joint ven- ture portfolios are resolved. The Trustee disagrees with their contentions and asserts such issues may be addressed as part of the confirmation process.

(STP-160). The confirmation hearing on the Penalty Plan was set for March 23, 2017 but was later reset at EFP/BHT's request for December 7, 2017.

Supplemental Reply to EFP/BHT's Response to Trustee's Cash Motion & Supplemental Objection to EFP/BHT's Third Cash Collateral Motion

The Trustee filed the Trustee's Supplemental Reply to Edwards Family Partnership, LP and Beher Holdings Trust's Response to Trustee's Motion for Use of Cash Collateral (to the Extent Required) Nunc Pro Tunc (Dkt. #1023) and the Trustee's Supplemental Objection to Edwards Family Partnership, LP and Beher Holdings Trust's Third Motion to Prohibit Use of Cash Col- lateral Until the Court Rules in Adversary Proceeding 12-00091 (Dkt. #1024) on April 7, 2015. In both pleadings, the Trustee alleged that EFP/BHT had "willfully violated the automatic stay by, among other things, exercising possession and control over property of the Estate located in

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Costa Rica" and that "it would be inequitable to [allow] EFP/BHT to strangle the Trustee of cash when they were engaged in conduct that increased the estate's administrative expenses." (Dkt. #1023, Dkt. #1024); 11 U.S.C. § 362(a). She indicated that she intended to file "various plead- ings and actions . . . seeking to determine whether [EFP/BHT] should be stripped of any rights they may have previously had in the Estate's cash." (Dkt. #1023, Dkt. #1024).

Resumption of Edwards Adversary Proceedings

After her appointment, the Trustee dismissed CHFS's appeal (initiated under Dickson's aus- pices) of the Court's refusal to extend the automatic stay to Dickson, a non-debtor. The District Court then returned the Bankruptcy Case to the Court, which sua sponte terminated the stay in the Home Improvements Loan Adversary. (Adv. 12-00091-EE, Dkt. #12). Because the Trustee wanted to consolidate the Edwards Adversary Proceedings (Dkt. #3529 at 266), she asked the Court to vacate the stays in the two remaining Edwards Adversary Pro- ceedings, the Mortgage Portfolios Adversary and 12-00109-EE. (EE-23, 24). At this point, the Trustee was unwilling to treat all cash in the estate as EFP/BHT's property or as their traceable collateral. (Dkt. #3531 at 172).

District Court's Denial of Trustee's Withdrawal Motions As Untimely

On June 29, 2015, the District Court denied the Trustee's withdrawal motions as having been untimely, writing that "[a]s well-intentioned as the plan is . . . the undersigned thinks withdrawal and reorganization is neither required under the law nor the most efficient way to move all in- volved toward resolution." (Case No. 3:15-cv-316-CWR-LRA, Dkt. #4).

Dismissal of RICO Count & Initiation of Adversary Proceeding 15-00080-EE

Dr. Edwards testified that the filing of the RICO Complaint "was a complete shock." (Dkt.

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#3532 at 33). EFP/BHT, Dr. Edwards, and the other defendants moved to dismiss the RICO Case. The District Court denied the motion, ruling that the complaint, if amended, "would likely have a chance of surviving the motion standard." (Case No. 3:15-cv-00260-CWR-LRA, Dkt. #27). In its order, the District Court characterized the Trustee's claim that the estate was harmed by Dr. Edwards' actions as "weak" and her claim against Dr. Edwards' children as "thin." (Case No. 3:15-cv-00260-CWR-LRA, Dkt. #27). The District Court instructed the Trustee to amend her complaint but stayed the filing of any amended complaint until the parties had an opportunity to confer with the Magistrate Judge to discuss settlement.

After meeting with the Magistrate Judge, the Trustee agreed to dismiss the RICO count with- out prejudice (Case No. 3:15-cv-00260-CWR-LRA, Dkt. #28), and the parties proceeded to me- diate their dispute. Mediation proved unsuccessful. In an agreed order entered on December 10, 2015, the District Court referred the (former) RICO Case to the Court where it became adversary proceeding 15-00080-EE (the "Post-Petition Conduct Adversary"). The new adversary sought damages for EFP/BHT's alleged stay violation and conversion of estate property, and asked the Court to equitably subordinate their claims.⁷⁵

Supplement to Trustee's First Fee Application

On August 21, 2015, the Supplement to Trustee's First Application for Interim Compensa- tion as the Chapter 11 Trustee of Community Home Financial Services, Inc. (the "Supplement to Trustee's First Fee Application") (STP-9) was filed seeking compensation for the period from

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January 1, 2015 through June 30, 2015 of $19,750.50. No order had yet been entered on the Trustee's First Fee Application, which covered the period from January 16, 2014 through De- cember 31, 2014. In the Trustee's First Fee Application, the Trustee requested $68,905.74 in fees under § 326. That compensation and the fees sought in the Supplement to Trustee's First Fee Application amount to total compensation of $88,656.25 for work performed from January 2014 through June 2015. Again, she did not attach a fee statement but stated, "This statement of time expended can be provided upon request to the Trustee." (T-1). "Exhibit A" is the calculation of her compensation based on disbursements totaling $658,349.93. EFP/BHT objected, but only to the extent the Supplement to Trustee's First Fee Application sought to limit their pending objec- tion to JW's fee application. (Dkt. #1158). The Court entered interim orders approving both the Trustee's First Fee Application and the Supplement to Trustee's First Fee Application in the total amount of $88,633 based on the § 326 cap.⁷⁶(STP-31, -32).

JW Second Fee Application

On August 26, 2015, JW filed the Second Application for Compensation for the Period of August 1, 2014 Through June 30, 2015, and Reimbursement of Expenses by the Law Firm of Jones Walker LLP as Counsel to Kristina M. Johnson, Trustee of the Estate of Community Home Financial Services, Inc. (the "JW Second Fee Application") (Dkt. #1148), seeking interim fees of $938,397.50 and interim expenses of $67,943.88 (for a total of $1,006,341.38). "Exhibit A" to the JW Second Fee Application is JW's 684-page fee statement. (Dkt. #1148-1, #1148-2, #1148-3). The fee statement shows that twenty-three attorneys and nine paralegals billed 4,090.50 hours. The total compensation reflects reductions of $93,947 in fees and $436.62 in ex-

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penses incurred defending the JW First Fee Application, which were not compensable under § 330 pursuant to Baker Botts, L.L.P. v. ASARCO LLC, 576 U.S. 121 (2015).⁷⁷According to the JW Second Fee Application, these amounts also reflected voluntary reductions of $83,993.60 in fees and expenses "[i]n the exercise of prudent billing judgment." (Dkt. #1148 at 18-19). On September 25, 2015, EFP/BHT filed the Edwards Family Partnership, L.P. and Beher Holdings Trust's Objection to Fee Application. (Dkt. #1178).

Dickson's Guilty Plea & Restitution Order

On September 10, 2015, Dickson pleaded guilty to two counts of bankruptcy fraud in viola- tion of 18 U.S.C. § 152. See United States v. Dickson, Case No. 3:14-CR-00078-TSL-FSB (S.D. Miss.) (Dkt. #44). Certain property in Costa Rica was the subject of a criminal forfeiture order, and the Trustee was awarded a judgment of $5,442,004.58 in restitution. Id. Dkt. #83. Dickson served a 57-month sentence in a federal penitentiary and was released on May 3, 2018.

First Bankruptcy Judge's Second Interim Fee Order on JW First Fee Application

On October 27, 2015, the first bankruptcy judge entered a 61-page opinion (the "Second In- terim Fee Order") (STP-159) on the JW First Fee Application. This Second Interim Fee Order resolved on an interim basis all fees and expenses requested in the JW First Fee Application. In the First Interim Fee Order, the parties agreed to a 70% interim award of JW's fees.⁷⁸(STP-133). In the Second Interim Fee Order, the first bankruptcy judge awarded JW interim fees of $678,526 and expenses of $55,603.55.⁷⁹

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The award reflected total reductions in fees of $55,130.50 and expenses of $11,599.98. The $55,130.50 reduction in fees was the result of caps the first bankruptcy judge placed on hourly billing rates and the disallowance of "block billing" charges. The first bankruptcy judge capped billing rates for professionals at $350 an hour and for non-professionals at $125 an hour. The Court disallowed $6,072 in fees because the charges listed were for one block billing entry,

"LAW CLERKS, NO," with only a vague, general description as to what duties the law clerks performed or even the number of law clerks who performed the work. The first bankruptcy judge also found that the JW First Fee Application contained many time entries billed by JW for performing the statutory duties of the Trustee. Although the Bankruptcy Code does not generally allow a court to award compensation to a law firm for performing duties

"that are generally performed by a trustee without the assistance of an attorney," the Court ruled that exceptional or unique circumstances existed at the time the Trustee was appointed to warrant compensation—CHFS had no employees and only about $7,500 in its DIP Account, and CHFS's owner was engaged in ongoing criminal activity. 11 U.S.C. § 328(b). The Court allowed JW to be compensated for assisting the Trustee with carrying out her statutory duties during this chal- lenging period but made it clear that it was "not finding that such exceptional and unique circum- stances will remain in existence for the entire tenure of the Trustee's appointment." (STP-159 at

41). The Court suggested that once the Trustee hired a loan servicer, JW would no longer have to assist the Trustee in operating CHFS's entire loan servicing business and those exceptional cir- cumstances that existed at the time of the Trustee's appointment would disappear. The Court de- ferred addressing EFP/BHT's position that the estate was paying double compensation until JW awarded in the First Interim Fee Order. The amounts awarded in the First and Second Interim Fee Orders were re- adjudicated by the second bankruptcy judge, as discussed later.

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and the Trustee filed their final fee applications. (STP-161 at 7-8). The reduction in expenses of $11,599.98 was for the disallowance of overtime, long-distance charges, and one-half of the CALR charges.⁸⁰

First Bankruptcy Judge's Orders Granting Henderson's & Wells Marble's Fees

On December 7, 2015 and January 27, 2016, the Court issued separate decisions on Hender- son's and Wells Marble's fee applications. (STP-81, 83). The Court found that the services that Henderson and Wells Marble had provided litigating the Edwards Adversary Proceedings were necessary because EFP/BHT's status as a secured creditor would impact the provisions of any plan of reorganization. JW and the Trustee rely on this finding to show that their "Edwards- pursuit" fees were likewise necessary. (Dkt. #3525 at 150-51). EFP/BHT appealed both deci- sions. (Case No. 3:15-cv-00915). The Trustee did not participate in the District Court appeal but was listed as a party in interest. (Dkt. #3530 at 272).

JW Amended Second Fee Application

In response to the Second Interim Fee Order, JW reduced the fees sought in the JW Second Fee Application and on December 18, 2015 filed the JW Amended Second Application for Compensation for the Period of August 1, 2014 through June 30, 2015, and Reimbursement of Expenses by the Law Firm of Jones Walker LLP as Counsel to Kristina M. Johnson, Trustee of the Estate of Community Home Financial Services, Inc. (the "JW Amended Second Fee Applica- tion") (STP-111), seeking interim fees of $895,274 and interim expenses of $67,943.88 (for a revised total of $963,217.88 compared to $1,006,341.38). The reduction results from lower hour- ly billing rates. "Exhibit A" to the JW Amended Second Fee Application is JW's 774-page fee

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statement. (STP-111-1). Sixteen attorneys, six paralegals, and one "Practice Support Analyst"

performed services during this period. Attorneys billed an hourly rate ranging from $144.05 to $348.60, excluding one attorney, Restrepo, who billed $750 per hour.⁸¹(Dkt. #1243-1 at 384). Paralegals billed no more than $125 per hour.

During this period, JW represented the Trustee in on-going issues related to the operation of CHFS's business. These services included interviewing witnesses in Costa Rica, conducting a Rule 2004 examination of Dickson, retrieving computers from Costa Rica, and meeting with of- ficials at the U.S. Embassy in Costa Rica regarding the release of government-seized assets. EFP/BHT filed the Edwards Family Partnership, LP and Beher Holdings Trust's Supple- mental Objection to Amended Second Application for Compensation for the Period of August 1, 2014 through June 30, 2015 and Reimbursement of Expenses of the Law Firm of Jones Walker, LLP as Counsel to Kristina M. Johnson, Trustee of the Estate of Community Home Financial Services, Inc. (the "JW Amended Second Fee Objection") (Dkt. #1257).⁸²The parties filed post- trial briefs on JW's Amended Second Fee Application. (Dkt. #1303; Dkt. #1336; STP-85).

Second Fee Hearing on JW Amended Second Fee Application

A hearing was held on the JW Amended Second Fee Application on January 21, 2016 (the

"Second Fee Hearing") (STP-84). EFP/BHT argued at the Second Fee Hearing that time entries totaling $244,000.50 constituted dual compensation or "double-dipping," that is, time entries for work that fell under the Trustee's duties for which she received separate compensation. EFP/BHT further objected to $279,680.50 in time entries that it asserted were for services that

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did not benefit the estate. At the Second Fee Hearing, JW agreed to reduce its fees by $87.50 to correct a typographical error and to reduce its expenses by $31,177.82, consisting of $29,952.81 in CALR charges and $1,225.01 in long-distance telephone charges. (STP-84 at 22).

Trustee's Amendment of Complaint in Home Improvement Loans Adversary (12-00091)

EFP/BHT's renewed motion to dismiss the complaint filed by CHFS and Dickson in Adver- sary Proceeding 12-00091-EE was granted with prejudice as to Dickson's claims against them and without prejudice as to the Trustee's claims. (STP-295). The Trustee was instructed to amend the complaint as to the estate's claims by January 15, 2016. (STP-295). A comparison between the Trustee's amended complaint (Adv. 12-00091-EE Dkt. #237) and the complaint authorized by Dickson (Adv. 12-00091-EE, Dkt. #48) shows that some of the counts are similar. For example, the first count in both complaints alleges that the loans to ac- quire the Home Improvement Loans are invalid because The Rainbow Group, Ltd. was purport- edly not a validly existing BVI corporation. There are more differences than similarities between the two complaints. The Trustee's amended complaint, for example, contains only six counts whereas Dickson's lists thirteen. Unlike Dickson's complaint, the Trustee's amended complaint does not include Dickson's claims against EFP/BHT for breach of fiduciary duty, breach of good faith and fair dealing, and intentional interference with business relations. Also, the Trustee's amended complaint includes two counts that Dickson's did not, that the EFP/BHT notes are fraudulent and that EFP/BHT lack any security interest in non-traceable cash recovered by the estate. (STP-292, -296; Dkt. #3529 at 281-82).

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Trustee's Amendment of Complaint in Post-Petition Conduct Adversary (15-00080)

In the Post-Petition Conduct Adversary, the Trustee filed an amended complaint against EFP/BHT and Dr. Edwards predicated on the CD obtained from Meehan. (Adv. 15-00080-EE, Dkt. #48). The Trustee sought a judgment: declaring that the defendants had violated the auto- matic stay; requiring the defendants to turn over all estate property pursuant to § 542(a); award- ing damages for their conspiracy to convert estate property and conversion of estate property; and subordinating their claims below all others except Dickson's pursuant to § 510(c).

JW Third Fee Application

On July 8, 2016, before the Court's ruling on the JW Amended Second Fee Application, JW filed the Jones Walker Third Application for Compensation for the Period of July 1, 2015 Through February 29, 2016, and Reimbursement of Expenses by the Law Firm of Jones Walker, LLP as Counsel to Kristina M. Johnson, Trustee of the Estate of Community Home Financial Services, Inc. (the "JW Third Fee Application") (STP-112), seeking interim fees of $557,647 and interim expenses of $12,580.88 (for a total of $570,227.88). "Exhibit A" to the JW Third Fee Application is JW's 357-page fee statement. (STP-112-1). This amount reflects capped attor- neys' fees at $350 per hour and non-attorney rates at $125 per hour, a reduction of $35,000 in fees, and a reduction in expenses for long-distance and CALR charges. This amount also reflects a reduction of approximately $65,000 for fees associated with JW's defense of the JW Amended Second Fee Application pursuant to ASARCO.⁸³JW, however, did not remove fees associated with its defense of the Trustee's fee application, which it considered compensable.⁸⁴Sixteen at-

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torneys, four paralegals, and one "practice support analyst" billed for services performed during this time. The attorneys' hourly billing rate ranged from $125 to $350. All paralegals billed at an hourly rate of $125 as did the "practice support analyst."

JW assisted the Trustee in opposing EFP/BHT's motion to dismiss the Home Improvement Loans Adversary, amending the complaint in the Home Improvement Loans Adversary, amend- ing the complaint in the Post-Petition Conduct Adversary after the dismissal of the RICO claim, participating in mediation, and researching lien-strip issues in consumer bankruptcy cases in the light of Bank of America, N.A. v. Caulkett, 575 U.S. 790 (2015).

On August 3, 2016, EFP/BHT filed the Edwards Family Partnership, L.P. and Beher Hold- ings Trust's Objection to Third Application for Compensation for the Period of July 1, 2015, Through February 29, 2016, and Reimbursement of Expenses of the Law Firm of Jones Walker LLP as Counsel to Kristina M. Johnson, Trustee of the Estate of Community Home Financial Services, Inc. (Dkt. #1417). They objected on numerous grounds.⁸⁵

EFP/BHT faulted the Trustee for not "pursuing a simple, direct path to resolution of CHFS's bankruptcy to benefit its creditors—namely the Edwards Parties." (Dkt. #1417 at 3). They ob- jected to any compensation paid to JW for time expended on the Edwards Adversary Proceed- ings. They also argued that the JW Third Fee Application contained numerous time entries for Trustee-related work billed by legal professionals. "It was and is the trustee's choice how to staff the debtor's loan servicing business[,] . . . but [s]he cannot . . . delegate the operation of the busi- ness to professionals and then seek to have them paid as professionals rather out of the trustee statutory compensation." (Dkt. #1417 at 5). They also claimed that the time expended by one at-

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torney for handling chapter 13 bankruptcy cases filed by borrowers at fees of $135,170 was ex- cessive. (Dkt. #1417 at 6). They questioned billing entries by "Practice Support Analyst." They found some entries by paralegals who billed for filing documents and performing routine search- es using the Public Access to Court Electronic Records ("PACER") service, which they believed constituted overhead. They argued that expenses for copying costs also were overhead items that should not be billed to the estate.

Trustee's Second Fee Application

On July 8, 2016, the Trustee's Second Application for Interim Compensation as the Chapter

11 Trustee of Community Home Financial Services, Inc. (the "Trustee's Second Fee Applica- tion") (STP-10) was filed seeking compensation for the period from July 1, 2015 through Febru- ary 29, 2016 of $32,412.88 based on disbursements, as shown in "Exhibit A." The Trustee did not attach any invoices to her application but maintained that she had spent 760.30 hours per- forming services. (T-2). For 546.70 of those hours, her attorney hourly rate was $350, and for the remaining 213.60 hours, her attorney hourly rate was increased to $375. She offered to provide a fee statement upon request. EFP/BHT sought and obtained a copy of the invoices and filed a lim- ited objection. (Dkt. #1418). EFP/BHT did not object to any other interim fee application filed by the Trustee until 2022. An interim order was entered granting the Trustee's Second Fee Ap- plication based on the § 326 cap. (Dkt. #1484).

Order Denying Trustee's and JW's Joint Motion to Transfer Fee Disputes to Another Bankruptcy Judge

At a preliminary hearing on the JW Third Fee Application and the Trustee Second Applica- tion, the first bankruptcy judge indicated that he intended to push litigation of the Home Im-

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provement Loans Adversary forward, ahead of EFT/BHT's objections to these fee applications. (Dkt. #3529 at 109; Dkt. ##1421-1422). That adversary would determine whether EFP/BHT were secured creditors which, in turn, would resolve all cash collateral issues raised by EFP/BHT regarding the payment of attorneys' fees. Apparently unwilling to wait for the first bankruptcy judge to adjudicate the Edwards Adversary Proceedings, JW and the Trustee jointly moved to transfer the JW Amended Second Fee Application and the Trustee's First Fee Application to a different bankruptcy judge with a "less congested docket" (the "Motion to Transfer Fee Dis- putes") (STP-211). They did not ask the Court to transfer any other matters (such as the critical cash collateral motions),⁸⁶and they requested the transfer even though the Court had already held a hearing on both the JW Amended Second Fee Application and the Trustee's First Fee Ap- plication and had set a hearing on the JW Third Fee Application for September 22, 2016.⁸⁷ The first bankruptcy judge promptly denied the Motion to Transfer Fee Disputes, noting that

"instead of moving the case forward, the Trustee and [JW] are more interested in litigating [JW's] fees and the Trustee's compensation." (STP-212). He concluded that deferring the fee disputes would achieve an orderly administration of the estate and allow him to manage the Court's trial calendar more efficiently.⁸⁸

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Third Fee Hearing on JW Third Fee Application

The hearing on the JW Third Fee Application was held as scheduled on September 22, 2016 (the "Third Fee Hearing") (STP-86). At the Third Fee Hearing, JW voluntarily agreed to reduce its paralegal fees by $6,058 (Dkt. #1588 at 3; STP-86 at 4, 8, 20) based on concerns raised in- formally by the UST that time expended for downloading and filing pleadings electronically constituted non-compensable overhead. JW further agreed to reduce its expenses by $1,797.20, representing copying costs and charges for PACER services. (STP-86 at 9). At the Third Fee Hearing, EFP/BHT objected to: (1) $42,075 as impermissible dual compensation or "double- dipping"; (2) $205,568.50 related to the Edwards Adversary Proceedings and the RICO Case; (3) $23,885 incurred for JW's defense of its and the Trustee's fee applications; and (4) $24,825 for PACER charges and copying costs. Of the requested $557,647, EFP/BHT objected to time en- tries totaling $296,353.50. During the Third Fee Hearing, EFP/BHT added objections to time entries totaling $600 of "Practice Support Analysts" for work performed by JW's information technology department and to the time entries of Edward J. Ashton ("Ashton") for research re- garding Caulkett as being excessive. (Dkt. #1545 at 7).

Briefs were filed after the hearing on the JW Third Fee Application. (Dkt. #1545; Dkt. #1588; Dkt. #1621). With the reductions announced at the Third Fee Hearing, JW sought $551,589 in interim fees and $10,783.68 in interim expenses. (Dkt. #1498 at 4, 9).

Immediate Payment Order on JW Amended Second & Third Fee Applications

At the hearings on the JW Amended Second and Third Fee Applications, EFP/BHT intro- duced into evidence a highlighted copy of JW's invoices that marked the entries in dispute. On November 22, 2016, before interim orders were entered on the JW Amended Second and Third

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Fee Applications, JW filed the Motion for Order Directing Immediate, Interim Payment of Fees in Second and Third Fee Applications in an Amount Not Less Than Amounts Not Objected to on a Line-Item Basis [Dkt. Nos. 1243 and 1400] (STP-87), asking the Court to approve immediate payment of all fees that EFP/BHT had not questioned. (STP-89). EFP/BHT objected, arguing that no unencumbered funds were available to pay JW its fees and they were entitled to a re- placement lien on all stolen funds collected by the Trustee. (Dkt. #1533). In an order entered on December 16, 2016, the first bankruptcy judge granted JW interim compensation of $628,037 and authorized the Trustee to pay these funds immediately (the "Im- mediate Payment Order") (STP-135-36). This amount represented compensation for which there was no objection by EFP/BHT in the JW Amended Second Fee Application of $331,680.50 and in the JW Third Fee Application of $296,356.50. The Court found that "at this point in time, $2,364,871.49 the Trustee recovered from the Panamanian bank account and the two bank checks is unencumbered." (STP-135-36 at 14). The Court thus allowed the Trustee to Pay JW immediately, on an interim basis, $628,037.⁸⁹That amount plus the $734,129.55 awarded on the JW First Fee Application totaled $1,362,166.55 in interim compensation paid JW. (EE-11). EFP/BHT moved to reconsider on December 30, 2016, arguing, inter alia, that the payment of compensation to JW constituted an improper surcharge on its collateral in violation of § 506 in the absence of evidence that the firm's actions benefited them. (Dkt. #1555). On January 18, 2017, the Court denied the motion to reconsider, finding that EFP/BHT could have made the same arguments before entry of the Immediate Payment Order and otherwise finding no manifest

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error of law or fact. (STP-88).

Dr. Edwards' Purchase of Claims

Except for EFP/BHT, Logan held the largest claim against the estate.⁹⁰(Dkt. #3532 at 47). The total of all other non-Edwards claims was significantly less than Logan's breach-of-contract claim. The District Court, in an order entered months later vacating the fee awards to Henderson and Wells Marble, noted "[I]t would have been more cost-effective, faster, and better for the es- tate to pay off the few unsecured creditors rather than hire professionals to litigate Adversary Proceedings quibbling about their priority." Edwards Family P'ship, LP v. Johnson, 3:18-CV- 158-CWR-LRA, 2020 WL 4506788, at *1 (S.D. Miss. Aug. 5, 2020), rev'd, 990 F.3d 422 (5th Cir. 2021). Dr. Edwards purchased Logan's $100,000 claim. (STP-213). This reduced the amount of non-Edwards claims to approximately $70,000. (Dkt. #3525 at 49; STP-335 at 2). Dr. Edwards later purchased other claims as well.

Reassignment to Second Bankruptcy Judge

On February 1, 2017, the Bankruptcy Case and all related adversary proceedings were reas- signed to the second bankruptcy judge, and the confirmation hearing was cancelled.⁹¹(STP-217).

Administrative Consolidation of Claims in Adversary Proceeding 12-00109 & Mortgage Portfolios Adversary

The second bankruptcy judge issued an order consolidating for trial purposes the claims as-

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serted by the Trustee against EFP/BHT in adversary proceeding 12-00109-NPO ⁹²

with her claims against EFP/BHT in the Mortgage Portfolios Adversary and similarly consolidating the claims asserted by Dickson in the Mortgage Portfolios Adversary with those claims alleged by him in adversary proceeding 12-00109-NPO. (Adv. 12-00109-NPO, Dkt. #111; Adv. 12-00091- NPO, Dkt. #285). The purpose of the consolidation was to group all claims asserted by Dickson against EFP/BHT into adversary proceeding 12-00109-NPO and all claims asserted by the Trus- tee against EFP/BHT into adversary proceeding 13-00104-NPO. After the consolidation, the Trustee filed an amended complaint in the Mortgage Portfolios Adversary (Adv. 13-00104-NPO, Dkt. #61). All personal claims asserted by Dickson were later dismissed without prejudice in those proceedings.

Second Bankruptcy Judge's Rehearing on JW First, Amended Second & Third Fee Applications

After a status conference, the second bankruptcy judge entered an order setting a re-hearing on February 27, 2017 of JW's interim fee applications covering the period from January 2, 2014, through February 29, 2016. (Dkt. #1666). In that order, the Court indicated its intent to revisit all interim fee orders entered by the first bankruptcy judge. Evangeline, 890 F.2d at 1322 (holding that interim orders may be revised by second bankruptcy judge). The Court entered a cumulative interim fee order adjusting the previous interim fee awards on May 3, 2017. (STP-91).

Administrative Consolidation of Claims in Home Improvement Loans Adversary & Mortgage Portfolios Adversary

On March 2, 2017, the Court consolidated for trial purposes all claims asserted by the Trus- tee in the Home Improvement Loans Adversary with those asserted in the Mortgage Portfolios

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Adversary against EFP/BHT, Dr. Edwards, and James Edward, as well as certain contested mat- ters in the Bankruptcy Case. (Adv. 12-00091-NPO, Dkt. #285; STP-302).

Confirmation Hearing on Penalty Plan

The confirmation hearing on the Penalty Plan was held on December 7, 2017.⁹³One day be- fore that hearing, the Supreme Court issued its decision in Czyzewski v. Jevic Holding Corp., 580 U.S. 451 (2017), holding that distributions in chapter 11 cases must follow the Bankruptcy Code's priority rules absent the consent of affected creditors. The Trustee testified that without EFP/BHT's consent, Jevic rendered the Penalty Plan unconfirmable. (Dkt. #3528 at 103-04). In his opening statement at the confirmation hearing, Trustee's counsel asserted that confir- mation of the Penalty Plan would preclude having to untangle EFP/BHT's claims, which he de- scribed as a "Gordian knot." Counsel for EFP/BHT, in contrast, stated that the confirmation hearing was premature and asked the Court to delay the hearing until resolution of the Edwards Adversary Proceedings. (Dkt. #3525 at 140-41).

Your Honor, would it take property that we claim an interest in and use it to pay other claims without us having the right to at least try to prove our interest in those funds? That is a taking, and we're entitled to a hearing before those funds are used to pay the adminis- trative expense claims. As the Court knows, typically, the bankruptcy estate's administra- tive expenses are paid from the non-encumbered assets of the estate. Now, there are ex- ceptions where the Court can surcharge certain collateral in certain circumstances. But typically, you can't use encumbered funds to pay unsecured creditors, . . . which is what this plan does. And that's why it subordinates us.

So, Your Honor, I don't know how they can go forward with this. But you can't force somebody to settle that doesn't want to settle. And that's what they're trying to do. And we recognize the Court's ruling when Your Honor said that these issues on the 12-91, 13- 104, 15-80 had to be tried. That's why we pulled back on our motion to convert because it seemed to us to be premature to go forward with that until the court has decided one way or the other. Court's rulings on that make a whole lot of difference about whether

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any of this, whether where we end up at the end of the day, but we're entitled to that, Your Honor. We've been trying to get that now for five years. (STP-90 at 28-29). EFP/BHT opposed any plan that paid any administrative expenses because they believed that all cash in the Trustee's possession either belonged to them or constituted their cash collateral. (STP-85) ("[A]ll of the cash available to pay any estate expenses is EFP/BHT's cash collateral."). The status of the cash collected by the Trustee and ClearSpring was a main issue in the Home Improvement Loans Adversary and the Mortgage Portfolios Adversary. The Court granted EFP/BHT's request to delay confirmation:

[I]t's clear that the issue we have is one of risk shifting and the Fifth Circuit is one of the jurisdictions that allows asset payment plans and that's a way of disposing of a secured claim. And the only way that the Court will approve those is if you meet that indubitable equivalent standard. But the problem I have with the trustee's [indubitable equivalent] argument is we're skipping a whole bunch of steps to get to that point and my first reac- tion when I read all the pleadings was this may very well be premature. And after I've heard all the arguments, and the arguments were very helpful, now I'm convinced this is premature. (STP-90 at 44-45).

Trustee's Amendment of Complaint in Mortgage Portfolios Adversary (13-00104)

On March 6, 2017, the Trustee, consistent with the Court's consolidation orders, filed an amended complaint in the Mortgage Portfolios Adversary, consolidating the claims and parties from adversary proceeding 12-00109-NPO into the Mortgage Portfolios Adversary.⁹⁴(Adv. 13- 00104-NPO, Dkt. #61).

The Trustee pleaded causes of action under nine counts in the amended complaint. She al- leged that CHFS had not received all distributions and reimbursements owed under their written agreements and/or Mississippi's Uniform Partnership Act, M ISS. CODE ANN. § 79-13-1201 et seq. The Trustee sought a declaratory judgment regarding the rights and obligations of the parties

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as to the Mortgage Portfolios. EFP/BHT, Dr. Edwards, and James Edwards filed an answer denying the relief requested by the Trustee and asserting numerous affirmative defenses, including statute of limitations, waiver, and estoppel. (Adv. 13-00104-NPO, Dkt. #70 at 2-3). They also asserted a counterclaim, seeking a judgment declaring that: (1) they owned the notes and mortgages that comprise the Mortgage Portfolios; (2) the Mortgage Portfolios were not property of the estate; and (3) CHFS's only in- terests in the Mortgage Portfolios were servicing fees of $20 or $15 and 25% of the net proceeds after the repayment of EFP/BHT's investment (which had not yet occurred). (Adv. 13-00104- NPO, Dkt. #70 at 20-25). EFP/BHT asked the Court to find that Portfolios #3-6 were governed by the same written agreements that governed Portfolios #1-2. EFP/BHT sought damages against the estate for CHFS's alleged breach of the Mortgage Portfolios agreements and its fiduciary du- ties. EFP/BHT also sought damages to the extent the fees charged by ClearSpring exceeded the amount they agreed to pay CHFS. They sought a judgment awarding them 65.7% of the funds recovered ($5,918,279) or $3,888,309.30.⁹⁵EFP/BHT also sought a judgment requiring the Trus- tee to return any proceeds from the Mortgage Portfolios used to pay expenses of the estate.

EFP/BHT's Answer & Counterclaim in Home Improvement Loans Adversary (12-00091)

On March 20, 2017, EFP/BHT filed an answer to the complaint in the Home Improvement Loans Adversary denying that the Trustee was entitled to any relief and asserting numerous af- firmative defenses, including statute of limitations, waiver and/or estoppel, and lack of standing. (Adv. 12-00091-NPO, Dkt. #289 at 2, 17). In Count I of their counterclaim, they sought a declar-

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atory judgment that their claims are secured with a first lien on all loans. (Adv. 12-00091-NPO, Dkt. #289 at 21-22). In Count II of their counterclaim, they sought a judgment awarding them 34.3% of the funds recovered ($5,918,279) or $2,029,969.60.⁹⁶(Adv. 12-00091-NPO, Dkt. #289 at 22-23).

Trustee's Retention of Panamanian Counsel

The Trustee obtained permission from the Court, over EFP/BHT's objections, to employ the law firm of Arias, Fábrega & Fábrega ("ARIFA"), nunc pro tunc to March 27, 2017, to initiate judicial proceedings in Panama to obtain bank records from Banco Panameño. (STP-284 at 27- 28; STP-92). EFP/BHT opposed the employment, describing ARIFA as the "Mercedes-Benz of law firms in Panama" and insisting that the Trustee should retain a firm that charged lower hour- ly rates. The Court overruled EFP/BHT's objection and approved the employment. (STP-94 at 11-12).

Adversary Proceeding 12-00109-NPO (Dickson's Claims)

Dickson failed to file an amended complaint in adversary proceeding 12-00109-NPO by March 6, 2017, the deadline set in the Court's consolidation order. The Court issued an order (Adv. 12-00109-NPO, Dkt. #125) on June 9, 2017, requiring Dickson to show cause why the ad- versary proceeding should not be dismissed. Dickson did not respond or appear at the show cause hearing. On July 19, 2017, the Court entered an order dismissing the adversary. (Adv. 12- 00109-NPO, Dkt. #129). No appeal was taken, and the order became final.

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Second Bankruptcy Judge's Cumulative Interim Fee Order on JW First, Amended Second & Third Fee Applications

On May 3, 2017, the second bankruptcy judge entered an order re-adjudicating the prior in- terim fee orders entered on the JW First Fee Application, Amended Second, and Third Fee Ap- plications (the "Cumulative Interim Fee Order") (STP-91). In his ruling, the second bankruptcy judge removed the first bankruptcy judge's $350 cap on attorney's fees and increased the $125 cap on legal assistant's fees to $155. He also warned JW that in future fee applications, hours billed for non-working travel time may be reduced by half. Caplin & Drysdale Chartered v. Babcock & Wilcox Co. (In re Babcock & Wilcox Co.), 526 F.3d 824, 828 (5th Cir. 2008). As to expenses, the second bankruptcy judge (as did the first bankruptcy judge) adopted the test an- nounced in Fibermark, 349 B.R. at 399, for allowing reimbursement of CALR charges. The table

below reflects the total interim fees and expenses awarded in the Cumulative Interim Fee Order:

Fee Application Interim Fees Interim Expenses

JW First $707,230.00 $55,603.55

JW Am. Second $859,207.00 $36,766.06

JW Third $547,719.00 $10,783.68

TOTAL $2,114,156.00 $103,153.29

(STP-91). In the JW Final Fee Application, JW seeks these fees and expenses, as determined and adjusted by the second bankruptcy judge in the Cumulative Interim Fee Order, rather than the greater amounts requested in the JW First, Amended Second, and Third Fee Applications or the lesser amounts awarded by the first bankruptcy judge. (Dkt. #3525 at 161-62).

Dismissals in Mortgage Portfolios Adversary

On June 7, 2017, the Trustee moved to dismiss certain claims against Dr. Edwards and all claims against his son James Edwards. (Adv. 13-00104-NPO, Dkt. #86). These claims had been initiated by CHFS, through Dickson, and the Trustee, with JW's assistance, determined that they

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were not worth pursuing any further. (Dkt. #3525 at 165-66). The Court granted both motions. (Adv. 13-00104-NPO, Dkt. #96, #97).

Trustee's Third Fee Application

On June 16, 2017, the Trustee's Third Application for Interim Compensation as the Chapter

11 Trustee of Community Home Financial Services, Inc. (the "Trustee's Third Fee Application") (STP-11) was filed seeking compensation for the period from March 1, 2016 through May 21, 2017 of $82,972.82. "Exhibit A" shows the calculation based on disbursements. Unlike the Trus- tee's First, Second, and Supplement to Second Fee Applications, the Trustee's Third Fee Appli- cation includes a 61-page fee statement marked as "Exhibit B." No objection was filed, and an interim order was entered granting the Trustee's Third Fee Application based on the § 326 cap. (STP-34).

JW Fourth Fee Application

On June 30, 2017, JW filed the Fourth Interim Application for Compensation for the Period of March 1, 2016, Through February 28, 2017, and Reimbursement of Expenses by the Law Firm of Jones Walker LLP as Counsel to Kristina M. Johnson, Trustee of the Estate of Commu- nity Home Financial Services, Inc. (the "JW Fourth Fee Application") (STP-113), seeking inter- im fees of $539,919.30 and interim expenses of $14,985.41 (for a total of $554,904.71). "Exhibit A" to the JW Fourth Fee Application is JW's 432-page fee statement. (STP-113-1). Sixteen at- torneys and five paralegals performed services during this period. The attorneys' hourly rates ranged from $265 to $450,⁹⁷and the paralegals' hourly rates ranged from $135 to $155. JW's

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services included prosecuting the Dickson Avoidance Action, drafting a chapter 11 plan of liqui- dation, and defending EFP/BHT's motion to convert the Bankruptcy Case to chapter 7. No ob- jection was filed, and an interim order was entered. (STP-137).

JW Fifth Fee Application

On August 29, 2017, JW filed the Fifth Interim Application for Compensation for the Period of March 1, 2017, Through June 30, 2017, and Reimbursement of Expenses by the Law Firm of Jones Walker LLP as Counsel to Kristina M. Johnson, Trustee of the Estate of Community Home Financial Services, Inc. (the "JW Fifth Fee Application") (STP-114), seeking interim fees of $434,846 and interim expenses of $53,258.74 (for a total of $488,104.74). From this point forward almost all interim fee applications filed by JW covered four months of work. "Exhibit A" to the JW Fifth Fee Application is JW's 288-page fee statement. (STP-114-1). Ten attorneys, eight paralegals, an unknown number of law clerks, and a "practice support group" performed work during these four months. The attorneys' hourly rates ranged from $240 to $475, and the paralegals' hourly rates ranged from $130 to $155. This period involved some of the same issues addressed in prior applications but the focus shifted more toward the litigation of the Edwards Adversary Proceedings and confirmation of the Penalty Plan. JW deposed Dr. Edwards, James Edwards and Borg in Washington, D.C. during this time period. No objection was filed, and an interim ordered was entered. (STP-138).

Joint Pre-Trial Order in Edwards Adversary Proceedings

The second bankruptcy judge set the consolidated trial of the Home Improvement Loans Ad- versary (Adv. 12-00091), the Mortgage Portfolios Adversary (Adv. 13-00104), and the Post- Petition Conduct Adversary (Adv. 15-00080) to begin on October 30, 2017 and set a deadline of

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September 1, 2017 for submission of a joint pretrial order. In preparation for the adversary trial, the Trustee sought the Court's authority to hire Aucoin, a forensic accountant with Horne, LLP. EFP/BHT objected because they believed his rates were too high and his services would dupli- cate those provided by the estate's accountant. The Court approved Aucoin's application, noting that forensic work differed from the services provided by the estate's accountant and the Trustee could not confirm a plan without determining the debt owed EFP/BHT, the validity of that debt, and the extent it was secured. (STP-93).

As framed in the pre-trial order, the Trustee asked the Court to determine the nature of the transactions between the parties. The questions she raised included: Were the loans to purchase the Home Improvement Loans valid and subject to EFP/BHT's security interest? Should EFP/BHT's claims be equitably subordinated? As to the Mortgage Portfolios, did CHFS enter into joint ventures? loan agreements? or something else? (Dkt. #3530 at 180).

District Court's Ruling on Henderson's & Wells Marble's Fees—First Appeal

On September 11, 2017, the District Court issued separate decisions on EFP/BHT's appeals of the first bankruptcy judge's fee awards to Henderson and Wells Marble. See Edwards Family P'ship, LP v. Wells Marble & Hurst, PLLC (In re Cmty. Home Fin. Servs., Inc., Case No. 3:16- cv-0085-CWR-LRA (S.D. Miss.); Edwards Family P'ship, LP v. Henderson (In re Cmty. Home Fin. Servs., Inc.), Case No. 3:15-cv-00915-CWR-LRA (S.D. Miss.). The District Court affirmed the award to Henderson for the time he spent opposing the appointment of a chapter 11 trustee and proposing an ultimately unsuccessful plan of reorganization. (STP-323). It remanded both appeals to the Court to make additional findings explaining how the Edwards Adversary Pro- ceedings benefitted the estate. "At least from this vantage point, the record testimony and brief-

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ing suggest that the benefits to the estate were illusory because any recovery from the Edwards Entities would be returned right back to the Edwards Entities, only now, with hundreds of thou- sands of dollars having been lost to the estate' attorneys and experts." (STP-323).

Trustee's Fourth Fee Application

On October 16, 2017, the Trustee's Fourth Application for Interim Compensation as the Chapter 11 Trustee of Community Home Financial Services, Inc. (the "Trustee's Fourth Fee Ap- plication") (STP-12) was filed seeking compensation for the period from June 1, 2017 through September 30, 2017 of $41,587.32. No objection was filed, and an interim order granting the Trustee's Fourth Fee Application was entered based on the § 326 cap. (STP-35).

Trial of the Edwards Adversary Proceedings

A consolidated trial of the Edwards Adversary Proceedings and five related contested matters took place on October 30-31 and November 1-2, 27, 2017. EFP/EFT question why the Trustee pressed forward with this trial given the District Court's remarks challenging whether the Ed- wards Adversary Proceedings benefitted the estate. (Dkt. #3530 at 279). The trial raised issues requiring the interpretation of the laws of Costa Rica, Bermuda, and the British Virgin Islands. Four JW attorneys represented the Trustee at the trial—Barber, Mark Mintz ("Mintz"), Johnson, and an associate, Stephanie McLarty ("McLarty"). The following witnesses testified: the Trus- tee; Aucoin (forensic accountant); Alan Sercy (ClearSpring's representative); Jeffrey Albert Kirk (BVI attorney for the Trustee); McCarley (custodian of the Home Improvement Loans); Dr. Ed- wards; his daughter Borg; and William Richard Hare (BVI attorney for EFP/BHT). The parties stipulated to the admissibility of 114 exhibits before trial and introduced twenty additional exhib- its into evidence during trial. The Trustee described this trial as occurring during the "peak" of

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the contentiousness between the parties. (Dkt. #3528 at 107-08).

JW Sixth Fee Application

On November 17, 2017, JW filed the Sixth Interim Application for Compensation for the Pe- riod of July 1, 2017, Through October 31, 2017, and Reimbursement of Expenses by the Law Firm of Jones Walker LLP as Counsel to Kristina M. Johnson, Trustee of the Estate of Commu- nity Home Financial Services, Inc. (the "JW Sixth Fee Application") (STP-115), seeking interim fees of $426,565 and interim expenses of $21,477.02 (for a total of $448,042.02). "Exhibit A" to the JW Sixth Fee Application is JW's 278-page fee statement. (STP-115-1). Twelve attorneys and four paralegals performed work during these four months. The attorneys' hourly rates ranged from $240 to $500, and the paralegals' hourly rate was $155. JW's services included conducting expert discovery, preparing for trial, and attending the first part of the trial of the Edwards Ad- versary Proceedings. No objection was filed, and an interim order was entered. (STP-139).

Trial of Dickson Avoidance Action

The trial of the Dickson Avoidance Action began shortly after the Edwards Adversary Pro- ceedings trial ended. (Adv. 14-00030-NPO, Dkt. #301). Neither Dickson nor an attorney acting on his behalf appeared at the trial. The Trustee introduced into evidence 46 exhibits. Two wit- nesses testified, the Trustee and a former CHFS employee.

The issues tried were: (a) whether Dickson violated RICO; (b) whether Dickson and his affil- iated companies tortiously interfered with a contract; (c) whether Dickson's pre-petition transfers should be avoided under § 548(a)(1)(A); (d) whether Dickson's post-petition transfers should be avoided under § 549 and § 550; (e) whether Dickson and his affiliated companies should be or- dered to turn over CHFS's property; (f) whether Dickson violated the automatic stay; (g) whether

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Dickson converted property of CHFS's estate; (h) whether Dickson's proof of claim should be equitably subordinated below all other unsecured creditors; and (i) whether Dickson conspired to defraud the estate.

Trustee's Fifth Fee Application

On February 13, 2018, the Trustee's Fifth Application for Interim Compensation as the Chapter 11 Trustee of Community Home Financial Services, Inc. (the "Trustee's Fifth Fee Ap- plication") (STP-13) was filed seeking compensation for the period from October 1, 2017 through January 31, 2018 of $36,441.42. No objection was filed, and an interim order granting the Trustee's Fifth Fee Application was entered based on the § 326 cap. (STP-36).

Court's Opinions & Order Released on February 27, 2018

On February 27, 2018, the second bankruptcy judge released: a global opinion resolving the Edwards Adversary Proceedings (Adv. 12-00091-NPO; Adv. 13-00104-NPO; Adv. 15-00080- NPO); an opinion resolving the Dickson Avoidance Action; and an opinion addressing Hender- son's and Wells Marble's fee disputes remanded by the District Court. The Court also entered an order establishing plan confirmation procedures.

Global Opinion

In the Edwards Adversary Proceeding, the Court issued the Memorandum Opinion and Order on Third Amended Complaint in Adversary Proceeding 12-00091-NPO; Consolidated Amended Complaint in Adversary Proceeding 13-00104-NPO; Amended Complaint for Turnover, Recov- ery of Property Transferred Post-Petition, Damages, Declaratory Relief, Equitable Subordina- tion, and Other Relief in Adversary Proceeding 15-00080-NPO; and Consolidated Contested Matters (the "Global Opinion") (STP-163) and Final Judgment (Dkt. #2183); see Johnson v. Ed-

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wards Family P'ship, LP (In re Cmty. Home Fin. Servs., Inc.), 583 B.R. 1 (Bankr. S.D. Miss.

2018).

As to the Home Improvement Loans Adversary and related contested matters, the second bankruptcy judge found that: (1) EFP/BHT did not have a perfected security interest and were general unsecured creditors of the bankruptcy estate; (2) EFP/BHT did not have a security inter- est in any of the funds recovered or intercepted by the Trustee; (3) BHT held a claim against the estate of $13,374,372 as of May 23, 2012; and (4) EFP held a claim against the estate of $4,458,124 as of May 23, 2012. On appeal, as discussed later, the District Court and Fifth Circuit reversed the Court's ruling that EFP/BHT were unsecured creditors but affirmed the Court's oth- er findings, including that EFP/BHT had failed to trace the funds recovered by the Trustee to their cash collateral.

As to the Mortgage Portfolios Adversary and related contested matters in the Bankruptcy Case, the second bankruptcy judge declared that the transactions between CHFS and EFP as to Portfolios #1-6 were loans, not "joint ventures." The loans from EFP to purchase Portfolios #1-2 were enforceable, and EFP held a secured claim totaling $1,728,804 as of May 23, 2012 with respect to Portfolios #1-2. The loans from EFP to purchase Portfolios #3-6 were unenforceable under Mississippi's Statute of Frauds, MISS. CODE ANN. § 15-3-1(d). CHFS, not EFP, owned the original notes and mortgages that comprised Portfolios #1-6; BHT owned the notes and mort- gages that comprised Portfolio #7. BHT was not a creditor of the estate but was entitled to the turnover of its property; and CHFS was entitled to the servicing fees and reimbursement of costs under their written agreement as to Portfolio #7. On appeal, the Fifth Circuit affirmed these rul-

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ings. The Trustee later sent BHT's counsel a check for $1,587,754 representing ClearSpring's loan collections traceable to Portfolio #7. (Dkt. #3528 at 122). BHT never cashed that check. The Court dismissed with prejudice EFP/BHT's counterclaims against CHFS for its alleged breach of the "joint venture" agreements and its fiduciary duty. The Court also dismissed with prejudice EFP/BHT's counterclaim against the Trustee for the difference in servicing costs charged by ClearSpring and CHFS.

As to the cash collateral matters, the Court held that the proceeds from the Home Improve- ment Loans and Portfolios #3-6 and the untraceable funds recovered by the Trustee were not cash collateral and were available for use by the Trustee to pay ordinary expenses of the bank- ruptcy estate. Given the availability of these funds, the Court did not rule on the Trustee's alter- native request to use cash collateral to pay estate expenses but agreed to set a later cash collateral hearing if necessary to address that issue.

As to the Post-Petition Conduct Adversary (based on Dr. Edwards' trip to Costa Rica), the second bankruptcy judge dismissed with prejudice the Trustee's claims for equitable subordina- tion, post-petition transfers, and civil conspiracy and ruled in the Trustee's favor on her claims for violation of the automatic stay and conversion. He awarded damages against Dr. Edwards and EFP/BHT, jointly and severally, for violation of the automatic stay in the amounts of $10,000 (representing additional servicing costs) and $61,458.25 (representing attorneys' fees and expenses incurred by the Trustee through July 31, 2017.) Also, the second bankruptcy judge awarded the Trustee an additional $10,000 for conversion of the CD. On appeal, the award for violating the stay was remanded for further findings and the damages for conversion were re-

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versed by the District Court and Fifth Circuit. Both appellate courts found no conversion under state law.

Trial Opinion—Dickson Avoidance Action

In the Dickson Avoidance Action, the Court gave collateral estoppel effect to the facts under- lying Dickson's guilty plea. (Adv. 14-00030-NPO, Dkt. #301). The Court equitably subordinated Dickson's claim as to all other creditor's claims in the Bankruptcy Case. The Court found that Dickson had violated the RICO Act and awarded the Trustee treble damages of $40,456,476. The Court also awarded the Trustee $6,900,000 in pre-petition transfers and $5,442,004.58 in post-petition transfers. The award against Dickson and his affiliated companies totaled $52,798,480.

Remand Opinion—Henderson's & Wells Marble's Fees

In its remand opinion, the second bankruptcy judge agreed with the first bankruptcy judge, finding that Henderson's and Wells Marble's pursuit of the Edwards Adversary Proceedings re- sulted in a tangible and material benefit to the estate. (STP-95). The Court noted that profession- als perform many critical functions in the course of a chapter 11 case that do not directly result in an increase in assets but that are nevertheless required by law. Turning to EFP/BHT's argument that the Edwards Adversary Proceedings did not benefit the estate because all assets would have to be paid to the "Edwards Entities" anyway, the Court noted that EFP/BHT were separate enti- ties and the Trustee acted appropriately by not treating them as alter egos. Regardless, EFP/BHT themselves had demanded that the Court try the Edwards Adversary Proceedings before proceed- ing with confirmation of any liquidation plan. The Court emphasized that absent EFP/BHT's consent, litigation of the Edwards Adversary Proceedings was necessary "to create a clear path

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for an exit strategy" in the Bankruptcy Case. In its opinion, the Court noted that the Trustee held no position on the fees issue and would abide by the Court's decision. (STP-95; Dkt. #3530 at

277). EFP/BHT appealed the remand opinion. The Fifth Circuit affirmed.

Confirmation Procedures Order

Addressing certain procedural matters, the Court entered an order rescinding the order ap- proving the Trustee's First Amended Disclosure Statement, disapproving the Trustee's First Amended Disclosure Statement, and denying without prejudice confirmation of the Penalty Plan. (Dkt. #2186). The order set a status conference for the purpose of scheduling dates for the filing of an amended disclosure statement and amended chapter 11 plan.

Appeal of Global Opinion, Second Amended Plan (June 1, 2018) & Stay of Execution of Portions of Global Opinion

EFP/BHT appealed the Global Opinion and Final Judgment. (EE-29). They asked the Court to stay execution of portions of the Final Judgment pending their appeal to the District Court. (STP-225). The second bankruptcy judge denied the stay on April 26, 2018. (STP-227). EFP/BHT filed a second request for a stay with the District Court. While that motion was pend- ing, the Trustee filed the Second Amended Chapter 11 Plan of Liquidation of the Estate of Community Home Financial Services, Inc. Proposed by the Trustee, Kristina M. Johnson Dated as of June 1, 2018 (the "Second Amended Plan") (STP-228) on the deadline set by the Court. (Dkt. #2260). EFP/EFT question the Trustee's billing judgment to proceed with confirmation of a plan given their pending request for a stay. (Dkt. #3531 at 20). The Second Amended Plan proposed to sell the loans owned by the estate and pay ClearSpring its contractual termination (or deboarding) fee of $82,000. It also proposed to pay

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administrative claims. At that time, JW's fees had jumped to about $4.1 million. (EE-28; Dkt. #3531 at 26-27). The Trustee proposed to set aside $500,000 for post-confirmation professionals' fees. She gave EFP the notes underlying Portfolios #1-2 in full satisfaction of its secured claim in Class 3. (STP-228 at 17; Dkt. #3531 at 33). She placed EFP/BHT's unsecured claims in Class 5. (STP-228 at 17-18). She assigned the restitution judgment to EFP/BHT and proposed to sell Portfolios #3-6.

On June 19, 2018, the District Court issued a temporary stay for 30 days, a second temporary stay for another 30 days, and then a permanent stay pending appeal on August 27, 2018. (Case No. 3:18-cv-00154-CWR-LGI, Dkt. #20, #24, #27; STP-325). The second bankruptcy judge sua sponte cancelled the hearing on confirmation of the Second Amended Plan set for August 29, 2018. (Dkt. #2410).

JW Seventh Fee Application

On March 28, 2018, JW filed the Seventh Application for Compensation for the Period of November 1, 2017 Through February 28, 2018, and Reimbursement of Expenses by the Law Firm of Jones Walker LLP as Counsel to Kristina M. Johnson, Trustee of the Estate of Commu- nity Home Financial Services, Inc. (the "JW Seventh Fee Application") (STP-116), seeking in- terim fees of $182,877 and expenses of $39,330.70 (for a total of $222,207.70). "Exhibit A" to the JW Seventh Fee Application is JW's 183-page fee statement. (STP-116-1). Twelve attorneys and four paralegals performed services during this period. The attorneys' hourly rates varied from $240 to $475; the paralegals' hourly rate was $155. No objection was filed, and an interim order was entered. (STP-140).

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Trustee's Sixth Fee Application

On June 21, 2018, the Trustee's Sixth Application for Interim Compensation as the Chapter

11 Trustee of Community Home Financial Services, Inc. (the "Trustee's Sixth Fee Application") (STP-14) was filed seeking compensation for the period from February 1, 2018 through May 31, 2018 of $63,545.29. No objection was filed, and an interim order was entered granting the Trus- tee's Sixth Fee Application based on the § 326 cap. (STP-37).

JW Eighth Fee Application

On July 31, 2018, JW filed the Eighth Application for Compensation for the Period of March 1, 2018 Through June 30, 2018, and Reimbursement of Expenses by the Law Firm of Jones Walker LLP as Counsel to Kristina M. Johnson, Trustee of the Estate of Community Home Fi- nancial Services, Inc. (the "JW Eighth Fee Application") (STP-117), seeking interim fees of $199,290 and interim expenses of $13,968.51 (for a total of $213,258.51). "Exhibit A" to the JW Eighth Fee Application is JW's 127-page fee statement. (STP-117). Twelve attorneys and four paralegals performed services during this period. The attorneys' hourly rates varied from $240 to $475; the paralegals' hourly rate was $155. JW's services included preparing bill of costs, draft- ing motions to turnover and compel, and preparing for and presenting oral argument before the District Court on EFP/BHT's motion to stay pending appeal. No objection was filed, and an in- terim order was entered. (STP-141).

Trustee's Seventh Fee Application

On October 22, 2018, the Trustee's Seventh Application for Interim Compensation as the Chapter 11 Trustee of Community Home Financial Services, Inc. (the "Trustee's Seventh Fee Application") (STP-15) was filed seeking compensation for the period from June 1, 2018

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through September 30, 2018 of $16,001.61. No objection was filed, and an interim order grant- ing the Trustee's Seventh Fee Application was entered based on the § 326 cap. (STP-38).

JW Ninth Fee Application

On November 9, 2018, JW filed the Ninth Application for Compensation for the Period of July 1, 2018 Through October 31, 2018, and Reimbursement of Expenses by the Law Firm of Jones Walker LLP as Counsel to Kristina M. Johnson, Trustee of the Estate of Community Home Financial Services, Inc. (the "JW Ninth Fee Application") (STP-118), seeking interim fees of $217,186.50 and interim expenses of $4,841.32 (for a total of $222,027.82). "Exhibit A" to the JW Ninth Fee Application is JW's 110-page fee statement. (STP-118-1). Nine attorneys and four paralegals performed services during this period. The attorneys' hourly rates varied from $250 to $400; the paralegals' hourly rate was $155. JW's services included preparing briefs on the appeal of the Global Opinion and on appeals of the final fees awarded Henderson and Wells Marble. No objection was filed, and an interim ordered was entered. (STP-142).

Trustee's Eighth Fee Application

On March 22, 2019, the Trustee's Eighth Application for Interim Compensation as the Chap- ter 11 Trustee of Community Home Financial Services, Inc. (the "Trustee's Eighth Fee Applica- tion") (STP-16) was filed seeking compensation for the period from October 1, 2018 through January 31, 2019 of $17,162.59. No objection was filed, and an interim order granting the Trus- tee's Eighth Fee Application was entered based on the § 326 cap. (STP-39).

JW Tenth Fee Application

On March 27, 2019, JW filed the Tenth Application for Compensation for the Period of No- vember 1, 2018 Through February 28, 2019, and Reimbursement of Expenses by the Law Firm

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of Jones Walker LLP as Counsel to Kristina M. Johnson, Trustee of the Estate of Community Home Financial Services, Inc. (the "JW Tenth Fee Application") (STP-119), seeking interim fees of $20,593 and interim expenses of $1,104.85 (for a total of $21,697.85). "Exhibit A" to the JW Tenth Fee Application is JW's 57-page fee statement. (STP-119-1). Seven attorneys and two paralegals performed services during these four months. The attorneys' hourly rates varied from $250 to $500; the paralegals' hourly rate was $155. The fees in this JW Tenth Fee Application ($20,593) are significantly less than those in the JW Ninth Fee Application ($217,186.50). Dur- ing this period, there was little activity in the Edwards Adversary Proceedings, and work catego- rized under the task code "asset analysis and recovery" represented the bulk of the fees. No ob- jection was filed, and an interim order was entered. (STP-143).

Trustee's Ninth Fee Application

On July 30, 2019, the Trustee's Ninth Application for Interim Compensation as the Chapter

11 Trustee of Community Home Financial Services, Inc. (the "Trustee's Ninth Fee Application") (STP-17) was filed seeking compensation for the period from February 1, 2019 through May 31, 2019 of $7,653.38. No objection was filed, and an interim order was entered granting the Trus- tee's Ninth Fee Application based on the § 326 cap. (STP-40).

JW Eleventh Fee Application

On August 16, 2019, JW filed the Eleventh Application for Compensation for the Period of March 1, 2019 Through July 31, 2019, and Reimbursement of Expenses by the Law Firm of Jones Walker LLP as Counsel to Kristina M. Johnson, Trustee of the Estate of Community Home Financial Services, Inc. (the "JW Eleventh Fee Application") (STP-120), seeking interim fees of $28,319.50 and interim expenses of $3,922.65 (for a total of $32,242.15). "Exhibit A" to

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the JW Eleventh Fee Application is JW's 110-page fee statement. (STP-120-1). Seven attorneys and three paralegals performed services during this period. The attorneys' hourly rates varied from $270 to $450; the paralegals' hourly rate was $155. The fees in this JW Eleventh Fee Ap- plication are comparable in amount to those in the JW Tenth Fee Application. Again, there was little activity in the Edwards Adversary Proceedings. No objection was filed, and an interim or- der was entered. (STP-144).

Trustee's Tenth Fee Application

On November 6, 2019, the Trustee's Tenth Application for Interim Compensation as the Chapter 11 Trustee of Community Home Financial Services, Inc. (the "Trustee's Tenth Fee Ap- plication") (STP-18) was filed seeking compensation for the period from June 1, 2019 through September 30, 2019 of $7,148.36. No objection was filed, and an interim order granting the Trustee's Tenth Fee Application was entered based on the § 326 cap. (STP-41).

JW Twelfth Fee Application

On December 3, 2019, JW filed the Twelfth Application for Compensation for the Period of August 1, 2019 Through November 30, 2019, and Reimbursement of Expenses by the Law Firm of Jones Walker LLP as Counsel to Kristina M. Johnson, Trustee of the Estate of Community Home Financial Services, Inc. (the "JW Twelfth Fee Application") (STP-121), seeking interim fees of $39,262 and interim expenses of $3,700 (for a total of $42,962). "Exhibit A" to the JW Twelfth Fee Application is JW's 66-page fee statement. (STP-121-1). Six attorneys and two par- alegals performed services during this period. The attorneys' hourly rates varied from $270 to $495; the paralegals' hourly rate was $155. The fees in the JW Twelfth Fee Application are more than in the JW Eleventh Fee Application but are still less than those for the period covering the

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JW Ninth Fee Application. No objection was filed, and an interim order was entered. (STP-145).

Trustee's Motion to Vacate Stay Pending Appeal

On January 16, 2020, the Trustee moved the District Court to vacate the order staying execu- tion of portions of the Global Opinion pending the appeal. (STP-326). She had received an unso- licited offer to purchase 3,067 of the loans⁹⁸for $3-$3.5 million pending further due diligence and sought permission to pursue a possible sale. (STP-326; Dkt. #3528 at 151). That process would require her to file a motion before the bankruptcy court, which she could not do while the District Court's stay was in place. See 11 U.S.C. § 363.

EFP/BHT objected. (STP-324). Dr. Edwards testified that the Trustee had not shared with him any details about the sale offer and had not allowed him any input on the negotiations. (Dkt. #3532 at 159). He would not agree to sell "his assets" for that reason and also because he had no idea what the Trustee would agree to sell them for, especially since she had no prior experience in the loan servicing business. (Dkt. #3532 at 158-59).

Trustee's Eleventh Fee Application

On March 30, 2020, the Trustee's Eleventh Application for Interim Compensation as the Chapter 11 Trustee of Community Home Financial Services, Inc. (the "Trustee's Eleventh Fee Application") (STP-19) was filed seeking compensation for the period from October 1, 2019 through January 31, 2020 of $8,959.17. No objection was filed, and an interim order granting the Trustee's Eleventh Fee Application was entered based on the § 326 cap. (STP-42).

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JW Thirteenth Fee Application

On April 9, 2020, JW filed the Thirteenth Application for Compensation for the Period of December 1, 2019 Through March 31, 2020, and Reimbursement of Expenses by the Law Firm of Jones Walker LLP as Counsel to Kristina M. Johnson, Trustee of the Estate of Community Home Financial Services, Inc. (the "JW Thirteenth Fee Application") (STP-122), seeking interim fees of $66,315 and interim expenses of $3,155.76 (for a total of $69,470.76). "Exhibit A" to the JW Thirteenth Fee Application is JW's 94-page fee statement. (STP-122-1). Eight attorneys and three paralegals performed services during these four months. The attorneys' hourly rates varied from $350 to $550; the paralegals' hourly rate was $155. Two potential portfolio purchasers sur- faced at this time. JW moved the District Court to vacate the stay pending appeal to allow the Trustee to negotiate with these purchasers and seek the bankruptcy court's approval of a sale. (Dkt. #3525 at 76-77). No objection to the JW Thirteenth Fee Application was filed, and an in- terim ordered was entered. (STP-146).

Trustee's Twelfth Fee Application

On July 21, 2020, the Trustee's Twelfth Application for Interim Compensation as the Chap- ter 11 Trustee of Community Home Financial Services, Inc. (the "Trustee's Twelfth Fee Appli- cation") (STP-20) was filed seeking compensation for the period from February 1, 2020 through May 31, 2020 of $12,015.74. No objection was filed, and an interim order was entered granting the Trustee's Twelfth Fee Application based on the § 326 cap. (STP-43).

District Court's Ruling on Henderson's & Wells Marble's Fees—Second Appeal

On August 5, 2020, the District Court issued its final decision on Henderson's and Well Marble's fees. (Case No. 3:18-cv-00158-CWR-LRA; STP-339-40). The District Court reversed

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the award of attorneys' fees for all work performed on the Edwards Adversary Proceedings, rul- ing that these legal services were neither necessary nor reasonably likely to benefit the estate. Henderson and Wells Marble appealed. (STP-341). The Trustee, who did not participate in the appeals to the District Court, also appealed. (STP-341; Dkt. #3530 at 278-79). She filed a 42- page brief to the Fifth Circuit contending that the filing of the Edwards Adversary Proceedings was necessary for the administration of the estate. (STP-343; Dkt. #3530 at 280-81). She argued,

"This Court has the discretion to correct the district court's errors now to prevent further appeals on the same issue certain to come before this Court again as to similarly situated administrative expenses claimants in the Chapter 11 case who have yet to submit final fee applications related to the litigation." (STP-343 at 7-8). EFP/BHT moved to dismiss the Trustee from the appeal for lack of standing. The Fifth Circuit carried that motion with the case. While the matter was pending on appeal, Henderson and Wells Marble settled their fee dis- putes with EFP/BHT and dismissed their appeals. They agreed to return $54,433.74 to the estate. (STP-99). After the settlement, only the Trustee remained as an appellant. EFP/BHT argued (un- successfully) that the settlement mooted the Trustee's appeal.⁹⁹

JW Fourteenth Fee Application

On September 17, 2020, JW filed the Fourteenth Application for Compensation for the Peri- od of April 1, 2020 Through July 31, 2020, and Reimbursement of Expenses by the Law Firm of Jones Walker LLP as Counsel to Kristina M. Johnson, Trustee of the Estate of Community Home Financial Services, Inc. (the "JW Fourteenth Fee Application") (STP-123), seeking inter-

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im fees of $75,058 and interim expenses of $4,406.09 (for a total of $79,464.09). "Exhibit A" to the JW Fourteenth Fee Application is JW's 84-page fee statement. (STP-123-2). Six attorneys and two paralegals performed services during this period. The attorneys' hourly rates varied from $320 to $540; the paralegals' hourly rate was $155. The fees in the JW Fourteenth Fee Applica- tion reflect a steadily increasing amount from the period covered by the JW Tenth through Thir- teenth Fee Applications.

During this period, JW filed a petition for writ of mandamus before the Fifth Circuit to re- quire the District Court to rule on the appeal of the Global Opinion and the Trustee's motion to vacate the stay.¹⁰⁰(STP-331, 332). This time period also reflects work expended on the appeals of the District Court's decision on Henderson's and Well Marble's fees. No objection was filed, and an interim order was entered. (STP-147).

District Court's Ruling on Appeal of Global Opinion & Trustee's Motion to Vacate Stay Pending Appeal

After the parties had finished briefing the Global Opinion appeal, the District Court asked the parties to supplement their briefs to address the compensability of JW's fees. (Dkt. #3528 at 154- 55; EE-21). On October 2, 2020, the District Court issued the Memorandum Opinion and Order affirming in part, reversing in part, and rendering in part the Court's Global Opinion. See Ed- wards Family P'ship, LP v. Johnson, Case No. 3:18-CV-00156 CWR-LRA, 2020 WL 5878209 (S.D. Miss. Oct. 2, 2020); (STP-335). The District Court found that EFP/BHT held a perfected security interest in the Home Improvement Loans. It affirmed the Court's findings as to the

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Mortgage Portfolios.¹⁰¹It remanded for an explanation as to why the Trustee had standing to pur- sue damages for violation of the automatic stay or for an analysis grounding liability and damag- es in § 105's contempt authority. It also reversed the $10,000 award for additional servicing costs as well as the $10,000 damages award for conversion of the CD related to Dr. Edwards' trip to Costa Rica.

The Trustee's motion to vacate the stay pending the appeal was denied as moot on the ground that the exhibit attached to the motion suggested that the offer to purchase had expired. The Dis- trict Court stayed its ruling "pending the parties' anticipated appeal and cross-appeal."

In addition to these rulings, the District Court paused to comment on the acrimony between the parties: "The case was always at risk of a supercharged conflict." (STP-335). EFP/EFT view this comment as the District Court's acknowledgement of a conflict of interest between them and the Trustee. (Dkt. #3525 at 81). The District Court, although recognizing that fee issues were not then before it, commented, "In law, billable hours can keep going as long as there is a target to fight. There's a great target here, a stubborn and wealthy doctor playing businessman from out of state. And in this situation, the Trustee has no financial incentive to stop billing hours, as she is essentially using Dr. Edwards' own money to sue him." (STP-335 at 6). At that point, JW had billed the estate over $4.6 million in legal fees (EE-28), and ClearSpring's servicing fees had ris- en to over $4.7 million (EE-1).

EFP/BHT and the Trustee both appealed the District Court's ruling to the Fifth Circuit. (Dkt. #3530 at 190-91). EFP/BHT asked the Fifth Circuit to overturn the Court's conclusion that the

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EFP/BHT's right to repayment for funding Portfolios #3-6 was barred by the Statute of Frauds; complained about the Court's purported valuation of Portfolios #1-2; argued that the Court failed to offer a proper analysis of its disallowance of BHT's claim with respect to Portfolio #7; and asserted that the Court erred in concluding that EFP/BHT do not have a security interest in the funds stolen by Dickson and recovered by the Trustee. The Trustee, in turn, asked the Fifth Cir- cuit to reverse the District Court's conclusion that EFP/BHT held a valid security interest in the Home Improvement Loans and its decision to vacate and remand the Court's rulings on Dr. Ed- wards' post-petition conduct.

Trustee's Thirteenth Fee Application

On November 19, 2020, the Trustee's Thirteenth Application for Interim Compensation as the Chapter 11 Trustee of Community Home Financial Services, Inc. (the "Trustee's Thirteenth Fee Application") (STP-21) was filed seeking compensation for the period from June 1, 2020 through September 30, 2020 of $15,600.86. No objection was filed, and an interim order was en- tered granting the Trustee's Thirteenth Fee Application based on the § 326 cap. (STP-44).

JW Fifteenth Fee Application

On December 3, 2020, JW filed the Fifteenth Application for Compensation for the Period of August 1, 2020 Through November 30, 2020, and Reimbursement of Expenses by the Law Firm of Jones Walker LLP as Counsel to Kristina M. Johnson, Trustee of the Estate of Community Home Financial Services, Inc. (the "JW Fifteenth Fee Application") (STP-124), seeking interim fees of $217,429.50 and interim expenses of $6,592.32 (for a total of $224,021.82) for the period of August 1, 2020 through November 30, 2020. "Exhibit A" to the JW Fifteenth Fee Application is JW's 102-page fee statement. (STP-124-1). Seven attorneys and two paralegals performed ser-

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vices these four months. The attorneys' hourly rates varied from $310 to $540; the paralegals' hourly rate was $155. This period includes time expended on the Trustee's appeal of the District Court's fee opinion on Henderson's and Wells Marble's applications. Total billing for appellate motions and submissions was $127,879 and for appellate briefs was $65,448.50. (Dkt. #3525 at

122). No objection was filed, and an interim order was entered. (STP-148).

Fifth Circuit's Ruling on Henderson's & Wells Marble's Fees—Third Appeal

On March 5, 2021, the Fifth Circuit reversed the District Court. (Case No. 20-60178); Ed- wards Family P'ship, LP v. Johnson (In re Community Home Fin. Servs., Inc.), 990 F.3d 422 (5th Cir. 2021). The Fifth Circuit rejected EFP/BHT's argument that the Trustee lacked standing and that their settlement with Henderson and Wells Marble mooted the appeal. The Fifth Circuit noted that the Trustee was tasked with ensuring that only proper payments are made from the estate. The Fifth Circuit then ruled that the District Court had improperly assessed the benefit of services to the estate retrospectively rather than prospectively. "In awarding fees, hindsight is irrelevant." Id. at 427 (citing Barron & Newburger, P.C. v. Tex. Skyline, Ltd. (In re Woerner),

783 F.3d 266, 273-74 (5th Cir. 2015)). According to the Fifth Circuit, the District Court erred by not assessing the reasonableness and likely benefit of the services at the time they were rendered.

"Viewed prospectively, pursuit of the adversary proceedings was 'necessary to the administra- tion of the case' to resolve otherwise unsettled disputes about the priority of claims." Id. at 428. The Fifth Circuit's ruling reinstated the full amount of the fees awarded by the Court to Hender- son and Wells Marble. Henderson and Wells Marble nevertheless stood by their settlement agreement and disgorged their fees by $54,433.74. (STP-99).

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Trustee's Fourteenth Fee Application

On March 31, 2021, the Trustee's Fourteenth Application for Interim Compensation as the Chapter 11 Trustee of Community Home Financial Services, Inc. (the "Trustee's Fourteenth Fee Application") (STP-22) was filed seeking compensation for the period from October 1, 2020 through January 31, 2021 of $28,267.47. No objection was filed, and an interim order was en- tered granting the Trustee's Fourteenth Fee Application based on the § 326 cap. (STP-45).

JW Amended Sixteenth Fee Application

On June 4, 2021, JW filed the Amended Sixteenth Application for Compensation for the Pe- riod of December 1, 2020 Through March 31, 2021, and Reimbursement of Expenses by the Law Firm of Jones Walker LLP as Counsel to Kristina M. Johnson, Trustee of the Estate of Commu- nity Home Financial Services, Inc. (the "JW Amended Sixteenth Fee Application") (STP-125), seeking interim fees of $232,308.50 and interim expenses of $3,204.54 (for a total of $235,513.04) for the period of December 1, 2020 through March 31, 2021. "Exhibit A" to the JW Amended Sixteenth Fee Application is JW's 92-page fee statement. (STP-125-1). Seven at- torneys and three paralegals performed services during these four months but most of the fees were for time expended by Johnson (the Trustee). The attorneys' hourly rates varied from $320 to $560; the paralegals' hourly rate was $155. No objection was filed, and an interim ordered was entered. (STP-149).

Reassignment to Third Bankruptcy Judge

On June 30, 2021, the Bankruptcy Case and all related adversary proceedings were reas- signed to the current bankruptcy judge. The reassignment occurred while the Global Opinion ap- peal was pending before the Fifth Circuit and its execution had been stayed.

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Trustee's Fifteenth Fee Application

On July 15, 2021, the Trustee's Fifteenth Application for Interim Compensation as the Chap- ter 11 Trustee of Community Home Financial Services, Inc. (the "Trustee's Fifteenth Fee Appli- cation") (STP-23) was filed seeking compensation for the period from February 1, 2021 through May 31, 2021 of $7,180.33. No objection was filed, and an interim order was entered granting the Trustee's Fifteenth Fee Application based on the § 326 cap. (STP-46).

JW Seventeenth Fee Application

On September 10, 2021, JW filed the Seventeenth Application for Compensation for the Pe- riod of April 1, 2021 Through July 31, 2021, and Reimbursement of Expenses by the Law Firm of Jones Walker LLP as Counsel to Kristina M. Johnson, Trustee of the Estate of Community Home Financial Services, Inc. (the "JW Seventeenth Fee Application") (STP-126), seeking inter- im fees of $80,078.50 and interim expenses of $6,271.05 (for a total of $86,349.55). "Exhibit A"

to the JW Seventeenth Fee Application is JW's 79-page fee statement. (STP-126-1). Six attor- neys and four paralegals performed services during this period. The attorneys' hourly rates var- ied from $315 to $565; the paralegals' hourly rate was $155. Most of this period covered ap- peals. No objection was filed, and an interim order was entered. (STP-150).

Trustee's Sixteenth Fee Application

On October 19, 2021, the Trustee's Sixteenth Application for Interim Compensation as the Chapter 11 Trustee of Community Home Financial Services, Inc. (the "Trustee's Sixteenth Fee Application") (STP-24) was filed seeking compensation for the period from June 1, 2021 through September 30, 2021 of $12,635.74. No objection was filed, and the Court entered an in- terim order granting the Trustee's Sixteenth Fee Application based on the § 326 cap. (STP-47).

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JW Eighteenth Fee Application

On December 1, 2021, JW filed the Eighteenth Application for Compensation for the Period of August 1, 2021 Through November 30, 2021, and Reimbursement of Expenses by the Law Firm of Jones Walker LLP as Counsel to Kristina M. Johnson, Trustee of the Estate of Commu- nity Home Financial Services, Inc. (the "JW Eighteenth Fee Application") (STP-127), seeking interim fees of $121,495 and interim expenses of $6,622.65 (for a total of $128,117.65). "Exhibit A" to the JW Eighteenth Fee Application is JW's 64-page fee statement. (STP-127-1). Six attor- neys and three paralegals performed services during this period. The attorneys' hourly rates var- ied from $315 to $565; the paralegals' hourly rate was $155. The time entries include time ex- pended by the Trustee, Barber, Mintz, and Vance for a mock appellate argument in preparation for the oral argument before the Fifth Circuit. (Dkt. #3525 at 124). During this period, four JW attorneys attended oral argument before the Fifth Circuit. No objection was filed, and an interim order was entered. (STP-151).

Fifth Circuit's Decision on Appeal—Global Opinion

After oral argument on October 5, 2021, the Fifth Circuit referred the appeal of the Global Opinion to its mediation program. (Dkt. #3525 at 86). When mediation failed, the Fifth Circuit, on April 27, 2022, issued its opinion affirming the District Court's decision in part, reversing in part, and remanding. See Cmty. Home Fin. Servs., 32 F.4th 472.¹⁰²As a preliminary matter, the Fifth Circuit held that the Trustee had standing to raise questions about the legitimacy of the as- signment of the Home Improvement Loans—despite not being a party to the assignment. As to the merits of the arguments on appeal, the Fifth Circuit held that the loans to purchase Portfolios

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#3-6, for which there were no written agreements, were unenforceable under the Statute of Frauds; EFP/BHT held a perfected security interest in the Home Improvement Loans through their continuing possession of the notes; EFP/BHT failed to meet their burden of tracing the funds stolen by Dickson to the funds recovered by the Trustee and, therefore, they did not hold a security interest in those funds; and the CD that held information about CHFS's business opera- tions was not tangible property of the estate and, therefore, could not constitute converted estate property under state law. The Fifth Circuit remanded issues related to the Court's proposed valu- ation of Portfolios #1-2, its disallowance of BHT's claim as to Portfolio #7, and its award of damages based on Dr. Edwards' violation of the automatic stay. The District Court returned the Bankruptcy Case to this Court on May 19, 2022. (STP-104).

Trustee's Seventeenth Fee Application

On March 17, 2022, the Trustee's Seventeenth Application for Interim Compensation as the Chapter 11 Trustee of Community Home Financial Services, Inc. (the "Trustee's Seventeenth Fee Application") (STP-25) was filed seeking compensation for the period from October 1, 2021 through January 31, 2022 of $14,147.70. No objection was filed, and an interim order was en- tered granting the Trustee's Seventeenth Fee Application based on the § 326 cap. (STP-48).

JW Nineteenth Fee Application

On May 5, 2022, JW filed the Nineteenth Application for Compensation for the Period of December 1, 2021 Through March 31, 2022, and Reimbursement of Expenses by the Law Firm of Jones Walker LLP as Counsel to Kristina M. Johnson, Trustee of the Estate of Community Home Financial Services, Inc. (the "JW Nineteenth Fee Application") (STP-128), seeking inter- im fees of $27,744.20 and interim expenses of $4,772.53 (for a total of $32,516.73). "Exhibit A"

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to the JW Nineteenth Fee Application is JW's 63-page fee statement. (STP-128-1). Five attor- neys and one paralegal performed services during this period. The attorneys' hourly rates ranged from $315 to $605; the paralegal's hourly rate was $155. The fees covering this period are sub- stantially less than prior fee applications, assumably because JW expended no work on the Ed- wards Adversary Proceedings. (Dkt. #3525 at 125). Total billing under the task code "Settlement Non-Binding ADR" was $15,653.70, representing time expended preparing for and attending the Fifth Circuit mediation conference, which according to EFP/EFT lasted less than two hours. (STP-279 at 72-73 nn.66-67; STP-128 at 52-56). No objection was filed, and the Court entered an interim order. (STP-152).

EFP/BHT's Fourth Cash Collateral Motion

On July 15, 2022, EFP/BHT filed their fourth motion to prohibit use of cash collateral (Dkt. #3012), to which the Trustee objected. (Dkt. #3029). EFP/BHT argued that they were entitled to a replacement lien on all cash recovered by the Trustee, including all untraceable funds. They also filed an application for a super priority administrative claim.

Trustee's Motions to Abandon, Reject & Sell & Application to Employ Sales Consultant

At this juncture, the Trustee "wanted out of the [loan] servicing business." (Dkt. #3528 at

169). She filed three motions toward that end. First, she asked the Court to approve the estate's abandonment of the Home Improvement Loans to EFP/BHT based upon the Fifth Circuit's de- termination on appeal that these loans were encumbered by EFP/BHT's perfected security inter- est. (EE-22). The debt owed EFP/BHT for the purchase of the Home Improvement Loans was $17,832,496. Based on the unpaid principal balance of the Home Improvement Loans and a highly unlikely 100% collection rate, the value of the Home Improvement Loans would amount

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only to $11,479,140.78, which is less than the debt owed EFP/EFT. For this reason, the Trustee concluded that there was no equity in the loans for the benefit of the estate. (EE-22 at 3; Dkt. #3528 at 167).

Second, she asked the Court for permission to reject the servicing contract between CHFS and BHT with respect to Portfolio #7.¹⁰³(Dkt. #3048). Third, she asked the Court to approve bidding procedures for the sale of Portfolios #1-6 (Dkt. #3103) and a related application to em- ploy a sales consultant. (Dkt. #3102; Dkt. #3528 at 168-69).

At Trial, the Trustee testified that other than filing the Trustee's Second Amended Plan and the motion to sell Portfolios #1-6, she had no idea what else she could have done. (Dkt. #3528 at

169).

EFP/BHT objected to the Trustee's motions and filed a separate motion again asking the Court to grant them a super priority administrative expense claim on all funds recovered by the Trustee. (Dkt. #3064, #3065, #3123, #3124, #3125). They argued that the Trustee's request to abandon the Home Improvement Loans was premature, at least until the Court ruled on their mo- tion seeking a replacement lien and otherwise determined how EFP/BHT would be made whole. They maintained that if the Trustee were allowed to abandon the Home Improvement Loans, she might argue that its secured claim had been satisfied by the return of their collateral, which they insisted would be unfair because they were entitled to the loan collections and the Trustee did not want to turn the cash over to them even though the loan collections were generated from their collateral. (Dkt. #3064). As to the Trustee's rejection of the servicing contract, they viewed the Trustee's request as an attempt to limit the estate's liability to BHT. The rejection, according to

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EFP/BHT, would provide BHT a claim for breach of contract as of the day before the filing of the Bankruptcy Case, which would deprive BHT of the opportunity to seek damages from the estate for the years the Trustee exercised control over its property. (Dkt. #3065).

Trustee's Eighteenth Fee Application

On July 22, 2022, the Trustee's Eighteenth Application for Interim Compensation as the Chapter 11 Trustee of Community Home Financial Services, Inc. (the "Trustee's Eighteenth Fee Application") (STP-26) was filed seeking compensation for the period from February 1, 2022 through May 31, 2022 of $7,843.87. EFP/BHT filed a limited objection (Dkt. #3026), which they withdrew. (Dkt. #3145). The Court entered an interim order granting the Trustee's Eighteenth Fee Application based on the § 326 cap. (STP-49).

JW Twentieth Fee Application

On September 27, 2022, JW filed the Twentieth Application for Compensation for the Period of April 1, 2022 Through July 31, 2022, and Reimbursement of Expenses by the Law Firm of Jones Walker LLP as Counsel to Kristina M. Johnson, Trustee of the Estate of Community Home Financial Services, Inc. (the "JW Twentieth Fee Application") (STP-129), seeking interim fees of $36,118 and interim expenses of $5,193.15 (for a total of $41,311.15). "Exhibit A" to the JW Twentieth Fee Application is JW's 75-page fee statement. (STP-129-1). Seven attorneys and two paralegals performed services during these four months. The attorneys' hourly rates ranged from $315 to $720; the paralegals' hourly rate was $155. During this period, the Fifth Circuit issued its ruling on the Global Opinion, and no further appellate work was needed. The JW Twentieth Fee Applications shows a cumulative total of $823,029 for all work performed under

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the task codes for "Appeal."¹⁰⁴(STP-129 at 72). EFP/BHT filed a limited objection to the JW Twentieth Fee Application (Dkt. #3056), which they later withdrew (Dkt. #3150), and an interim order was entered. (STP-153).

Remand Proceedings on Global Opinion

A status conference was held before this third bankruptcy judge on October 18, 2022 to pro- vide the parties an opportunity to summarize the current status of the proceedings. (Dkt. #3054). At the status conference, the parties were unable to agree on the scope of the remand. The Court, therefore, instructed the parties to submit briefs identifying the issues. (Dkt. #3061). The parties filed briefs (Dkt. #3071, #3072) on December 2, 2022 and reply briefs (Dkt. #3073, #3074) on December 16, 2022. After a hearing on January 20, 2023, the Court entered an order listing the issues on remand. (STP-105). The Court set a hearing for March 28, 2023 on the remand issues, EFP/BHT's motion to prohibit use of cash collateral, and the Trustee's motion to abandon the Home Improvement Loans. (Dkt. #3081). In preparation for that hearing, the Trustee asked Aucoin to update the reports he prepared in 2017 for the trial of the Edwards Adversary Proceed- ings to recalculate the loan collections. (Dkt. #3528 at 110).

Trustee's Nineteenth Fee Application

On November 29, 2022, the Trustee's Nineteenth Application for Interim Compensation as the Chapter 11 Trustee of Community Home Financial Services, Inc. (the "Trustee's Nineteenth Fee Application") (STP-27) was filed seeking compensation for the period from June 1, 2022 through September 30, 2022 of $14,548.40. EFP/BHT filed a limited objection (Dkt. #3075), which they later withdrew (Dkt. #3146). The Court entered an interim order granting the Trus-

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tee's Nineteenth Fee Application based on the § 326 cap. (STP-50).

JW Twenty-First Fee Application

On January 30, 2023, JW filed the Twenty-First Application for Compensation for the Period of August 1, 2022 Through November 30, 2022, and Reimbursement of Expenses by the Law Firm of Jones Walker LLP as Counsel to Kristina M. Johnson, Trustee of the Estate of Commu- nity Home Financial Services, Inc. (the "JW Twenty-First Fee Application") (STP-130), seeking interim fees of $115,632.50 and interim expenses of $7,730.54 (for a total of $123,363.04). "Ex- hibit A" to the JW Twenty-First Fee Application is JW's 86-page fee statement. (STP-130-1). Five attorneys and two paralegals performed services during this period. The attorneys' hourly rates ranged from $358.01 to $450; the paralegals' hourly rate was $155. This period covered JW's litigation of the remand issues in the Edwards Adversary Proceedings. EFP/BHT filed a limited objection (Dkt. #3093), which they withdrew (Dkt. #3152), and an interim order was en- tered. (STP-154).

Trustee's Twentieth Fee Application

On February 27, 2023, the Trustee's Twentieth Application for Interim Compensation as the Chapter 11 Trustee of Community Home Financial Services, Inc. (the "Trustee's Twentieth Fee Application") (STP-28) was filed seeking compensation for the period from October 1, 2022 through January 31, 2023 of $6,994.34. EFP/BHT filed a limited objection (Dkt. #3115), which they later withdrew. (Dkt. #3156). An interim order was entered granting the Trustee's Twentieth Fee Application based on the § 326 cap. (STP-51).

JW Twenty-Second Fee Application

On May 10, 2023, JW filed the Twenty-Second Application for Compensation for the Period

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of December 1, 2022 Through March 31, 2023, and Reimbursement of Expenses by the Law Firm of Jones Walker LLP as Counsel to Kristina M. Johnson, Trustee of the Estate of Commu- nity Home Financial Services, Inc. (the "JW Twenty-Second Fee Application") (STP-131), seek- ing interim fees of $325,503.50 and interim expenses of $26,894.20 (for a total of $352,397.70).

"Exhibit A" to the JW Twenty-First Fee Application is JW's 122-page fee statement. (STP-131-

1). This fee statement and all subsequent statements use a new format. Seven attorneys and three paralegal performed services during this period. The attorneys' hourly rates ranged from $380 to $705; the paralegals' hourly rate was $155. JW's services included preparing for the remand hearing and developing a strategy to liquidate the Mortgage Portfolios. No objection to the JW Twenty-First Fee Application was filed, and an interim order was entered. (STP-155).

Global Settlement & Joint Plan (May 15, 2023)

On March 28, 2023, the morning of the first day of the remand hearing—after years of acri- monious litigation—the Trustee and Dr. Edwards settled all litigation and pending contested matters. (STP-106; Dkt. #3532 at 56). By that time, ClearSpring's loan collections had grown to over $20 million.

The parties incorporated the terms of their settlement into the Joint Third Amended Chapter

11 Plan of Liquidation of the Estate of Community Home Financial Services, Inc. (the "Joint Plan") (Dkt. #3256) filed on May 15, 2023. In brief, the Joint Plan transferred all estate assets, both monetary and non-monetary, to EFP/BHT after payment of allowed claims and administra- tive expenses with the parties reserving their rights to defend a claim and/or object to the admin- istrative claims of all estate professionals. (STP-107 at 15). The parties agreed, however, that the Trustee could hold back $75,000 to pay estate professionals "for the fees and expenses incurred

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in confirming this [Joint] Plan." (Dkt. #3256 at 16; Dkt. #3528 at 185). EFP/BHT understood from the Trustee's testimony at the confirmation hearing that all professional fees had been paid up to date and all that remained were final fee applications for work performed during "a very small gap period." (Dkt. #3303 at 41-42; Dkt. #3406 at 11-13).

The Joint Plan required estate professionals to file their final fee applications within 60 days after the effective date.¹⁰⁵(Dkt. #3256 at 14). The Joint Plan did not disclose JW's intent to seek a $920,000 "fee enhancement" or "rate restoration," and JW did not reveal their intent to seek additional fees to Dr. Edwards before or during the confirmation hearing. (Dkt. #3406 at 18-28).

Trustee's Twenty-First Fee Application

On June 16, 2023, the Trustee's Twenty-First Application for Interim Compensation as the Chapter 11 Trustee of Community Home Financial Services, Inc. (the "Trustee's Twenty-First Fee Application") (STP-29) was filed seeking compensation for the period from February 1, 2023 through June 15, 2023 of $26,017.10. No objection was filed and an interim order was en- tered granting the Trustee's Twenty-First Fee Application based on the § 326 cap. (STP-52).

Confirmation of Joint Plan

The Court conducted a confirmation hearing and entered a final judgment confirming the Joint Plan¹⁰⁶on July 12, 2023 (the "Confirmation Order") (STP-275). The Court maintained ju- risdiction over pending fee applications and any matters necessary to enforce the Confirmation Order. The effective date under the Confirmation Order and Joint Plan was July 17, 2023. (Dkt.

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#3299; STP-276; Dkt. #3528 at 173). Pursuant to the Joint Plan, the Trustee transferred to EFP/BHT all loan servicing operations and operating assets by assignments executed on July 14, 2023, and the Trustee wired EFP/BHT $3,000,000 on August 3, 2023 and $9,496,643.76 on Sep- tember 5, 2023. (Dkt. #3336 at 4-5; Dkt. #3528 at 198-99; T-20).

As of September 5, 2023, the cash disbursed to EFP/BHT under the Joint Plan totaled $12,496,643.76. (Dkt. #3528 at 200; T-20). Although the Joint Plan required the Trustee to con- vey all remaining cash in the estate to EFP/BHT except for a $75,000 holdback for fees and ex- penses incurred by estate professionals in confirming the Joint Plan, the estate's bank balance as of September 6, 2023 was $1,981,317.61. (STP-280; STP-60 at 6).

Objections to Proofs of Claim

To limit professional fees incurred after confirmation of the Joint Plan, EFP/BHT agreed to bear responsibility for objecting to all remaining non-Edwards proofs of claim. (Dkt. #3184 to #3204). No creditor responded, and orders disallowing the claims were entered by default. (Dkt. #3214 to #3232).

Trustee's Motion to Close Case

The Trustee filed a motion to close the Bankruptcy Case (Dkt. #3341) to which EFP/BHT objected (Dkt. #3374). After a hearing, the Court entered an order granting the motion and clos- ing the Bankruptcy Case but retaining jurisdiction over any fee disputes. (Dkt. #3399).

JW Final Fee Application

On August 22, 2023, JW filed the JW Final Fee Application, seeking final approval of inter- im fees of $5,500,697 and expenses of $334,585.32 (for a total of $5,835,282.32) for services provided from January 2, 2023 through March 31, 2023; unpaid fees of $90,029 and expenses of

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$6,540.26 (for a total of $96,569.26) for the period from April 1, 2023 through June 27, 2023; estimated fees of $119,338.50 and expenses of $10,564.43 (for a total of $129,902.93) for the period from June 28, 2023 through November 16, 2023, the date the Bankruptcy Case was closed; and a "fee enhancement" of $920,000. (STP-132). Altogether, JW seeks approval of $6,981,754.51 in fees and expenses. "Exhibit A" to the JW Final Fee Application is JW's fee statement for the period from April 1, 2023 through June 27, 2023. (STP-132-1). Six attorneys and three paralegals performed services during this period. The attorneys' hourly rates ranged from $380 to $650. JW never supplemented the JW Final Fee Application to substitute actual fees and expenses for the estimated amounts covering the subsequent period from June 28, 2023 through November 16, 2023. The following table at Exhibit T-8 shows the fees and expenses al- ready paid JW on an interim basis in each fee application:

Fees & Expenses Already Paid JW on an Interim Basis Fee Application Time Period Fees Expenses

JW First 01/02/2014 - 07/31/2014 $707,230.00 $55,603.55 JW Am. Second 08/01/2014 - 06/30/2015 $859,207.00 $36,766.06 JW Third 07/01/2015 - 02/20/2016 $547,719.00 $10,783.68 JW Fourth 03/01/2016 - 02/28/2017 $539,919.30 $14,985.41 JW Fifth 03/01/2017 - 06/30/2017 $434,846.00 $53,258.74 JW Sixth 07/01/2017 - 10/31/2017 $426,565.00 $21,477.02 JW Seventh 11/01/2017 - 02/28/2018 $182,877.00 $39,330.70 JW Eighth 03/01/2018 - 06/30/2018 $199,290.00 $13,968.51 JW Ninth 07/01/2018 - 10/31/2018 $217,186.50 $4,841.32 JW Tenth 11/01/2018 - 02/28/2019 $20,593.00 $1,104.85 JW Eleventh 03/01/2019 - 07/31/2019 $28,319.50 $3,922.65 JW Twelfth 08/01/2019 - 11/30/2019 $39,262.00 $3,700.00 JW Thirteenth 12/01/2019 - 03/31/2020 $66,315.00 $3,155.76 JW Fourteenth 04/01/2020 - 07/31/2020 $75,058.00 $4,406.09 JW Fifteenth 08/01/2020 - 11/30/2020 $217,429.50 $6,592.32 JW Am. Sixteenth 12/01/2020 - 03/31/2021 $232,308.50 $3,204.54 JW Seventeenth 04/01/2021 - 07/31/2021 $80,078.50 $6,271.05 JW Eighteenth 08/01/2021 - 11/30/2021 $121,495.00 $6,622.65 JW Nineteenth 12/01/2021 - 03/31/2022 $27,744.20 $4,772.53 JW Twentieth 04/01/2022 - 07/31/2022 $36,118.00 $5,193.15 JW Twenty-First 08/01/2022 - 11/30/2022 $115,632.50 $7,730.54 JW Twenty-Second 12/01/2022 - 03/31/2023 $325,503.50 $26,894.20

TOTAL $5,500,697.00 $334,585.32

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Trustee's Final Fee Application

The Trustee's Final Fee Application filed on August 22, 2023 seeks final approval of the to- tal interim compensation already paid her ($547,792.64) for services provided from January 16, 2014 through June 15, 2023. (STP-30). She also requests $36,237.88 for the unpaid period from June 16, 2023 through August 14, 2023 and $752,250.97 in estimated "effective and/or future disbursements" covering the period from August 15, 2023 through November 16, 2023, for a to- tal of $1,336,281.49. (STP-30 at 1; T-21). The Trustee's calculation is based on a sliding scale of varying percentages of cash disbursements made during the relevant time period. See 11 U.S.C. § 326(a). She also seeks additional compensation pursuant to the Joint Plan based on a percent- age of "in-kind" disbursements, the value of which the parties ask this Court to determine. EFP/EFT object to her calculation and the reasonableness of her fees. According to the Trustee, from the beginning of her appointment through June 15, 2023, she spent 5,647.90 hours performing her duties. (STP-30). For the work performed during this peri- od, she submitted twenty-one interim fee applications, and the estate paid her $547,792.64 in to- tal interim compensation based on the statutory cap under § 326, as shown in the following table at Exhibit STP-8:

§ 326 Statutory Cap Paid to Trustee on Interim Basis Trustee

Fee Application Time Period Fees

First 01/16/2014 - 06/30/2015 $88,633.00¹⁰⁷ Am. Second 07/01/2015 - 02/29/2016 $32,412.88 Third 03/01/2016 - 05/31/2017 $82,972.82 Fourth 06/01/2017 - 09/30/2017 $41,587.32 Fifth 10/01/2017 - 01/31/2018 $36,441.42 Sixth 02/01/2018 - 05/31/2018 $63,545.29 Seventh 06/01/2018 - 09/30/2018 $16,001.61 Eighth 10/01/2018 - 01/31/2019 $17,162.59

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Ninth 02/01/2019 - 05/31/2019 $7,653.38 Tenth 06/01/2019 - 09/30/2019 $7,148.36 Eleventh 10/01/2019 - 01/31/2020 $8,959.17 Twelfth 02/01/2020 - 05/31/2020 $12,015.74 Thirteenth 06/01/2020 - 09/31/2020 $15,600.86 Fourteenth 10/01/2020 - 01/31/2021 $28,267.47 Fifteenth 02/01/2021 - 05/31/2021 $7,180.33 Sixteenth 06/01/2021 - 09/31/2021 $12,635.74 Seventeenth 10/01/2021 - 01/31/2022 $14,147.70 Eighteenth 02/01/2022 - 05/31/2022 $7,843.87 Nineteenth 06/01/2022 - 09/31/2022 $14,548.40 Twentieth 10/01/2022 - 01/31/2023 $6,994.34 Twenty-First 02/01/2023 - 06/15/2023 $26,017.10

TOTAL $547,792.64 EFP/EFT's Motion to Compel Compliance with Joint Plan

In her eighth statement of investigation and report, the Trustee revealed that the estate's bank account as of September 8, 2023 held $1,981,317.61. (STP-60 at 6); see 11 U.S.C. § 1106(4). However, the Joint Plan required the Trustee to transfer almost all cash to EFP/EFT. On October 19, 2023, EFP/EFT filed a motion to compel, accusing the Trustee of violating the Joint Plan. (STP-280). They asked the Court to require the Trustee to immediately transfer to them all re- maining cash in the estate, less $75,000, based on the following provision of the Joint Plan:

On the Effective Date, the Trustee will convey the remaining Cash in the Estate after Classes 1 [secured claims], 2 [priority unsecured claims], and 4 [general unsecured claims] are paid in full, less $75,000, which will be held by the Trustee and not dis- bursed without further order of the Court. These funds will be available to pay the Es- tate Professionals for the fees and expenses incurred in confirming this Plan, after no- tice and a hearing.

(Dkt. #3256, Art. IV, § 4.3(vi)).

The Trustee argued that she was entitled to hold back an amount sufficient to satisfy: pending final fee applications, including her own statutory compensation ($788,488.85), and JW's final fees ($1,146,472.19); estate tax liability; and UST fees.¹⁰⁸(Dkt. #3391 at 7-8). As authority, the

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Trustee relied on the following provision in the Joint Plan: "[E]ach Holder of any Allowed Ad- ministrative Claim will receive . . . Cash equal to the Allowed amount of such Administrative Claim." (Dkt. #3391 at 2).

After a hearing, the Court concluded that the Trustee had violated the terms of the Joint Plan and partially sustained EFP/EFT's objection. Based on the agreement of the parties, the Court ordered the Trustee to continue to hold only: (a) $788,488.85 in Trustee's statutory fees; (b) $122,637.58 in UST's fees; and (c) $75,000 in the agreed-upon holdback amount. (STP-167). The Court further ordered the Trustee to transfer to EFP/EFT all remaining cash in the estate's account with the understanding that EFP/EFT may have to return some, or all, of these funds pending the outcome of their fee disputes. (STP-167). On March 31, 2024, the Trustee sent EFP/EFT an additional payment of $93,490.45. (Dkt. #3530 at 134; T-21). Combined, EFP/EFT received cash under the Joint Plan totaling $13,580,104.27 as of the Trial date.¹⁰⁹(T-20).

Pre-Trial Conference on Fee Disputes

On April 3, 2024, the Court held a pre-trial conference wherein the Court established, and the parties agreed to, certain Trial procedures. At that pre-trial conference, neither JW nor the Trus- tee requested permission to file a pre-trial brief. In fact, the Court expressly informed the parties that it did not require or authorize any additional briefs. Unable to follow this Court's express instructions, the Trustee and JW filed the Trustee's and Jones Walker's LLP's Joint Trial Memo- randum of Authorities (the "Pre-Trial Brief") (Dkt. #3454) on April 10, 2024 (only three busi- ness days before Trial began). That same day, EFP/EFT moved to strike the Pre-Trial Brief. amounts requested. (Dkt. #3391 at 8 n.9).

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(Dkt. #3455). After a hearing on April 11, 2024, the Court found that requiring EFP/EFT to re- spond to the nineteen-page pretrial brief at this late date "would be fundamentally unfair" and granted EFP/EFT's motion to strike. (Dkt. #3460 at 2).

Consolidated Trial on JW's & Trustee's Compensation & Resolution of UST Final Fee Objection

On the first day of Trial, JW announced that it had informally resolved the UST's objections to the JW Final Fee Application, except for his objection to the firm's request for a "fee en- hancement." As a result, JW agreed to reduce its fees by $29,085.25. (Dkt. #3524 at 49-50; Dkt. #3525 at 130-31; STP-347). Those reductions consist of: $21,952.25 (reducing travel time by one-half); $5,813 (reducing by twelve hours the time expended—mostly Barber's time— preparing the JW Final Fee Application); and $1,320 (reducing by one hour each the time ex- pended by Barber, Mintz, and Elizabeth De Leon ("De Leon") preparing for and attending a con- firmation hearing). On the seventh day of Trial, JW announced that it had resolved the UST's objection to the "fee enhancement." (Dkt. #3530 at 6-7). JW agreed that it would no longer seek a "fee enhancement" but a "rate restoration." (Dkt. #3530 at 6-7). This agreement changed only the label; it did not remove JW's request for an additional $920,000.

Revised Trial Transcripts

After the evidentiary portion of the Trial ended on June 14, 2024, the Court set closing argu- ments for August 28, 2024. In the meantime, the parties ordered Trial transcripts. (Dkt. #3468, #3495). The court transcriber filed the transcripts under seal pending any request to redact per- sonal identifiers. (Dkt. ##3480-3485, ##3504-3506) Thereafter, the Court became aware that the parties had asked the court transcriber to make changes (not redactions) to the transcripts without

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first notifying the Court or seeking the Court's permission. At a status conference, the parties represented that the requested changes were not substantive and that the court transcriber had informed them that none would be made unless the audio recording confirmed that a transcrip- tion error had occurred. The Court instructed the parties to file a joint motion listing all requested changes. That joint motion revealed that some of the requested changes were substantive and not merely scrivener's errors. (Dkt. #3519). The Court issued an order on October 2, 2024 granting in part and denying in part the joint motion. (Dkt. #3520). The Court listed the changes allowed and disallowed based on the audio recordings. The transcriber filed final revised Trial transcripts, which are the official Court records, on October 15, 2024. (Dkt. ##3524-3532).

DISCUSSION

A chapter 11 trustee is entitled to "reasonable compensation" determined in the same way that reasonable compensation is calculated for all other estate professionals—except that it is subject to a statutory cap under § 326(a), as discussed in more detail later. In re Golden Park Es- tates, LLC, Case No. 14-12253, 2015 WL 5785756, at *4 (Bankr. D.N.M. Oct. 2, 2015). A chap- ter 11 trustee is not required or expected to perform her statutory duties without any assistance. With bankruptcy court approval, she is allowed to hire professionals and bill the estate their hourly fees and expenses. 11 U.S.C. § 327(a).

Here, the Trustee hired herself, her partners, associates, and paralegals at JW. She hired nu- merous other professionals too, including: Stephen Smith & Company, P.A. and later Harper, Rains, Knight & Company, P.A. ("HRK") as the estate's accountant; Facio & Cañas as special counsel, John D. Moore as conflicts counsel, ARIFA as special counsel, Horne LLP as forensic accountants, Jeffrey Kirk as an expert in British Virgin Islands law, ClearSpring as the loan ser-

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vicer, and retired Bankruptcy Judge David Houston as mediator.¹¹⁰The present dispute involves only the Trustee's and JW's fees and expenses. All other professionals either have been paid in full or have resolved their fee disputes without Court intervention.

A. Burden of Proof

JW and the Trustee bear the burden of establishing their entitlement to the compensation they seek because "[e]very dollar received . . . results in one dollar less for creditors." Evangeline,

890 F.2d at 1326; United States ex rel. Rigsby v. State Farm Fire & Cas. Co., Case No. 1:06-cv- 00433, 2014 WL 691500, at *9 (S.D. Miss. Feb. 21, 2014). The Court gave the parties ten days of Trial to present evidence in support of their respective positions, including one day designated for closing arguments.

The amount of JW's requested fees has been a hotly contested issue in this Bankruptcy Case almost from the beginning of its employment and has already drawn comments by both the Dis- trict Court and Fifth Circuit. In the Global Opinion appeal, the District Court expressed its con- cern that the Trustee, JW, and other professionals retained by the Trustee had billed the estate more than $5 million. Edwards Family P'ship, LP, 2020 WL 5878209, at *3. "[T]he Trustee has no financial incentive to stop billing hours, as she is essentially using Dr. Edwards' own money to sue him." Id. In a footnote, the Fifth Circuit echoed the District Court's concerns "on the trou- bling incentives associated with the arrangement between Johnson and her law firm in this case. Thus far, more than thirty lawyers have billed the estate for work on this matter, amounting to over $5 million in legal fees for which the estate is now responsible." Community Home, 32

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F.4th at 479 n.9. Those remarks were dicta but bear mentioning because they placed JW and the Trustee on notice that they would likely face challenges to the reasonableness of their fees at the close of the Bankruptcy Case. That notice meant they had ample opportunity to review the hours expended and hourly rates charged to determine whether they could meet their burden of proof and, if not, to make appropriate adjustments.

To be clear, the burden is not on this Court "to justify each dollar or hour deducted from the total submitted by counsel. It remains counsel's burden to prove and establish the reasonableness of each dollar, each hour, above zero." Mares v. Credit Bureau of Raton, 801 F.2d 1197, 1210 (10th Cir. 1986). The Court may on its own motion or the motion of an interested party award compensation that is less than the amount requested. 11 U.S.C. § 330(a)(2). Once JW and the Trustee carry their burden of showing the reasonableness and necessity of their services (and thus their fees), the burden shifts to EFP/EFT "to produce evidence showing that [JW and the Trustee have] requested an unreasonable amount." In re Quigley Co., 500 B.R. 347, 357 (Bankr. S.D.N.Y. 2013) (citations omitted). "A general objection to all fees and ex- penses is not proper, and '[g]eneral dissatisfaction or a disagreement over business judgment will not suffice' to support an objection to fees." In re Sugarloaf Ctr., LLC, Case No. 15-58442, 2020 WL 6749771, at *8 (Bankr. N.D. Ga. Nov. 17, 2020) (citation omitted). "The amount requested by a fee application cannot be considered unreasonable simply because one party feels it is ex- cessive: 'Objectors have the responsibility to challenge [the] information [presented in a fee ap- plication] and to produce evidence controverting that produced by the applicant.'" In re Black- wood Assocs., LP, 165 B.R. 108, 111-12 (Bankr. E.D.N.Y. 1994) (citation omitted). "A party opposing a fee application must carry the burden of explaining what therein is unreasonable un-

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der the circumstances." Id.

B. Standard for Determining Reasonableness of Fees & Expenses

The framework that bankruptcy courts use to determine the compensation of professionals is a coalescence of the lodestar, § 330(a)(1), and the Johnson factors. CRG Partners Grp., LLC v. Neary (In re Pilgrim's Pride Corp.), 690 F.3d 650, 656 (5th Cir. 2012), as rev'd (Aug. 14, 2012).

"The lodestar is calculated by multiplying the number of hours an attorney reasonably spent on the case by an appropriate hourly rate, which is the market rate in the community for this work."

Black v. SettlePou, PC, 732 F.3d 492, 502 (5th Cir. 2013) (citation omitted). Subsection § 330(a)(1) sets the general standard: "the court may award to a . . . professional person em- ployed under section 327 . . . reasonable compensation for actual, necessary services rendered by the . . . professional person." 11 U.S.C. § 330(a)(1) (emphasis added). More detail is outlined in § 330(a)(3), which provides the following list of factors that courts must consider:

(A) the time spent on such services;

(B) the rates charged for such services;

(C) whether the services were necessary to the administration of, or beneficial at the time at which the service was rendered toward the compensation of, a case under this title;

(D) whether the services were performed within a reasonable amount of time commensu- rate with the complexity, importance, and nature of the problem, issue, or task addressed;

(E) with respect to a professional person, whether the person is board certified or other- wise has demonstrated skill and experience in the bankruptcy field; and

(F) whether the compensation is reasonable based on the customary compensation charged by comparably skilled practitioners in cases other than cases under this title.

11 U.S.C. § 330(a)(3)(A)-(F). Consideration of these factors is mandatory but not exclusive. 11 U.S.C. § 330(a)(3) (bankruptcy courts must take "into account all relevant factors"). The Fifth

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Circuit has held that the scheme for compensating attorneys under § 330(a)(3) contemplates "a prospective standard . . . —one that looks to the necessity or reasonableness of legal services at the time they were rendered." Woerner, 783 F.3d at 276 (emphasis added). In addition to identifying relevant factors that courts must consider, the statute identifies what courts may not allow. Courts "shall not allow compensation for—(i) unnecessary duplication of services; or (ii) services that were not—(I) reasonably likely to benefit the debtor's estate; or (II) necessary to the administration of the case." 11 U.S.C. § 330(a)(4) (emphasis added). Finally, in addition to the statutory factors enumerated under § 330(a)(3), the Fifth Circuit requires bankruptcy courts to consider the following twelve "Johnson" factors:

(1) The time and labor required; (2) The novelty and difficulty of the questions; (3) The skill requisite to perform the legal service properly; (4) Preclusion of other employment;

(5) The customary fee; (6) Whether the fee is fixed or contingent; (7) Time limitations imposed by the client or other circumstances; (8) The amount involved and the results ob- tained; (9) The experience, reputation, and ability of the attorneys; (10) The "undesirabil- ity" of the case; (11) The nature and length of the professional relationship with the cli- ent; (12) Awards in similar cases.

Am. Benefit Life Ins. Co. v. Baddock (In re First Colonial Corp. of Am.), 544 F.2d 1291, 1298-99 (5th Cir. 1977) (quoting Johnson v. Ga. Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974), abrogated on other grounds by Blanchard v. Bergeron, 489 U.S. 87 (1989)). Four of the Johnson factors—the novelty and complexity of the issues, the special skill and experience of counsel, the quality of the representation, and the results obtained from the litigation—are al- ready reflected in the lodestar amount. Transamerican Natural Gas Corp. v. Zapata P'ship, LTD (In re Fender), 12 F.3d 480, 488 (5th Cir. 1994) (quoting Shipes v. Trinity Indus., 987 F.2d 311, 320 (5th Cir. 1993)); see also Hensley, 461 U.S. at 434 n.9. Double counting those four Johnson factors may occur only "in rare and exceptional circumstances." Id.

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Under this framework, the lodestar amount is presumed to represent a reasonable fee but may be adjusted up or down based on § 330(a) or Johnson. Pilgrim's Pride, 690 F.3d at 659 (citing Fender, 12 F.3d at 487). "[T]hough the factors considered under Johnson, the 'Lodestar' ap- proach and Section 330 of the Bankruptcy Code are not identically termed, there is a sense of harmony between them and a court need not pick one over the others." In re E. Peoria Hotel Corp., 145 B.R. 956, 962 (Bankr. C.D. Ill. 1991).

In addition to fees, a professional may be reimbursed for "actual, necessary expenses." 11 U.S.C. § 330(a)(1)(B). "Expenses are deemed 'actual' when they are in fact incurred rather than based upon guesswork, formula or pro rata allocation [and] are 'necessary' if they were properly required to accomplish the task for which the professional was employed." 3 COLLIER ON BANK- RUPTCY ¶ 330.04[1] (16th ed. 2025). The same factors enumerated in § 330(a)(3) for the reason- ableness of compensation for services are applicable to the reimbursement of expenses. Compensation awarded under § 330 is an administrative expense. 11 U.S.C. § 503(b)(2) As such, § 330(a) compensation enjoys a high priority in the distribution pecking order—second on- ly to secured claims. 11 U.S.C. §§ 507(a)(2), 726(a), 1129(a)(7).

The Court begins by examining the reasonableness of the fees and expenses requested by JW before turning to the Trustee's compensation.

C. JW's Fees

According to the JW Final Fee Application, 61 attorneys, twenty paralegals, an undisclosed number of summer associates, one unnamed practice support analyst, and one library research assistant logged 20,043.60 hours in the Bankruptcy Case.¹¹¹(STP-132 at 57-59; Dkt. #3524 at

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70, 144). In the JW Final Fee Application, JW seeks final approval of fees already paid on an interim basis, fees billed but unpaid, estimated fees, and a "fee enhancement."¹¹²Specifically, for work performed from January 2, 2014 through March 31, 2023, JW seeks final approval of $5,500,697¹¹³in paid interim fees; for services rendered from April 1, 2023 through June 27, 2023, $90,029 in unpaid fees; and for work expended from June 28, 2023 through the closing of the Bankruptcy Case on November 16, 2023, $119,338.50 in estimated fees.¹¹⁴(STP-132). JW also requests $920,000 as a "fee enhancement," which is about 16% of JW's requested compen- sation.¹¹⁵(STP-279 at 15). In total, JW asks the Court to approve $5,802,064.50 in fees.¹¹⁶JW attributes the magnitude of its fee request to the novelty and complexity of the legal issues the Trustee faced and to the level of alleged disruption and obstruction perpetrated by Dr. Edwards. As a preliminary matter, the Court notes that the fees already paid JW on an interim basis pursuant to § 331 are subject to the same review and scrutiny as the unpaid, estimated, and "rate restoration" fees that JW requests. Evangeline, 890 F.2d at 1322 ("Interim fee awards are not fi- nal determinations intended to put a matter to rest. Rather, they are interlocutory and reviewable, and are intended only to provide some interim relief from the economic hardships of subsidizing litigation."); In re Anolik, 207 B.R. 34, 38 (Bankr. D. Mass. 1997); In re Taxman Clothing Co., therefore, they are not included in these totals. Also, the hours logged do not include hours related to JW's estimated fees. (STP-132 at 57-58).

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49 F.3d 310, 312 (7th Cir. 1995) ("all interim awards of attorney's fees in bankruptcy are tenta- tive") (citations omitted); 3 COLLIER ON BANKRUPTCY ¶ 331.04[3] (16th ed. 2025) ("Any amounts that were awarded as interim compensation are subject to reconsideration at any time prior to the final award, for any reason."). As a result, this Court is not bound by the interim fee orders of its predecessors and all fees, including those already paid JW, are subject to this Court's review and possible disgorgement.

1. EFP/EFT's Objection to JW's Fees

EFP/EFT object to the reasonableness of both JW's hourly billing rates and the number of hours expended. In summary, they assert that JW's hourly billing rates for its attorneys, even though purportedly "discounted," exceed the market rate for comparable work in this judicial district. They contest the reasonableness of any billing rate higher than $450 per hour for attor- neys, except for Restrepo's.¹¹⁷They oppose payment of $920,000 as a "fee enhancement" or a

"rate restoration" via their argument that JW's hourly billing rates in excess of $450 are unrea- sonable. (Dkt. #3530 at 10-12). EFP/EFT also complain about the $358.01 blended hourly rate billed for De Leon's time from August 2022 through November 2022. (STP-279 at 79). Alt- hough her rate is below $450, EFP/EFT balk at paying $358.01 per hour for work performed by a 2021 law graduate.¹¹⁸

EFP/EFT also object to the reasonableness of the hours expended. Specifically, they object to the payment of fees for any work performed by JW after March 2015¹¹⁹or, in the alternative, for any work performed confirming the Joint Plan after March 2023 to the extent fees and expenses

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exceed the $75,000 holdback provision. In addition, EFP/BHT incorporate their previous objec- tions to JW's Amended Second and Third Fee Applications and assert objections to specific time entries in JW's Fourth through Final Fee Applications.¹²⁰Finally, they object to payment of any

"estimated" compensation. EFP/EFT's objections, if sustained, would require JW to disgorge most of the fees and expenses already paid by the estate on an interim basis.

2. UST Final Fee Objection

In the UST Final Fee Objection, the UST contests payment of any "estimated" compensation for any period before the confirmation of the Joint Plan. (STP-283). He also questions whether JW charged half-rate or half-time for all travel and opposes any "fee enhancement."

Before Trial, JW provided the UST (but did not file on the docket or share with EFP/EFT or the Court) its actual invoices for the period covered by its estimated fees. That exchange resolved the UST's objection to payment of "estimated" compensation, but not EFP/EFT's. During Trial, the UST resolved his other objections as memorialized in an order entered on June 17, 2024. (STP-347; Dkt. #3500). Pursuant to that order, JW agreed to reduce three hours from the time expended preparing for and attending the confirmation hearing for a reduction in fees of $1,320 and twelve hours expended for preparing the JW Final Fee Application by twelve for a reduction in fees of $5,813. JW also agreed to cut travel time by half. That reduction totals $21,952.25 across nine interim fee applications. In addition, JW specifically agreed not to seek a fee enhancement as a "bonus" as articulated in ASARCO, LLC v. Jordan Hyden Womble Cul- breth & Holzer, PC (In re ASARCO, LLC), 751 F.3d 291, 297 (5th Cir. 2014), aff'd, Baker Botts LLP v. ASARCO LLC, 576 U.S. 121 (2015). (Dkt. #3530 at 6). The UST, in turn, agreed not to

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"object to Jones Walker requesting from the Court an adjustment of the market rates to be ap- plied under 11 U.S.C. § 330(a)(3)(B) of the Bankruptcy Code in calculation of the lodestar anal- ysis and in consideration of the applicable Johnson factors." (Dkt. #3500 at 3).

3. Lodestar: Hourly Billing Rates

Billing rates are a component of the lodestar method used for determining the reasonableness of attorneys' fees. Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542 (2010). The lodestar is calcu- lated by multiplying the prevailing market rate in the relevant community by the number of hours an attorney would reasonably expend handling the matter. Huffman v. Legal Helpers Debt Resolutions, LLC (In re Huffman), Case No. 12-00099-NPO, 2014 WL 1767694, at *3 (Bankr. S.D. Miss. May 2, 2014). The hourly rates of professionals hired under § 327, unlike those re- tained under § 328, are scrutinized at the final fee application stage rather than at the time of their employment.

"Reasonable" hourly rates are "calculated according to the prevailing market rate in the rele- vant community." Blum v. Stenson, 465 U.S. 886, 895 n.11 (1984). The "prevailing market rate"

is the rate "prevailing in the community for similar services by lawyers of reasonably compara- ble skill, experience and reputation." Id. (emphasis added).

The Fifth Circuit has indicated that a court may define "relevant community" to mean the judicial district where the court sits except "in the unusual case where out-of-district counsel are proven to be necessary to secure adequate representation." McClain v. Lufkin Indus., Inc., 649 F.3d 374, 383 (5th Cir. 2011). That a given rate is reasonable in one judicial district does not make it reasonable in another district because "the attorneys' fees calculus is a fact-intensive one and its character varies from case to case." Hopwood v. Texas, 236 F.3d 256, 281 (5th Cir. 2000).

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The Supreme Court has recognized the inherent difficulty in determining an appropriate mar- ket rate for a lawyer's services. In view of that inherent difficulty, the fee applicant bears the burden "to justify the reasonableness of the requested rate or rates." Blum, 465 U.S. at 895 n.11. In general, a fee applicant establishes "the reasonable hourly rate for a particular community .

. . through other attorneys practicing there." Tollett v. City of Kemah, 285 F.3d 357, 368 (5th Cir. 2002). The Fifth Circuit has recognized that federal judges are themselves experts in assessing matters of attorney fees. Davis v. Bd. of School Comm'rs of Mobile Cnty, 526 F.2d 865, 868 (5th Cir. 1976). But "[t]he hourly fee awarded must be supported by the record; the district court may not simply rely on its own experience in the relevant legal market to set a reasonable hourly bill- ing rate." McClain, 649 F.3d at 383 (citing League of United Latin Am. Citizens # 4552 v. Ros- coe Indep. Sch. Dist., 119 F.3d 1228, 1234 (5th Cir. 1997)).

a. JW's Hourly Billing Rates

In this Bankruptcy Case, JW charged hourly billing rates for both local and out-of-district attorneys ranging from $210 to $750 over nine years. Of the 61 attorneys who billed for work, only eleven charged hourly rates higher than $450:

Hourly Billing Rates More than $450 by Fee Application Fee Application Attorney Hourly Billing Rate

JW Second (STP-111 at 384) Daniel A. Restrepo $750.00 JW Third (STP-112) None $0.00

JW Fourth (STP-113 at 308) Patrick Vance $475.00 JW Fifth (STP-114 at 137) Patrick Vance $475.00 JW Sixth (STP-115 at 136-37) Patrick Vance $475.00 Ivan J. Reich $500.00 JW Seventh (STP-116 at 69) Patrick Vance $476.67 John F. Fletcher $468.75 JW Eighth (STP-117 at 75) Patrick Vance $495.00 John F. Fletcher $475.00 JW Ninth (STP-118 at 56) Patrick Vance $495.00 John F. Fletcher $475.00 JW Tenth (STP-119 at 20) John F. Fletcher $485.00

JW Eleventh (STP-120 at 30) John F. Fletcher $495.00 JW Twelfth (STP-121 at 34) John F. Fletcher $495.00

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JW Thirteenth (STP-122 at 36) John F. Fletcher $527.14 JW Fourteenth (STP-123 at 31) John F. Fletcher $540.00 JW Fifteenth (STP-124 at 57) John F. Fletcher $540.00 John F. Fletcher $561.67

JW Sixteenth (STP-125 at 43) Mark A. Mintz $500.00 Kristina Johnson $492.14

JW Seventeenth (STP-126 at 23) John F. Fletcher $565.00 Patrick Vance $495.00

JW Eighteenth (STP-127 at 39) John F. Fletcher $565.00 Kristina Johnson $452.92

JW Nineteenth (STP-128 at 32) Laura Ashley $460.00 John F. Fletcher $605.00 Donald W. Washington $720.00

JW Twentieth (STP-129 at 23) M. Richard Schroeder $650.00 John F. Fletcher $605.00 Jeffrey R. Barber $472.00

JW Twenty-First (STP-130 at 31) Jeffrey R. Barber $478.83 JW Twenty-Second (STP-131 at 59-60) Curtis R. Hearn $705.00 Jeffrey R. Barber $489.33 JW Final (STP-132 at 27) John F. Fletcher $650.00 Jeffrey R. Barber $490.00 Of the eleven attorneys who billed over $450 per hour in the above table, six were specialized:

Specialized Attorneys Hourly Billing Rates More Than $450 Attorney Office Area of Hourly Total Hours Location Expertise Billing Rate Expended Total Fees

Daniel A. Restrepo Washington, D.C. Government Relations $750.00 7.40 $5,550.00 Ivan J. Reich Miami, FL Corporate Law $500.00 3.20 $1,600.00 John F. Fletcher Jackson, MS State Tax Law $375.00-$650.00 95.00 $39,247.00 Donald W. Washington Lafayette, LA Corporate Law $720.00 0.80 $576.00 M. Richard Schroeder New Orleans, LA Corporate Law $650.00 0.40 $260.00 Curtis R. Hearn New Orleans, LA Corporate Law $705.00 9.50 $6,697.50 The remaining five attorneys who charged more than $450 per hour include a core group of three bankruptcy attorneys—Barber, Mintz, and the Trustee (Johnson)—who combined logged 8,639.60 hours. Two other bankruptcy attorneys—Patrick Vance ("Vance") and Laura Ashley ("Ashley")—also billed the estate more than $450 per hour but only for a limited period as shown in the table below:

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Bankruptcy Attorneys Hourly Billing Rates More Than $450 Total Hours Total Fees

Attorney Hourly Expended at Incurred at Billing Rate Hourly Billing Rate Hourly Billing Rate More than $450.00 More Than $450.00

Jeffrey R. Barber $472.00-$490.00 244.20 $118,336.00 Mark A. Mintz $500.00 33.10 $16,550.00 Trustee $452.00-$492.14 466.50 $225,010.00 Patrick Vance $475.00-$495.00 28.10 $12,637.00 Laura Ashley $460.00 0.90 $414.00

Barber's hourly rate did not reach $450 until December 1, 2021 and did not surpass $450 un- til April 1, 2022. He charged $472.13 per hour for the period from April 1, 2022 through July 31, 2022 (STP-129); $478.83 per hour for the period from August 1, 2022 through November 30, 2022 (STP-130 at 31); $489.33 per hour for the period from December 1, 2022 through March 31, 2023 (STP-131 at 60); and $490 per hour for the period from April 2023 through November 2023 (STP-132 at 27).

Mintz's hourly rate climbed from $450 to $500 and the Trustee's rate increased from $450 to $492.14 during the period from December 1, 2020 through March 31, 2021 in the JW Amended Sixteenth Fee Application but for some unknown reason, both rates returned to $450 or less in all subsequent fee applications. (STP-125 at 42; see e.g., Dkt. #2900 at 23). In 2023, Mintz's hourly rate was $450, and the Trustee charged $447.68. (STP-132 at 45).

Vance's hourly rate was $450 from the onset of his involvement in the Bankruptcy Case in 2014 and rose to his highest billing rate of $495 in 2018 in the JW Ninth Fee Application. (STP- 118 at 56). His billings appear in the JW First through Ninth Fee Applications and in the JW Eighteenth Fee Application. Ashley's hourly rate rose to $460 per hour in 2022 for the period covered in the JW Nineteenth Fee Application, but her total time billed at that rate was less than one hour and she provided no additional services after 2022. (STP-128). De Leon, who became a member of the Louisiana Bar in 2021 and served as a law clerk to a

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bankruptcy judge, billed at a weighted average of $358.01 per hour in the JW Twentieth-First Fee Application, and $376.32 in the JW Twenty-Second and Final Fee Applications.

b. Analysis of Hourly Rates Charged in this Bankruptcy Case

EFP/EFT ask this Court to adopt as reasonable an hourly rate no more than $450 for any JW attorney and no more than $250 for De Leon, an associate. In contrast, JW argues that the rates it charged, ranging from $210 to $750, were well below market and should now be increased ex post facto as a "rate restoration."

(1) CHFS's Prior Counsel Charged the Estate $140-$275 Per Hour.

The Court begins its analysis by reviewing the rates of CHFS's original counsel. Before the Trustee's appointment, Henderson represented CHFS as its general bankruptcy counsel and Wells Marble, as its special counsel. (Dkt. #52, #76). For services rendered from May 23, 2012 through December 28, 2013, Henderson, a solo practitioner and experienced bankruptcy attor- ney, charged the estate $275 per hour. (STP-181). For services rendered from May 2, 2013 through October 31, 2013, Wells Marble billed the estate $240 per hour for services provided by Roy H. Liddell, a partner, and $140 per hour for work performed by Jonathan Bissette, an asso- ciate. (STP-174, -177). The first bankruptcy judge issued separate orders awarding Henderson and Wells Marble their requested fees.¹²¹(Dkt. #1227, #1272). Their hourly billing rates as coun- sel for the debtor in possession, which were in place at the time of the Trustee's appointment, were significantly less than JW's "discounted" rates.¹²²Granted, Henderson and Wells Marble were not operating CHFS's loan-servicing business, but their hourly rates ($140-$275) were sig-

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nificantly lower than JW's "discounted" hourly rates ($210-$500) for similar legal services.¹²³ The Court now moves to its determination of whether the hourly rates charged in JW's fee appli- cations were reasonable and within the prevailing market rate.

(2) Craig M. Geno's Testimony

As its expert witness, JW called Craig M. Geno ("Geno"), a "single shingle" who has prac- ticed bankruptcy law for 43 years. (Dkt. #3527 at 99-100, 131, 286). Geno testified that he most- ly represents debtors-in-possession in chapter 11 cases and sometimes chapter 7 trustees and chapter 11 unsecured creditors' committees but has never represented a chapter 11 trustee. (Dkt. #3527 at 263-64). He is a regular speaker at the Mississippi Bankruptcy Conference, the Ameri- can Bankruptcy Institute, and the ABI Southeastern Bankruptcy Institute. (Dkt. #3527 at 105). He is certified in business bankruptcy law and a board member of the American Board of Certi- fication. (T-45; Dkt. #3527 at 106). He is a fellow in the American College of Bankruptcy. Geno testified that he has handled more chapter 11 cases than any other Mississippi bankruptcy law- yer, and when asked if he was aware of any other bankruptcy lawyer who has logged more hours practicing bankruptcy law, Geno replied, "I hope not." (T-45; Dkt. #3527 at 111). Geno is well known and well regarded among the bench and bar. Without objection, Geno was accepted as an expert in the areas of bankruptcy practice, litigation, estate administration, trustee compensation, and estate professional compensation. (Dkt. #3527 at 112).

Geno testified that his hourly billing rate from 2015 to 2023 ranged from $375 to $550, as follows:

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Year Hourly Billing Rates 2015 $375-$425

2018 $375-$425

2019 $400-$425

2020 $400-$425

2021 $400-$450

2022 $450-$475

2023 $500-$550

(Dkt. #3527 at 249-51). He also testified that in 2014, an hourly billing rate of $450 was ap- proved in In re Natchez Regional Medical Center, Case No. 14-01048-NPO (Bankr. S.D. Miss. July 22, 2014), Dkt. #349, a chapter 9 case. (Dkt. #3527 at 203). Geno opined that the hourly rates charged by JW and the Trustee in their interim fee applications were reasonable. He specif- ically testified that Barber's hourly rates of $472.13 in 2022 and $490 in 2023 were reasonable. (Dkt. #3527 at 191-94). Throughout his testimony, Geno's vast experience in handling chapter 11 bankruptcy cases and his knowledge of the local legal market was evident and undisputed. The Court found his testimony to be credible, unbiased toward either side, and straightforward.

(3) Christopher R. Maddux's Testimony

Christopher R. Maddux ("Maddux"), who has practiced bankruptcy law since 2002, was called by JW as a fact witness—not as an expert. He testified that after graduating from Vander- bilt Law School in 1999, he practiced law as a solo practitioner in Memphis, Tennessee. (Dkt. #3530 at 16). In 2002, he began working at Phelps Dunbar LLP in the area of bankruptcy re- structuring, and in 2010, moved to Butler Snow LLP ("Butler Snow"), one of the largest firms in the Jackson, Mississippi area. He has represented both debtors and creditors in chapter 11 cases. In 2016, he became the chair of Butler Snow's business department, and in 2020 became the firm chair/managing partner, a role that he continues to hold. In his administrative role at Butler Snow, Maddux establishes the firm's hourly billing rates with the assistance of a strategic pricing

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director and input from the department chairs. (Dkt. #3530 at 18). He explained that Butler Snow participates in Financial Insights, a service provided by Thomas Reuter that grants Butler Snow access to the average hourly billing rates of other southeastern peer firms.¹²⁴ Maddux said that every attorney at Butler Snow has four rates: an international rate; an "A"

rate for national or regional cases; a "B" rate or standard rate; and a "C" rate for "local geogra- phies." He produced a chart showing the "C" rates of Butler Snow's team of bankruptcy law- yers—himself, Steve Rosenblatt, and James (Jeb) Bailey—from 2014 through 2023. (T-48). Maddux testified that in all cases since September 1, 2013, Butler Snow's bankruptcy practitioners have charged "C" rates, their lowest rates, in this judicial district. (Dkt. #3530 at 23, 35-36, 60-61).

Based on the "C" rates in the chart, Maddux charged hourly rates for bankruptcy work in this judicial district ranging from $330 to $520 from 2014 to 2023 and began billing an hourly rate of $450 in 2020. Specifically, in 2014, Maddux charged $330 per hour and Rosenblatt $440 per hour in In re Mississippi Phosphates Corp., Case No. 14-51667-KMS (Bankr. S.D. Miss. Oct. 27, 2014). In 2016, Maddux charged $385 and Rosenblatt $490 in In re Opus Management Group Jackson, LLC, Case No. 16-00297-NPO (Bankr. S.D. Miss. 2016). (Dkt. #3527 at 203). In 2017, Maddux charged $400 and Rosenblatt, $505 in In re Franchise Services of North America Inc., Case No. 17-02316-EE (Bankr. S.D. Miss. June 30, 2017).

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Maddux's testimony about how Butler Snow internally sets its rates is not determinative of the market rate, but his testimony about the rates that Butler Snow actually charged in Mississip- pi Phosphates, Opus Management Group, and Franchise Services was helpful and showed that Butler Snow's rates were consistent with the rates charged by JW in its fee applications. In this regard, Exhibit T-48 indicates that Maddux's rates rose to $450 per hour in 2020, the same year that JW rates reached that amount. However, JW's attempt to use this chart to show that Butler Snow charged higher rates thereafter was ineffective because it appears to reflect hourly billing rates that were never actually billed and approved under § 330, given that: Maddux limited his practice of law after 2019 when he became the firm chair (Dkt. #3530 at 53); James E. Bailey is not licensed to practice law in Mississippi (Dkt. #3530 at 48-49); and Rosenblatt retired in 2022. (Dkt. #3530 at 47).

Maddux was a credible and forthright witness, and his testimony supports a finding that the rates actually charged in JW's fee applications are reasonable and within market range for simi- lar work performed by others of similar experience.

(4) EFP/EFT's Objection to Hourly Billing Rates More Than $450 Is Overruled.

JW's billing rates for its core bankruptcy team did not exceed $450 per hour until 2021 with the exception of one earlier billing cycle in 2020. Barber's highest rate was $490, the Trustee's, $500, and Mintz's, $500. (STP-132 at 27; Dkt. #2865 at 41-42). Two other attorneys with no specialty other than bankruptcy law, Ashley and Vance, billed hourly rates more than $450 but only for a limited time. Ashley billed hourly rates ranging from $250 to $460 per hour, but less than one hour of her time was billed at $460 per hour. (Dkt. #2985 at 64). All other work per- formed by Ashley was billed at rates ranging from $250 to $375 per hour. Vance billed at a

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range of $450 to $495 per hour, but his time during the entirety of the Bankruptcy Case totaled only 23.10 hours. (STP-132 at 57). Geno testified that he knew Vance well and considered him to be one of the top bankruptcy lawyers in the country. (Dkt. #3527 at 179-80). The Court finds that Vance's and Ashley's rates gradually exceeded $450 per hour because of annual increases and these increases were not so large as to render the rate excessive in this judicial district for services performed from 2014 to 2023 in this Bankruptcy Case.

As for the other JW attorneys, EFP/EFT do not object to Restrepo's $750 hourly billing rate, and the Court finds that his Washington, D.C. rate was reasonable for the services he provided to the estate. The Court has reviewed the time entries of the other specialists who billed at an hourly rate higher than $450 and finds that circumstances also justify their billing rates. Geno convinc- ingly testified that these attorneys were experts in particular fields and filled specific and mostly non-recurring roles. (Dkt. #3527 at 183-34, 191). The biographies attached by JW to its interim fee applications confirm their areas of expertise. Fletcher, for example, holds an LLM in taxation from New York University and lectures frequently on tax matters. (Dkt. #3527 at 184-85). The total hours these specialists billed and the fees they charged the estate over nine years, with Fletcher being the sole exception because of the estate's recurring tax issues, were not signifi- cant. Even assuming that their rates were higher than the local market rate, this Court neverthe- less approves them because the specialized skills they provided were necessary and benefited the estate. EFP/EFT's objection is overruled.

(5) EFP/EFT's Objection to De Leon's Hourly Billing Rate Is Sustained.

Although De Leon's billing rates are less than $450, EFP/EFT argue that her rates as a new associate are too high. (Dkt. #3089). In an attempt to justify her $350 per hour rate, Barber testi-

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fied that her prior experience as a bankruptcy law clerk allowed her to "hit the ground running".

(Dkt. #3524 at 64). JW, however, provided no testimony as to what a reasonable rate for a 2021 law graduate should be. (Dkt. #3524 at 64). The Court finds that her $350 per hour billing rate is unreasonably high for her level of experience in this district¹²⁵and should be reduced to $250 per hour.¹²⁶This reduction totals $22,849, as shown in the table below:

Fee Application Requested Fees Allowed Fees Reduction

JW Twenty-First Fee Application $6,480 $4,525 $1,955 JW Twenty-Second Fee

Application $62,244 $41,350 $20,894

TOTAL $68,724 $45,875 $22,849 De Leon also incurred $23,636 in "estimated" fees in the JW Final Fee Application. Those fees are not included in the chart above because they are estimated and disallowed in their entirety for the reasons discussed below. EFP/EFT's objection to her hourly billing rate is sustained.

(6) EFP/EFT's Objection to a Rate Restoration Is Sustained.

In the JW Final Fee Application, JW sought a "fee enhancement"¹²⁷of $920,000. (STP-132 at 12; Dkt. #3521 at 29). At Trial, JW declared that it would no longer seek a "fee enhancement"

but a "rate restoration" as part of a request for an upward adjustment under § 330(a)(3)(B). (Dkt. #3530 at 6-7). This mid-Trial course change did not alter JW's request for additional fees of $920,000.

In support of the "rate restoration" argument, JW's argues that it charged the estate hourly

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billing rates that were 20% lower than the firm's "standard" hourly rates. (Dkt. #3528 at 36-37). In its 2014 employment application, JW specified hourly rates ranging from $220 to $450, which were "subject to annual adjustments in the normal course of JW's business to reflect economic and other conditions and these adjustments are usually made effective January 1 of each calendar year." (STP 66 at 4-5). The invoices attached to the fee applications reflect numerous rate in- creases over nine calendar years. For example, for the period from 2014 to 2023, Barber's hourly rate increased from $340 to $490, and the Trustee's hourly rate increased from $340 to $450. The Trustee, who was personally responsible for setting the bankruptcy group's hourly rates from 2012 to 2020, testified that she believed the firm's "discounted" hourly rates, even with the an- nual increases, were lower than the prevailing market rate. (Dkt. #3528 at 37). JW explained in the JW Final Fee Application that it had calculated the $920,000 fee en- hancement "based on less than 50% of the blended difference between the Firm's standard hour- ly rates at retention and the discounted rates charged in the case." (STP 132 at 62). Somewhat confusingly, JW also alleged in the JW Final Fee Application that it was "not seeking to restore:

(a) time voluntarily or involuntarily reduced; or (b) expenses voluntary or involuntarily reduced"

and was "not assessing standard rates as part of the Estimated Fees." (STP-132 at 62). The prob- lem with the explanation in the JW Final Fee Application is that it did not say what it alleged the

"restored" market rates to be. JW attempted to clarify the confusion at Trial. On the first day of Trial, Barber testified that $920,000 represented half the difference be- tween the firm's discounted and standard rates. (Dkt. #3524 at 181-82). The firm's comptroller multiplied the total hours that JW expended on the Bankruptcy Case through July 11, 2023 (the date Barber happened to request the information) by the weighted standard hourly billing rate for

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each timekeeper. (Dkt. #3524 at 181-82; Dkt. #3525 at 14-35). The difference between that number and the discounted fees actually charged the estate was about $1,800,000. (T-30). JW knew that the number was too high because it included fees that had been previously disallowed. (Dkt. #3525 at 134). Rather than calculating the number with a "fine-tooth" comb by subtracting all disallowed fees, JW reduced $1,800,000 by half to arrive at $920,000. (Dkt. #3525 at 134). Barber testified, "I'm the first one to recognize that $920,000 may not be a full restoration" (Dkt. #3525 at 134), and "[w]e think we could have asked for more." (Dkt. #3525 at 112). On the second day of Trial, Barber further testified that "fee enhancement" was a "bad choice" of words and in reality, the JW seeks a rate restoration—an upward adjustment of its hourly billing rates. (Dkt. #3525 at 133-35).

On the seventh day of Trial, JW announced that it had reached an agreement with the UST:

"the UST's objection to the Jones Walker Final Fee Application regarding a fee enhancement as a bonus is sustained as to the requirements for a fee enhancement under ASARCO, LLC v. Jordan Hyden Womble Culbreth & Holzer, PC (In re ASARCO, LLC)." (Dkt. #3530 at 6-7; Dkt. #3500). The Court rejects JW's rate restoration argument for the reasons discussed below. JW's abandonment of a "fee enhancement" in favor of a "rate restoration" theory altered the firm's legal basis for its request.¹²⁸In the JW Final Fee Application, JW had touted the results it helped the Trustee achieve in the Bankruptcy Case,¹²⁹arguing that the firm had assisted the Trus-

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tee in collecting over $30 million for the estate¹³⁰

in a complex case that involved multi- disciplinary issues. (STP-132 at 63-65). At Trial, JW pivoted from this argument and attempted to justify additional fees of $920,000 as a rate restoration under lodestar. (STP-132 at 63-65). JW now asks this Court to "restore" by half the firm's self-described "discounted" rates, which it contends are 20% less than its standard rates, to match what it believes were the market rates charged by other professionals at the time. (Dkt. #3521 at 29; Dkt. #3526 at 20; Dkt. #3528 at 35). Granting JW's request would result in substantial additional fees ($920,000) awarded at the backend of this Bankruptcy Case and a de facto modification of the final order approving JW's employment.¹³¹The overarching theme of JW's request for higher hourly rates is that it now regrets its decision to represent the Trustee at a "discount." In other words, JW argues that the hourly billing rates it disclosed at the onset of its employment were too low. JW, however, voluntarily proposed those "discounted" rates when it filed its employment application. The Trustee testified that she discussed JW's representation of the estate with Barber and other mem- bers of the firm's management team and JW made a business decision to accept the engagement at the hourly rates disclosed in its employment application. (Dkt. #3528 at 36-37; Dkt. #3529 at

47). If JW did not want to bill the Trustee at those rates, it could have declined the employment or asked for different terms. It didn't. What JW did do is incrementally raise its hourly rates eve- where the accomplishments achieved were outstanding. Pilgrim's Pride, 690 F.3d at 666 n.20 (declining "to defini- tively answer whether fee enhancements may ever be awarded when one or more creditors has not received 100 cents on the dollar"); Rose Pass Mines, Inc. v. Howard, 615 F.2d 1088, 1090 (5th Cir. 1980) (16% increase in fees due to the "excellent services" producing an "unusually good result," namely in the form of a 100% dividend to all creditors); Lawler v. Teofan (In re Lawler), 807 F.2d 1207, 1213-14 (5th Cir. 1987) (enhancement awarded for transforming a no-asset estate into a $29 million estate with full payment to all creditors); ASARCO, 751 F.3d at 298-99; In re El Paso Refinery, LP, 257 B.R. 809, 835-36 (Bankr. W.D. Tex. 2000).

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ry year but one.¹³²Even with these annual raises, JW complains that its hourly rates were below the market rate—its decision.

When JW became concerned that it was "run[ning] the risk of taking a loss" because of liti- gation over the firm's interim fees, it began adding a footnote to the interim fee applications, be- ginning with the JW Fourth Fee Application, "reserv[ing] the right . . . to introduce evidence at the final hearing on our standard rates." (Dkt. #3524 at 24; STP-113 at 27 n.22). This reservation language is of no moment to the Court. Inserting a footnote that JW may introduce evidence of its "standard" hourly rates at the final fee Trial does not lessen its burden in establishing that its requested increased rates are within the prevailing market rate in this judicial district and is not a modification of the firm's approved retention rate. Any suggestion that this footnote constituted adequate notice of JW's intent to seek $920,000 as a rate restoration is unavailing because it failed to state what their "standard" rates were. When retained by the Trustee in 2014, JW deter- mined what rates it would accept, and the final order of employment remained unchanged throughout the Bankruptcy Case without any attempted amendment by JW.

(a) Antonella Montagna's Testimony Does Not Support a Rate Restoration.

To establish facts supporting a rate restoration in this Bankruptcy Case, JW presented the tes- timony of its current pricing manager, Antonella Montagna ("Montagna"). (Dkt. #3526 at 13-14,

64). Montagna graduated from Georgetown University Law Center in 2014 and received a mas- ter's degree in business administration from the University of Miami. She is not licensed to prac- tice law. She began working at JW in 2019, about five years after JW agreed to represent the Trustee in this Bankruptcy Case. (Dkt. #3256 at 14, 66). Before her employment at JW, she

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worked as a pricing manager/pricing strategist for law firms in Chicago. (Dkt. #3526 at 14). Her job duties at JW require her to help the firm set hourly rates. (Dkt. #3526 at 34). At Trial, Montagna presented a chart of "paid amounts," "worked amounts," and "applied- for" amounts in this Bankruptcy Case through June 27, 2023.¹³³(T-25; Dkt. #3526 at 18). She explained that "worked" amounts represented the "raw effort" expended and "applied-for"

amounts represented fees that JW actually asked the Court to award. The difference between worked hours and applied-for hours totaled 1,414.59. According to Montagna, those hours con- sist of voluntary and involuntary reductions.¹³⁴(Dkt. #3526 at 75). A different chart prepared by Montagna provides details of the hours actually worked by each timekeeper through June 27, 2023. (T-26). The chart shows each timekeeper's fees at a

"discounted" versus "standard" rate.¹³⁵Another chart prepared by Montagna shows JW's total fees through July 11, 2023 at "billed" and "standard" rates. (T-30). The difference is $1,840,317, which Barber halved to reach $920,000. A fourth chart prepared by Montagna shows the applied- for hours by each timekeeper, and their fees at the discounted versus standard rate. (T-27). Bar- ber's applied-for hours, for example, totaled 4,400. (Dkt. #3527 at 27-28). Another chart pro- vides a work value analysis using the total hours invested by each timekeeper and the total fees applied for. (T-31). According to that chart, the Trustee's "worked rate" was $236.42 although that rate was never actually charged the estate. (T-31; Dkt. #3526 at 62, 85, 87). Montagna prepared a fifth chart that provides an inflation analysis of applied-for hours from

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2014 to 2023 using index values, including the Consumer Price Index ("CPI"), which measures the change in prices for goods and services for consumers, and the Producer Price Index ("PPI"), which measures the price change over time for lawyers. (T-29). Montagna adjusted the hourly rates by year using these inflation indexes. In 2019, for example, Barber's applied-for hours to- taled 30.60, and he charged the estate fees of $11,934. A CPI adjustment, according to Monta- gna, would increase his fees to $13,994.30, and a PPI adjustment, to $14,989.72. (T-29 at 10). The Court declines to award a rate restoration based on an inflation calculator. As recognized in Blum, rates for attorney services differ from "prices of commodities and most services," which

"are determined by supply and demand." Blum, 465 U.S. at 895 n.11. Rates based on an index derived from national data is not helpful to the inquiry. See Segovia v. Fuelco Energy LLC, Case No. SA-17-CV-1246, 2024 WL 1161730, at *9 (W.D. Tex. Mar. 18, 2024). JW must show that its rates are reasonable in the relevant community. The Court agrees with the UST that neither the Supreme Court nor the Fifth Circuit has "nationalized" attorneys' fees in federal court, which is what JW advocates by relying on a national inflation calculator in support of a rate increase. (Dkt. #3340 at 4 (citing ASARCO, 751 F.3d at 297)). Montagna testified that JW sets rates higher for bankruptcy attorneys because bankruptcy law is "a more nationally uniform practice" and

"the demand for their services tends to be less price sensitive because there's few[er] of them."

(Dkt. #3526 at 16).

The Court is unconvinced that the rates that JW describe as "standard" or "customary" are sufficiently standardized to raise a presumption as to their reasonableness. Islamic Ctr. of Miss., Inc. v. City of Starkville, 876 F.2d 465, 469 (5th Cir. 1989). What JW internally calls its "stand- ard" rates has no bearing on what this Court determines to be a range of reasonable hourly billing

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rates in this community for similar services. See Lawler, 807 F.2d at 1211 (describing "prevail- ing hourly rate in the community for similar work" as a component of the lodestar analysis). Montagna was not an expert on attorney compensation in this market. Her testimony provid- ed an insider's view as to how JW sets the hourly billing rates of its attorneys but was not helpful in determining the community rate for attorneys performing similar work in this judicial district.

(b) JW's Voluntary/Involuntary Fee Reductions Do Not Warrant a Rate Restoration.

Next, JW complains that it reduced the amount of its fees both voluntarily and involuntarily. (STP-132 at 39, 49-50). In the Cumulative Interim Fee Order issued in 2017, the second bank- ruptcy judge capped the hourly billing rate of legal assistants at $155. JW billed that same rate for legal assistants throughout the Bankruptcy Case. (Dkt. #3525 at 161-62). JW argues that $155 per hour is well below current prevailing market rates for legal assistants, but JW never sought Court approval to raise that rate, and there was no testimony as to what JW believed the market rates should be for the relevant time period. (STP-132 at 49-50; Dkt. #3526 at 15). Mon- tagna testified that the standard rate for paralegals in 2024 was $350, but EFP/EFT's relevancy objection to her testimony was sustained, as she did not know the standard rate for any of the years in question. Notwithstanding JW's complaints, the firm agreed not to seek more than $155 per hour for work performed by legal assistants. (Dkt. #3525 at 161-62; STP-132 at 62). At Trial, Barber estimated that JW had reduced its fee by approximately $203,000 over the life of the Bankruptcy Case. (Dkt. #3524 at 46-47). He testified that much of that work was ex- pended defending its interim fee applications against EFP/BHT's objections. That time is not compensable because the Bankruptcy Code does not allow the estate to pay a debtor's law firm

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for time spent defending fee applications.¹³⁶ASARCO, 576 U.S. at 135. Voluntary reductions are a component of good billing judgment, not a § 330 or Johnson fac- tor that could justify a higher hourly billing rate. In short, the Court declines to compensate JW for work that is not compensable by increasing the hourly rates for work that is compensable.

(c) JW's Reliance on Feilitech Is Incomplete.

As further support for its rate restoration request, JW argues that this Court should adopt as reasonable the hourly rates approved in In re Feilitech US LLC, Case No. 23-10599-SDM, 2023 WL 8855666 (Bankr. N.D. Miss. Dec. 21, 2023), a subchapter V case: $550-$600 for partners and $350-$400 for associates. Feilitech, 2023 WL 8855666, at *21; (Dkt. #3527 at 203-04; Dkt. #3528 at 44). Feilitech, US LLC ("Feilitech"), a furniture assembly company, filed a chapter 11 subchapter V bankruptcy petition. Feilitech employed Johnson (the Trustee in this Bankruptcy Case) and her firm (JW) as bankruptcy counsel. In the application, Feilitech agreed to pay JW its

"customary" 2022 rates: $650 per hour for Johnson, a range of $375 to $535 per hour for associ- ates, and $270 per hour for paraprofessionals. Feilitech, Case No. 23-10599-SDM, slip op. at 6 (Bankr. N.D. Miss. Feb. 28, 2023), Dkt. #11. No objection was filed, and the bankruptcy court approved the application under both § 327(a) and § 328(a).¹³⁷Feilitech, Case No. 23-10599- SDM, Dkt. #66.

In its first interim application for compensation, JW sought $30,825 in fees for 67.30 billing hours. The UST objected to Johnson's $650 hourly rate, arguing that it exceeded the average

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hourly rate of Mississippi bankruptcy attorneys. The prevailing hourly rates in that judicial dis- trict, according to the UST, ranged from $425 to $450 on the high end of the scale, and several Mississippi bankruptcy attorneys customarily charged only $200 to $350 per hour. The UST ar- gued that the Feilitech case did not rise to the necessary level of complexity to warrant Johnson's $650 hourly rate.

The Feilitech Court emphasized this dispositive fact: Johnson's $650 hourly rate had been preapproved under § 328 as part of JW's employment application. Donaldson Lufkin & Jenrette Secs. Corp. v. Nat'l Gypsum Co. (In re Nat'l Gypsum Co.), 123 F.3d 861, 862-63 (5th Cir. 1997) (holding that § 328 limits the power of a bankruptcy court to alter previously approved compen- sation). For that reason, her billing rate was not subject to § 330 or the Johnson factors; it could only be reduced if the rate "prove[d] to have been improvident in light of developments not ca- pable of being anticipated at the time." 11 U.S.C. § 328(a). Feilitech is but one case. But what about other chapter 11 and subchapter V cases where the debtor's counsel charged an hourly billing rate from only $200 to $475? For example:

Case Case No. Hourly Rate

In re Livingston Township Fund One, LLC 23-02573-JAW $350 In re V.B.H.R.E.S.B. Together, Inc. 24-00194-JAW $475 In re J.C. Contractors, Inc. 24-00787-JAW $200 In re Monticello Construction & Real Estate, LLC 24-00872-JAW $450 In re South Jefferson Apartments, LLC 24-01282-JAW $350 In re Oak Park Leasing, LLC 24-02157-JAW $450

In re Southern Point Planting Company, LLC¹³⁸ 25-00090-JAW $450 In re Samuel Dean Johnson & Lois M. Johnson 25-00133-JAW $475 In re Valley Park Elevator Inc. 25-00228-JAW $375 These cases were not mentioned by JW but clearly should have been to show the prevailing mar- ket rates in this district. These cases show that counsel for debtors are consistently charging un- der $500 per hour in 2024-2025 for chapter 11 work in this district.

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(d) JW's Chart of Hourly Billing Rates (Exhibit T-23) Is Not Persuasive.

At Trial, the Court asked JW to search the public docket of all local chapter 11 bankruptcy cases and report on the hourly billing rates approved in those cases. (Dkt. #3527 at 224-25). In response, the Trustee testified, "We've done that." (Dkt. #3527 at 224). She referred the Court to JW's Exhibit T-23, an eight-page chart that lists 78 hourly rates ranging from $225 to $1,950 billed by 65 estate professionals¹³⁹in fourteen chapter 11 and subchapter V cases:

In re Maritime Communications/Land Mobile LLC, 11-13463-NPO (Bankr. N.D. Miss.) In re MMD Hotel Corinth, LLC, 15-11167-JDW (Bankr. N.D. Miss.) In re Penick Produce Co., Inc., 17-11522-JDW (Bankr. N.D. Miss.) In re Tenrgys, LLC, 21-01515-JAW (Bankr. S.D. Miss.)

In re Crosthwait, 21-10391-JDW (Bankr. N.D. Miss.)

In re Haven Campus Communities-Starkville LLC, 21-10931-SDM (Bankr. N.D. Miss.) In re Express Grain Terminals, LLC, 21-11832-SDM (Bankr. N.D. Miss) In re United Furniture Industries, Inc., 22-13422-SDM (Bankr. N.D. Miss.) In re Mississippi Center for Advanced Medicine, P.C., 23-00962-JAW (Bankr. S.D. Miss.) In re Bison Land & Minerals, LLC, 23-01140-JAW (Bankr. S.D. Miss) In re EnTec Services, LLC, 23-01141-JAW (Bankr. S.D. Miss)

In re Feilitech US LLC, 23-10599-SDM (Bankr. N.D. Miss.)

In re Escambia Operating Co., LLC, 23-50491-JAW (Bankr. S.D. Miss.)¹⁴⁰ In re El Dorado Gas & Oil, Inc., 23-51715-JAW (Bankr. S.D. Miss) (T-23). The Court places little weight on JW's chart for three reasons. First, glaringly absent from Exhibit T-23 are the hourly billing rates of all estate attorneys in each listed case. For example, the chart includes the hourly rate of counsel for the official com- mittee of unsecured creditors in United Furniture Industries, Inc. ($450-$550) but omits the low- er hourly rate charged by Douglas C. Noble as counsel for the chapter 11 trustee ($425).¹⁴¹Case No. 22-13422-SDM (Bankr. N.D. Miss.); (Dkt. #3527 at 285). Another conspicuous omission

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are the hourly rates charged by debtor's local counsel in Tenrgys ($225-$300).¹⁴²(Case No. 21- 01515-JAW, Dkt. #493, #497, #513). Exhibit T-23 lists Tenrgys but selectively identifies the hourly billing rates of estate professionals other than debtor's local counsel, including: ten out- of-state attorneys from Weil, Gotshal & Manges LLP ("Weil Gotshal"); eleven financial consult- ants, an appraiser; and a partner at JW who represented a non-debtor affiliate.¹⁴³ Another example of a very complex bankruptcy case is El Dorado Gas & Oil, Inc. The Texas law firm representing the debtor in El Dorado Gas & Oil, Inc. billed hourly rates ranging from $300 for associates to $725 for one senior partner. (Case No. 23-51715-JW, Dkt. #1204). Lead counsel billed $600 per hour.

The second reason why the Court is not persuaded by Exhibit T-23 is because it includes hourly billing rates of non-attorneys. Two financial advisory firms, FTI Consulting Inc. and CR3 Partners, LLC are listed in Exhibit T-23. Eleven of the hourly rates in the chart (ranging from $500 to $1,295) were charged by FTI personnel in Tenrgys; another six (ranging from $575 to $850) were charged by CR3 in Express Grain. These timekeepers included managers, directors, and chief restructuring officers who provided financial advisory, valuation, and technology sup- port services to the debtors. They are not attorneys, and their rates are not for "similar work."

Third, there was little testimony comparing the fourteen cases in Exhibit T-23 with this Bankruptcy Case. For example, Tenrgys involved 32 affiliated debtors.¹⁴⁴Their lead counsel,

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Alfredo R. Pérez,¹⁴⁵was then a partner at Weil Gotshal and charged a billing rate of $1,695 per hour. Tenrgys, Case No. 21-01515-JAW, Dkt. #514. The firm's regional office in Dallas, Texas began advising the debtors in Tenrgys about five years before they filed bankruptcy on a possible restructuring of their business. (Case No. 21-01515-JAW, Dkt. #93). In doing so, the firm gained an in-depth knowledge of the debtors' oil and gas business, capital structure, management, op- erations, and corporate governance that carried over into the bankruptcy case. (Case No. 21- 01515-JAW, Dkt. #93). Within six months of the bankruptcy filing, the firm's work (with the assistance of local counsel) resulted in a confirmed plan that provided a framework for reducing the debtors' debt from $200 million to approximately $47.5 million and for funding exploration of Colombian assets. (Case No. 21-01515-JAW, Dkt. #457). Weil Gotshal's fees were approved without objection. See Baulch v. Johns, 70 F.3d 813, 818 n.8 (5th Cir. 1995) (approving total fee as reasonable without ruling on the reasonableness of the hourly rate, which was not questioned by opposing counsel, and declining to opine on whether the hourly rate would be reasonable in other cases). JW's Exhibit T-23 includes none of these distinguishing facts. Geno did opine that this Bankruptcy Case was comparable in complexity to Express Grain Terminals, LLC, Case No. 21-11832-SDM,¹⁴⁶a chapter 11 case listed in Exhibit T-23 that in- No. 21-01537-JAW; In re BOE, LLC, No. 21-01521-JAW; In re BT Lands, LLC, No. 21-01538-JAW; In re BXO Lands, LLC, No. 21-01539-JAW; In re Cohay Conservation Area, LLC, No. 21-01540-JAW; In re Cohay Wildlife, LLC, No. 21-01541-JAW; In re Eutaw Ventures, LLC, No. 21-01522-JAW; In re Greenleaf CO2 Solutions, LLC, No. 21-01542-JAW; In re Highland Colony Capital, LLC, No. 21-01543-JAW; In re Jurassic Seismic Company, No. 21-01549-JAW; In re LASO, LLC, No. 21-01523-JAW; In re Leaf River Land Co., LLC, No. 21-01544-JAW; In re NOMS, LLC, No. 21-01524-JAW; In re North Cohay, LLC, No. 21-01525-JAW; In re PCE, LLC, No. 21- 01526-JAW; In re RFND, LLC, No. 21-01527-JAW; In re RFS, LLC, No. 21-01528-JAW; In re SNPI, LLC, No. 21- 01529-JAW; In re South Cohay, LLC, No. 21-01530-JAW; In re STP Ventures, LLC, No. 21-01531-JAW; In re Tallahala Exploration, LLC, No. 21-01532-JAW; In re Telpico USA, LLC, No. 21-01533-JAW; In re TC Energy, LLC, No. 21-01534-JAW; In re TPCO, LLC, No. 21-01545-JAW; In re WCOA, LLC, No. 21-01535-JAW; In re WYC Lands, LLC, No. 21-01547-JAW; and In re Xlake Pipeline Company, LLC, No. 21-01548-JAW.

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volved 350 to 400 farmers and issues of first impression. (Dkt. #3527 at 110, 256-57, 283). He also named two high profile Mississippi cases that were not listed on Exhibit T-23 as compara- ble: In re Pioneer Health Services, Inc., Case No. 16-01119-JAW,¹⁴⁷a chapter 11 case involving seven active hospitals and about 100 physical therapy offices; and In re Opus Management, LLC, Case No. 16-00297-NPO¹⁴⁸(Bankr. S.D. Miss. Dec. 20, 2021), a chapter 11 case that involved several affiliated debtors, an owner under indictment, an FBI raid, and a corporate "divorce."

(Dkt. #3527 at 109-10, 203, 256-57, 283). What Geno did not say, as JW's designated expert, was that he believed a rate restoration or fee enhancement was appropriate in this Bankruptcy Case—he declined to address that issue altogether. (Dkt. #3527 at 249). Q. Now, you gave a lot of opinion testimony about rates, okay, and I just want to be sure that I'm clear about what your testimony is. You're not giving any testimony, are you, about whether an enhanced fee is appropriate in this case or not, are you?

A. I am not.

Exhibit T-23 is a selective sampling of the hourly rates of different types of estate profes- sionals—financial consultants, appraisers, and attorneys—who charged $450 or more. By relying on Exhibit T-23, JW attempts to define the relevant market for determining hourly rates as in- cluding all professionals, not just attorneys and not just estate professionals.¹⁴⁹(Dkt. #3527 at 225-26). The chart, therefore, is not helpful to the Court because it does not paint a full picture of the market rate for attorneys performing similar services in this district. Colloquially, the "bankruptcy community" in a very broad sense does indeed include a broad hourly rate to $600. (Dkt. #3527 at 110).

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range of insolvency professionals, but for attorneys seeking compensation pursuant to § 330, the relevant "community" has a much narrower meaning—it consists of attorneys "of similar skill, expertise, and reputation" who perform "similar work." See In re Heritage Real Estate Invest- ment, Inc., No. 16-01156-NPO, 2021 WL 1396570, at *15 (Bankr. S.D. Miss. Mar. 12, 2021) (citing McClain, 649 F.3d at 381) (emphasis added); see also Blum, 465 U.S. at 895 n.11 (ruling that fee applicants must prove "that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and repu- tation.").

JW simply ignores the "similar work" qualifier of the reasonableness standard. JW argues that the hourly billing rates of creditors' attorneys are part of the relevant community, but as JW's and the Trustee's expert (Geno) explained, professionals who are not estate professionals are not subject to the scrutiny of § 330 and can bill whatever rates their clients will agree to pay—without deference to § 330's standard of reasonableness. (Dkt. #3527 at 124-25). Geno, for example, charges debtors a different hourly rate than creditors (who are not subject to § 330). (Dkt. #3527 at 265). During Trial, the Court informed counsel for JW and the Trustee that it would give little weight to Exhibit T-23 in the absence of evidence that the cases were factually analogous, but no such evidence was presented. (Dkt. #3528 at 47).

For the reasons set forth above, the Court gives Exhibit T-23 little weight and adopts the rea- soning in In re Sanderson Plumbing Products, Inc., Case No. 13-14506-JDW (Bankr. N.D. Miss. Dec. 16, 2015), Dkt. #597. The crux of the ruling in Sanderson Plumbing was that determining the reasonableness of hourly rates requires a fact intensive inquiry. Based on the unique facts of this Bankruptcy Case, the Court heard nothing after ten days of Trial and 395 exhibits that would

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support a finding that the rates charged by JW were unreasonably low and should now be in- creased. Applying for employment at specific hourly rates at the onset of a case and then asking the Court to substantially raise those rates at the end of that case on the ground that those rates were unreasonably low creates notice and equity issues, particularly where one creditor bears the burden of that request and is not being made whole—as is the case here. If JW believed the firm set their hourly rates too low at the onset of the Bankruptcy Case, it could have formally amended its employment application at any time, placing all parties on no- tice instead of waiting almost a decade to request higher hourly rates retroactively. Barber, JW's corporate representative who prepared JW's interim fee applications, testified that JW's requested fees and expenses, including the rate restoration, are reasonable. (Dkt. #3524 at 40). The Court finds that the rates applied for in the interim fee applications are within the prevailing market rate for this district during the germane time period. JW will be paid those rates without any adjustment, either up or down, with the exception of De Leon's rate for the reasons previously stated. EFP/EFT's objection to a rate restoration is sustained.

4. Lodestar: Hours Expended

Having addressed JW's billing rates, the Court turns to the 20,043.60 hours logged by JW for the eight-year period from March 2015 to November 2023. See Hensley, 461 U.S. at 434 (courts

"should exclude from this initial fee calculations hours that were not 'reasonably expended'") (citation omitted). The Court starts its review by rejecting JW's argument that the magnitude of hours expended was reasonable, in part, because of the fierce opposition and lack of cooperation the Trustee faced from Dr. Edwards, who owned or controlled the estate's two largest creditors. According to JW, Dr. Edwards deployed a barrage of unreasonable legal challenges to the

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Trustee's attempts to administer the bankruptcy estate and initiated unnecessary contested mat- ters that the Trustee and JW had to respond to. (T-5, -6); In re Macco Props., Inc., 540 B.R. 793, 871 (Bankr. W.D. Okla. 2015) (attributing larger than typical hours billed in chapter 11 case to

"maneuvering of the other side"). Indeed, its expert Geno testified at Trial that given the small number of creditors, this Bankruptcy Case had generated more litigation than any other he had seen or read about in his 43 years of bankruptcy practice. (Dkt. #3527 at 99-100, 116). This Bankruptcy Case, according to Geno, was "pretty rare" because of "the level of intensity and in- tense litigation and constant litigation, that makes it separate and apart from most every other case." (Dkt. #3527 at 212). The first bankruptcy judge shared that same opinion. In an order dat- ed September 9, 2016, he noted, "The disputes between the Trustee and Edwards have made this the most contentious case this Court has seen. The pleadings are snarky and full of attacks against the other side—almost to the point of being unprofessional." (STP-346 at 22). Dr. Edwards testified that he was not an obstructionist in this Bankruptcy Case but "just the opposite." (Dkt. #3532 at 71). According to Dr. Edwards, the Trustee's refusal to recognize EFP/BHT as secured creditors "was what obstructed the progress of the case." (Dkt. #3532 at

83). He complained that his repeated efforts to obtain a decision on EFP/BHT's secured status had "been fought every step of the way." (Dkt. #3532 at 72).

The Court agrees that this Bankruptcy Case was contentious but does not view Dr. Edwards as a vexatious litigant. No doubt he was entrenched in his legal position, but he was mostly justi- fied as evidenced by this Court's reduction of JW's fees for the reasons discussed herein. Dr. Edwards wanted out of the Bankruptcy Case, but he was not willing to settle for less than what he believed EFP/BHT were entitled to receive—which was his legal right. The parties engaged

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in numerous mediation sessions, and the record bares no hint that Dr. Edwards failed to act in good faith.¹⁵⁰JW's attempt to blame Dr. Edwards for the hours logged in this Bankruptcy Case falls flat. Even assuming Dr. Edwards were blameworthy, his conduct wouldn't change the § 330(a) analysis—the question would still be whether the hours expended responding to his mo- tions and objections were reasonable at the time. If the Trustee and JW were required to expend more time than usual because of Dr. Edwards' unreasonable legal positions or defenses, that ex- tra time must still comply with § 330 and Woerner to be compensable. Having dispensed with the argument that Dr. Edwards' legal positions caused JW to expend more fees than is typical, the Court turns to the reasonableness of the hours logged by JW. EFP/EFT filed an 87-page objection to which they attached JW's fee invoices totaling 2,093 pages and also presented a demonstrative exhibit listing approximately 14,556 time-entries. They highlighted in different colors the time entries they deemed problematic and tied each color to one of the following categories: (a) work that was not necessary and/or did not benefit the es- tate;¹⁵¹(b) estimated hours; (c) Trustee work; (d) duplicative work; (e) overstaffing; (f) adminis- trative/clerical work; (g) work performed by trainees; (h) time spent traveling; (i) excessive re- search on consumer bankruptcy issues; (j) work defending fee applications; and (k) services per- formed after March 2023 to the extent that JW seeks more than $75,000 in fees. (STP-279).

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a. Work That Was Not Necessary and/or Did Not Benefit the Estate

With one exception,¹⁵²the categories of work that EFP/EFT challenge as neither necessary for the administration of the estate nor beneficial to the estate share a common origin story. They all relate to the Trustee's response to Dr. Edwards' trip to Costa Rica in December 2014 and a CD that Meehan mailed him after he returned home.

As previously discussed, Dickson's arrest in March 2014 left Meehan, his business partner in Costa Rica, without sufficient funds to operate the call center. (Dkt. #3532 at 34; Dkt. #1017-1). In a telephone call to Dr. Edwards on September 11, 2014, Meehan introduced himself as Dick- son's business partner in Costa Rica. (Dkt. #1017-1 at 5; Dkt. #3532 at 34). This call was unso- licited by Dr. Edwards, who nevertheless took that opportunity to ask Meehan for help locating any of Dickson's privately-owned assets. Meehan indicated that he might know where Dickson had hidden the missing Portfolio #7 loans in Costa Rica.

In early December 2014, Dr. Edwards traveled to Costa Rica on other business and while there arranged a meeting with Meehan. (Dkt. #3532 at 34-35, 39). They toured the call center leased by Dickson to operate CHFS's loan-servicing business. (Dkt. #3532 at 35). After return- ing to Baltimore, Dr. Edwards remained in contact with Meehan by email. At Dr. Edwards' re- quest, Meehan mailed him a CD containing the hard drive of a computer laptop used by a former CHFS employee. (Dkt. #3532 at 36-37).

Despite ongoing conversations between Dr. Edwards, his counsel, and JW during this time, Dr. Edwards did not reveal the CD to JW or the Trustee. (Dkt. #3528 at 56; STP-344). JW and the Trustee first learned about the CD, not from Dr. Edwards, but from Meehan when he called

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Barber in February 2015, about five months after Meehan had first contacted Dr. Edwards. (Dkt. #3524 at 123).

The Trustee testified that she "was blown away" when she learned about Dr. Edwards' trip to Costa Rica and the CD.¹⁵³(Dkt. #3528 at 53). On February 20, 2015, she filed an application seeking Court approval to employ Facio & Cañas, a large law firm in Costa Rica, to assist her in locating and repatriating assets and enforcing orders. (Dkt. #983). On March 28, 2015, she filed the Trustee's Second Report, describing Meehan's role in Dickson's rogue operation in Costa Rica and attaching emails between Meehan and Dr. Edwards. The Trustee wrote that she "has not yet determined what impact the information [provided by Meehan] will have on existing pleadings filed in this case, including . . . the Chapter 11 Plan of Liquidation." (STP-54). She then took the following accelerant measures on April 7, 2015:

1. filed a lawsuit against Dr. Edwards, his adult children, Borg and James Edwards, and EFP/BHT for violating the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962(c), in District Court;

2. filed motions to withdraw the reference of the entire Bankruptcy Case and the Ed- wards Adversary Proceedings (STP-194) in District Court; and

3. announced the withdrawal of the Original Disclosure Statement and Plan at the con- firmation hearing and later, on May 15, 2015, filed the Penalty Plan that subordinated EFP/BHT's claims from "Class 1 Claims (EFP/BHT Secured Claims)" to "Class 6 (EFP/BHT Claim)." (Dkt. #1022).

For purposes of this discussion, EFP/EFT's fee objection for which the Costa Rican trip and CD provide the origin story is divided into two sections: (1) their general objection to all work performed by JW after March 2015 based on the Trustee's alleged breach of her fiduciary duty

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and/or conflict of interest and (2) their specific objections to particular pleadings and motions filed by JW and litigation pursued by JW.

(1) Alleged Breach of Fiduciary Duty/Conflict of Interest (All Work Performed after March 2015)

According to EFP/EFT, the measures taken by the Trustee on April 7, 2015 prove that by mid-March 2015, she and JW had abandoned their fiduciary duties to the estate and focused their attention on pursuing Dr. Edwards. They argue that the work expended by the Trustee and JW after March 2015 "was incurred in their 8-year long pursuit to defeat or subordinate the Edwards Entities' claims and thus elevate the payment priority of estate professionals (themselves) above the interests of the Edwards Entities." (STP-279 at 2; Dkt. #3529 at 212-13). For that reason, they oppose the payment of any compensation to JW for services performed from March 2015 to November 16, 2023, a span of nearly eight years, on the ground that the Trustee breached her fiduciary duty and/or had a conflict of interest precluding payment to JW or the Trustee.¹⁵⁴ EFP/EFT do not question whether JW actually worked the logged hours but argue that the Trustee's dual role as the chapter 11 trustee and her own counsel created a conflict of interest resulting in a breach of her fiduciary duties to the estate. (Dkt. #3529 at 9-10). They demand that JW disgorge interim fees of $4,249,596 and expenses of $290,249.60 for all services rendered during this period. (Dkt. #3532 at 82). They maintain that the Trustee's desire to get paid— notwithstanding the administrative insolvency of the estate—clouded her billing judgment.¹⁵⁵ (Dkt. #3529 at 20-22). Payment of her fees and JW's could occur, according to EFP/EFT, only if their claims were determined to be invalid or unsecured.

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In her response to these allegations, the Trustee points out that EFP/BHT supported her ap- pointment against CHFS's own allegations of a conflict of interest even though the estate was administratively insolvent at that time (the same circumstance that EFP/EFT now claim creates a conflict of interest). (Dkt. #3528 at 201). In other words, EFP/BHT welcomed the Trustee's ap- pointment at the beginning of her tenure and only now assert a conflict of interest as a reason to oppose JW's fees.

To the extent that EFP/BHT was dissatisfied with the Trustee's actions, there were mecha- nisms available to address the situation during the pendency of the Bankruptcy Case. They could have moved for sanctions under Rule 9011 of the Federal Rules of Bankruptcy Procedure¹⁵⁶or filed a motion to remove the Trustee from her position. In that regard, § 324(a) allows a court to remove a trustee for "cause," which "may include trustee incompetence, violation of the trustee's fiduciary duties, misconduct or failure to perform the trustee's duties, or lack of disinterestedness or holding an interest adverse to the estate." Dye v. Brown (In re AFI Holding, Inc.), 530 F.3d 832, 845 (9th Cir. 2008); see Smith v. Robbins (In re IFS Fin. Corp.), 803 F.3d 195, 202-06 (5th Cir. 2015) (standard of removal "for cause" under § 324(a) is clear and convincing evidence that the trustee breached her fiduciary duty to the estate); 3 C OLLIER ON BANKRUPTCY ¶ 324.02 (16th ed. 2025) (examples of causes to remove a trustee include breach of fiduciary duty, misconduct, and lack of disinterestedness). Moreover, a bankruptcy trustee may be held personally liable if, in performing her duties for the estate, she acted willfully and deliberately in violation of her fi- duciary duties, or if she acted with gross negligence. Dodson v. Huff (In re Smyth), 207 F.3d 758, 761 (5th Cir. 2000) (examining standard of care required of bankruptcy trustee's under federal

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common law); Lake Whillans Fund 1 LP v. Del. Tr. Co. (In re Sanchez Energy Corp.), 661 B.R. 522, 540 (Bankr. S.D. Tex. 2024). Instead of choosing any of these options, EFP/BHT opted to wait until the end of the Bankruptcy Case to challenge the fees paid JW because of an alleged breach of the Trustee's fiduciary duty/conflict of interest.

The Court finds that EFP/EFT did not scale the high burden of proving that the Trustee had breached her fiduciary duty or that she had a conflict of interest. During the eight years in ques- tion, JW and the Trustee clearly performed some work that was necessary to advance the admin- istration of the Bankruptcy Case and was beneficial to the estate. The Court views EFP/EFT's post-March 2015 argument as overreaching. See Sugarloaf Ctr., LLC, 2020 WL 6749771, at *8 ("A general objection to all fees and expenses is not proper, and '[g]eneral dissatisfaction or a disagreement over business judgment will not suffice' to support an objection to fees.") (citation omitted).

Dr. Edwards' frustration is intelligible—he perceived that the Trustee was prioritizing her personal interest in getting paid over EFP/BHT's, but there was insufficient evidence presented to clear the very high hurdle of proving that the Trustee breached her fiduciary duty or that she or JW had a conflict of interest that would justify complete disgorgement of JW's fees from March 2015 forward. This part of EFP/EFT's objection is overly broad and is overruled.

(2) Objections to Trustee's Specific Actions

Alternatively, EFP/EFT argue that the legal fees for specific actions taken by the Trustee, all but one of which were in response to Dr. Edwards' trip to Costa Rica and the CD, should be dis- allowed as neither necessary nor beneficial to the estate. These actions included: (a) filing the RICO Case against EFP/BHT, Dr. Edwards, and his children; (b) filing the motions to withdraw

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the reference, intervene, and consolidate; (c) proposing liquidation plans that paid in full all ad- ministrative expenses (including her fees and JW's) before paying EFP/BHT's claims; (d) re- suming litigation in the Edwards Adversary Proceedings against EFP/BHT; and (e) appealing the District Court's denial of Henderson's and Wells Marble's fees.

Under the framework provided by § 330, services are compensable if a fee applicant estab- lishes that they were "'necessary to the administration' of a bankruptcy case or 'reasonably likely to benefit' the bankruptcy estate 'at the time at which [they were] rendered.'" Woerner, 783 F.3d at 276; 11 U.S.C. § 330(a)(3)(C), (4)(A). "Benefit to the estate" is a shorthand reference to the statutory requirement that services must be necessary. See Rubner & Kutner, P.C. v. U.S. Tr. (In re Lederman Enters., Inc.), 997 F.2d 1321, 1323 (10th Cir. 1993). This factor recognizes both the limited resources available to pay unsecured creditors in a bankruptcy case and the corre- sponding need to limit administrative expenses.

In the Fifth Circuit, the seminal case on the issue of whether services are beneficial to the administration of the estate is Woerner, 783 F.3d at 276. Demery v. Johns, 570 B.R. 44, 50 (W.D. La. 2017). The Woerner Court reviewed the text of § 330 and its legislative history, and joined the majority of other Circuit Courts in adopting a prospective test that looks to the neces- sity or reasonableness of the professional services at the time they were rendered for determining whether services are compensable. Woerner, 783 F.3d at 274-77. The Woerner Court overruled Andrews & Kurth, LLP v. Family Snacks, Inc. (In re Pro-Snax Distribs., Inc.), 157 F.3d 414, 426 (5th Cir. 1998), to the extent it required compensable professional services to actually result in an "identifiable, tangible, and material benefit to the bankruptcy estate." Woerner, 783 F.3d at

277. The Fifth Circuit in Woerner listed factors that bankruptcy courts "ordinarily consider"

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when determining whether professional services were necessary or beneficial at the time they were rendered: "the probability of success at the time the services were rendered, the reasonable costs of pursuing the action, what services a reasonable lawyer or legal firm would have per- formed in the same circumstances, . . . and any potential benefits to the estate (rather than to the individual debtor)." Id. at 276.

(a) Trustee's RICO Case Against EFP/BHT, Dr. Edwards & His Adult Children

EFP/BHT assert that the RICO Case that the Trustee filed against them, Dr. Edwards, Borg, and James Edwards (the "RICO Defendants") did not benefit the estate. (Case No. 3:15-cv- 00260-CWR-LRA, Dkt. #1). In her statement of facts in support of her RICO Claims (the "RICO Statement"),¹⁵⁷the Trustee alleged that the individual RICO Defendants (Dr. Edwards, Borg, and James Edwards) engaged in a pattern of racketeering activity intended to conceal and obtain con- trol over CHFS's assets to the detriment of the estate. (Case No. 3:15-cv-00260-CWR-LRA, Dkt. #3). These purported predicate acts occurred from September 11, 2014, when Dr. Edwards first spoke to Meehan and "falsely asserted he had a court order . . . which . . . allowed EFP and BHT to seize B. Dickson's assets to recover stolen money,"¹⁵⁸until February 10, 2015, when Meehan informed Dr. Edwards that Dickson's assets were "froze up" by government authorities in Costa Rica and Panama. (Case No. 3:15-cv-00260-CWR-LRA, Dkt. #3). During that time, Dr. Ed- wards met face-to-face with Meehan in Costa Rica¹⁵⁹and exchanged numerous emails with him in an attempt to obtain information about Dickson's assets and business operations. The thrust of

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the Trustee's RICO claim was that Dr. Edwards wrongfully gathered and withheld CHFS-related information from her, primarily the CD. Although she included Dr. Edwards' children in the RI- CO Complaint, she did not allege that either Borg or James Edwards engaged in any communica- tions with Meehan.¹⁶⁰As to monetary damages, the Trustee claims that the estate lost approxi- mately $25,000 in monthly collections from loans purchased by Dickson in Costa Rica and also servicing fees for any additional loans based in the United States that were unknown to her until February 2015.

The Court finds the Trustee's decision to sue EFP/BHT, Dr. Edwards, and his adult children based on these factual allegations was unreasonable and untenable. ¹⁶¹

The Trustee's RICO claims were brought under 18 U.S.C. § 1964(c) based on purported violations of two subsections of the RICO statute, 18 U.S.C. § 1962(a) and (c). Those subsections share three common ele- ments: "(1) a person who engages in (2) a pattern of racketeering activity, (3) connected to the acquisition, establishment, conduct, or control of an enterprise." Abraham v. Singh, 480 F.3d 351, 355 (5th Cir. 2007) (quotation omitted). A pattern requires at least two predicate criminal actions. 18 U.S.C. § 1961. "To establish th[e] pattern [element,] a plaintiff must show both a re-

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lationship between the predicate offenses . . . and the threat of continuing activity." Malvino v. Delluniversita, 840 F.3d 223, 231 (5th Cir. 2016). A RICO plaintiff establishes "continuity"

through evidence of "a closed period of repeated conduct" or "past conduct that by its nature pro- jects into the future with a threat of repetition." H.J. Inc., 492 U.S. at 241. A plaintiff demon- strates continuity over a closed period by proving a series of related criminal acts extending over a "substantial period of time." Id. at 242. Because Congress enacted RICO to address "long-term unlawful conduct, not fraudulent acts extending over a few weeks or months," the Fifth Circuit has presumed that more than a year of racketeering acts is enough to establish a "substantial pe- riod of time." D&T Partners, LLC v. Baymark Partners Mgmt., LLC, 98 F.4th 198, 205-07 (5th Cir. 2024).

Another consideration in determining whether a RICO pattern exists is the number of victims injured by the alleged racketeering acts. The Fifth Circuit has been "skeptical of RICO allega- tions when the victims of the alleged racketeering conduct are limited." Id. at 206. Apart from the duration and number of victims, another consideration is whether the unlawful conduct in- volves one or multiple schemes. Numerous schemes tend to support a RICO claim. H.J. Inc., 492 U.S. at 240. There is no RICO liability where "the alleged racketeering acts . . . , taken together, .

. . comprise a single effort to facilitate a single financial endeavor." D&T Partners, LLC, 98 F.4th at 207 (quotation omitted).

The Trustee's allegations fall far short of satisfying the elements of a RICO claim. As to the alleged "racketeering activity," there are no factual allegations that Borg or James Edwards committed any predicate act, and the predicate acts allegedly committed by Dr. Edwards require evidence that he acted "knowing and fraudulently." But Dr. Edwards, through EFP/BHT, pos-

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sessed about 99% of all creditors' scheduled claims at that time and credibly testified that he be- lieved he was executing his judgment against Dickson only, not the estate. (Dkt. #3532 at 77-78). Moreover, the Trustee would be hard pressed to show the requisite "continuity" given that the alleged racketeering activity took place over six months. See H.J. Inc., 492 U.S. at 242 (noting that predicate acts over a few months is not enough to show continuity). At best, the Trustee's allegations show a single scheme involving a single injury to a single victim (the estate) over a few months. Dr. Edwards had a plausible explanation for his actions, but neither JW nor the Trustee allowed him to explain. (Dkt. #3532 at 37).

The RICO Defendants filed a motion to dismiss the RICO Complaint, and the Trustee later agreed to dismiss the RICO claims without prejudice. (Case No. 15-cv-00260-CWR-LRA, Dkt. #28). The District Court then referred the claims remaining in the (former) RICO Case to the Bankruptcy Court, where it became the Post-Petition Conduct Adversary. In the order that led to the referral, the District Court noted that EFP/BHT "presented several strong arguments for dis- missal" and the Trustee's allegations as to Borg and James Edwards were "thin." (Case No. 15- cv-00260-CWR-LRA, Dkt. #27-1).

The Court finds that the Trustee's pursuit of the RICO claims was not beneficial to the estate or necessary for its administration at the time the Trustee filed the RICO Complaint.¹⁶²The Trus- tee testified at Trial that her actions were necessary (regardless of any tangible benefit to the es- tate) to stop Dr. Edwards from exercising control over estate property. (Dkt. #3529 at 228). She

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believed at the time that Dr. Edwards had committed a crime. (Dkt. #3528 at 76). But the Trustee had plenty of less nuclear options to curtail Dr. Edwards' activities in Costa Rica other than a RICO action, the simplest of which was to call EFP/BHT's counsel. The Trustee's own expert, Geno, testified that if he were the chapter 11 trustee, he would have reached out to counsel for EFP/BHT before taking any other action. (Dkt. #3527 at 254). Barber had that opportunity on March 30, 2015, when he had a telephone conversation with EFP/BHT's counsel, but he said nothing about the forthcoming RICO Complaint. (Dkt. #3525 at 159-60). The Trustee admitted that JW had probably started drafting the RICO Complaint before that telephone call. (Dkt. #3529 at 238). Indeed, JW's invoices show that JW began drafting the RICO Complaint on March 17, 2015, well before that March 30, 2015 telephone call. (STP-111 at 247). The Trustee's main excuse for not reaching out to EFP/BHT's counsel—that she did not want to place EFP/BHT's counsel in an ethical dilemma of having to report his own client—did not apply to the March 30, 2015 conversation because by that time, the Trustee had already filed the Trustee's Second Report where she disclosed Dr. Edwards' conduct in Costa Rica. See MISS. R. PROF. 3.3. (Dkt. #3528 at 76-77).

Besides reaching out to opposing counsel, there were other less drastic steps the Trustee could have taken to protect the estate. The Trustee testified that the RICO Complaint was neces- sary to obtain emergency injunctive relief—but she could have sought injunctive relief without asserting a RICO claim. Moreover, any urgent need for injunctive relief to protect the estate

"from losing the entire computer server network" is belied by her testimony that she spent Feb- ruary and March 2015 pondering what to do. (Dkt. #3528 at 53-54). During that time, she filed an application to employ Facio & Cañas as counsel. That decision and the delay in filing the RI-

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CO Complaint were not those of someone taking emergency steps to protect assets of the estate. When she did act by filing the RICO Complaint on April 7, 2015, she "did not fully understand yet" the extent of the involvement of Dr. Edwards' children but named them as defendants any- way because they were "business partners of Dr. Edwards." (Dkt. #3528 at 71). The Court can- not find any redeeming fact that would justify compensating the Trustee or JW for any work re- lated to the RICO claim.

The Cumulative Interim Fee Order disallowed $35,916.50 in the JW Amended Second and Third Fee Applications for work specifically described as "RICO" related.¹⁶³In examining the invoices, this Court has determined that there were other time entries related to the RICO claim that were not disallowed in the Cumulative Interim Fee Order. This Court disallows all fees in- curred in connection with the RICO claim. These additional fees amount to $33,289 for total dis- allowed fees of $66,737.50 for work related to the RICO Claim.¹⁶⁴

(b) Trustee's Motions to Withdraw the Reference of the Entire Bankruptcy Case, Intervene & Consolidate

The Bankruptcy Case had been pending for almost three years and the Trustee had been in place for almost fifteen months when she asked the District Court on April 7, 2015 to withdraw the reference of the entire Bankruptcy Case and all related adversary proceedings or, at a mini- mum, to withdraw all contested matters and all adversary proceedings involving EFP/BHT, and Dr. Edwards.¹⁶⁵The Trustee also asked the District Court for permission to intervene in the

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Dickson Guaranty Case and to consolidate some matters with the RICO Case and others with the Dickson Guaranty Case. The result would be the creation of parallel District Court cases with EFP/BHT, and Dr. Edwards in one, and Dickson in the other. To accomplish this feat, the Trus- tee filed five motions to withdraw the reference, a motion to intervene, and a motion to consoli- date—all with accompanying briefs. The Trustee's filings disrupted the administration of the Bankruptcy Case and led to the first bankruptcy judge's cancellation of the hearing on confirma- tion of the Original Plan.

Unlike a request to withdraw the reference of a contested matter or an adversary proceeding, a request to withdraw the reference of an entire bankruptcy case is rare.¹⁶⁶See Ackles v. A.H. Robins Co. (In re A.H. Robins Co.), 59 B.R. 99, 105 (Bankr. E.D. Va. 1986). Geno's testimony confirmed the rarity of this procedural move. In his 43 years of experience, he had never known of the withdrawal of an entire bankruptcy case to a district court. (Dkt. #3527 at 231). In support of her unusual request, the Trustee argued before the District Court that the Bank- ruptcy Case was "uniquely complicated" and involved "international, federal and state laws which are outside the scope of matters normally considered by the Bankruptcy Court." (Adv. 13- 00104-NPO, Dkt. #27). For the Trustee's strategy to succeed, she had to persuade the District Court not only to except the Bankruptcy Case from its local reference rule but also consolidate an assortment of adversary proceedings, contested matters, and pending District Court cases (in- cluding the Dickson Guaranty Case). EFP/BHT described the Trustee's litigation strategy as

"convoluted." (Dkt. #1052 at 5). In the end, the District Court rejected the Trustee's strategy.

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The District Court denied the withdrawal motions as untimely and the motions to intervene and consolidate as moot. (Adv. 13-00104-NPO, Dkt. #35). Although that ruling does not necessarily render JW's legal services non-compensable, it does cause this Court to question the Trustee's billing judgment.

According to EFP/EFT, the fees incurred by JW related to these failed motions total $75,811.50, which they ask the Court to disallow. In defense of its fees, JW cloaks itself with the District Court's description of these motions as "well-intentioned." (Adv. 13-00104-NPO, Dkt. #35 at 3). The Trustee testified that she viewed the District Court, unlike the Bankruptcy Court, as a "court that can move these matters along quickly." (Dkt. #3529 at 229). She believed the first bankruptcy judge was not adjudicating matters as swiftly as she thought necessary. (Dkt. #3528 at 56). The docket, however, does not support the Trustee's opinion that the pace of the Bankruptcy Case was unusually or unreasonably slow.¹⁶⁷The Trustee did not move for emergen- cy relief in the Bankruptcy Case, and there is no evidence that the first bankruptcy judge would have ignored a request for an expedited hearing. The Court finds that the hours expended by JW implementing the Trustee's strategy were neither necessary for the administration of the estate nor beneficial to the estate. The motions, after all, were untimely, given that the Bankruptcy Case had been pending for about three years, and the Bankruptcy Case was not moving so slowly as to justify the "catch up" time that would have been required of the District Court to adjudicate the adversary proceedings and cash collateral matters.

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In the Cumulative Interim Fee Order, the second bankruptcy judge disallowed half of the fees ($30,390.50) charged by JW to research, prepare, brief, and argue the motions to withdraw.¹⁶⁸ This third bankruptcy judge disallows all of these fees ($60,781) as well as those fees incurred in connection with the motions to intervene and consolidate ($51,589) for total disallowed fees of $81,979.50.¹⁶⁹

(c) Trustee's Liquidation Plans

After Dickson's ouster, plan confirmation became the Trustee's responsibility.¹⁷⁰EFP/EFT challenge the compensability of all work expended by JW pursuing confirmation of the Trustee's three unsuccessful liquidation plans. (STP-191, -206, -228). They contend that the plans, when filed, were unconfirmable and, therefore, were neither necessary to the administration of the es- tate nor reasonably likely to benefit the estate. (Dkt. #1594). They were unconfirmable, accord- ing to EFP/EFT, because they paid professional fees when the estate was administratively insol- vent (that is, that the estate lacked sufficient unencumbered funds to pay for the costs of handling the estate) in violation of the Bankruptcy Code's priority scheme. (Dkt. #3532 at 130). Dr. Ed- wards testified, "There was nowhere an issue about paying unsecured creditors a hundred thou- sand or so, the issue was dumping in front of us millions of dollars of attorneys' fees." (Dkt. #3532 at 131). The fees billed by JW for work on the Trustee's plans are spread over the JW Amended Second Fee Application through the JW Eighth Fee Application.

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(i) Comparison of Trustee's Proposed Treatment of EFP/BHT's Claims

JW argues that the treatment of EFP/BHT's claims in the Trustee's liquidation plans as a practical matter was not much different than the treatment they ultimately received in the Joint Plan, which EFP/BHT's counsel was primarily responsible for drafting. (Dkt. #3528 at 72). Alt- hough the Trustee proposed to pay administrative expenses and non-Edwards unsecured claims in full before EFP/BHT's in all of her proposed plans, JW contends that § 1129(a)(9) required her to do so. At Trial, however, the Trustee admitted that the Bankruptcy Code (including § 1129(a)(9)) does not allow administrative claimants to be paid ahead of secured creditors "to the extent [they] have traceable collateral." (Dkt. #3529 at 225). JW also maintains that the total of all non-Edwards unsecured claims was very small relative to the debt owed EFP/EFT. (Dkt. #3528 at 62). The firm, however, does not make the same argument about the amount of admin- istrative expenses. A review of the plans proposed by the Trustee and the Joint Plan is necessary to adjudicate EFP/EFT's objection to JW's fees. The table below is the Court's comparison:

Trustee's Three Liquidation Plans & Joint Plan Original Plan Penalty Plan

Filed February 2015 & Filed May 2015 Second Withdrawn (STP-206) Amended Plan Joint Plan

& Modified Filed June 2018 Filed May 2023 April 2015 (STP-191) February 2017 (STP-228)

(STP-274)

(STP-215)

Filed one year after the Filed after the Trustee: Filed after the second Filed after the settlement of Trustee's appointment dur- withdrew the Original bankruptcy judge adjudi- EFP/BHT's claims ing the stay of the Edwards Plan; filed the RICO Case; cated EFP/BHT's claims as Adversary Proceedings filed Motions to Withdraw being secured in part and the Reference, Intervene & unsecured in part

Consolidate & resumed

litigation of the Edwards

Adversary Proceedings

Class 1 Class 1 Class 1 Class 1 Claims

(EFP/BHT Secured (Secured Claims) (Secured Claims) (Secured Claims)

Claims)

Assigns all loans in satisfac- None. None. None. tion of secured claims; as-

sumes & assigns

ClearSpring's servicing

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contract (at EFP/BHT's option); & conveys REO Property

Class 2 Class 2 Class 2 Class 2 (Other Secured Claims) (Priority Unsecured (Priority Unsecured (Priority Unsecured Claims) Claims) Claims)

Class 3 Class 3 Class 3 Class 3

(Priority Unsecured Claims) (General Unsecured (EFP Secured Claims) EFP/BHT Claim

Claims) Assigns Portfolios #1-2 in Assigns all loans; assumes & as- satisfaction of secured signs ClearSpring's Servicing con- claims tract; conveys all real & personal

property; transfers all cash remain-

ing after payment to Classes 1, 2 &

4, less $75,000 for payment to es-

tate professionals for fees & ex-

penses incurred in confirming plan;

transfers all rights to funds associ-

ated with the U.S. Forfeiture Order

Class 4 Class 4 Class 4 Class 4

(General Unsecured (Litigation Claims) (Unsecured Claims) General Unsecured Claims Claims)

Class 5 Class 5 Class 5 None.

(Litigation Claims) (Convenience Claims) (EFP/BHT

Unsecured Claims)

Abandons all Home Im- provement Loans & sells Portfolios #3-6

Class 6 Class 6 Class 6 None. (Convenience Claims) (EFP/BHT Claim) (Unsecured Accrued Inter- Assigns all loans; assumes est Claims)

& assigns ClearSpring's

servicing contract (at

EFP/BHT's option); con-

veys REO Property & all

other personal & real prop-

erty not otherwise provided

for; transfers all cash not

otherwise provided for;

Trustee retains Bankruptcy

Causes of Action & Litiga-

tion Claims for one year; at

the end of one year, Trustee

may assign to EFP/BHT

any unresolved Bankruptcy

Causes of Action and Liti-

gation Claims; Trustee may

distribute all remaining

cash to EFP/BHT one year

after Plan's effective date;

modification assigns and

transfers to EFP/BHT the

Restitution Award, Bank-

ruptcy Causes of Action &

Litigation Claims; Trustee

no longer retains Bank-

ruptcy Causes of Action &

Litigation Claims

Class 7 Class 7 None. None.

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(Dickson Claims) (Dickson Claims) Requires EFP/BHT to in- Requires EFP/BHT to in- Requires EFP/BHT to in- None. demnify the Trustee & her demnify the Trustee & her demnify the Trustee & her professionals from any professionals from any professionals from any claim related to the loans claim related to the loans claim related to the loans Pays all administrative ex- Pays all administrative Pays all administrative Expressly reserves EFP/BHT's penses expenses expenses right to object to final fee applica-

tions

Creates $250,000 Litiga- Creates $500,000 Creates $500,000 Litiga- None.

tion Claims Account Litigation Claims Account tion Claims Account

After liquidation of Litiga- After liquidation of Litiga- tion Claims by the Trustee, tion Claims by the Trustee, any remaining funds revert any remaining funds will to the Liquidation Trust pay unpaid administrative claims and then EFP/BHT;

modification reduces Liti-

gation Claims Account to

$50,000

Forms Liquidation Trust None. None. None. from all assets remaining

after distributions to Classes 1-3 & Classes 5-6; Trustee

will administer Liquidation

Trust for 3 years at an hour- ly billing rate of $375 and

after 3 years will transfer to EFP/BHT any excess funds

after paying Class 4 (Gen-

eral Unsecured Claims) and

the Trustee's fees and ex-

penses

Does NOT set aside any Sets aside $500,000 to pay Sets aside $500,000 to pay Holds back $75,000 to pay estate

money to pay post- post-confirmation profes- post-confirmation profes- professionals fees associated with confirmation professional sional fees sional fees confirming Joint Plan

fees

Dismisses Edwards Adver- Dismisses Edwards Adver- Dismisses Edwards Adver- Dismisses Edwards Adversary sary Proceedings sary Proceedings sary Proceedings Proceedings

No confirmation hearing Confirmation hearing can- Confirmation hearing Joint Plan confirmed held; Original Plan with- celled as premature stayed by District Court

drawn April 7, 2015 pending appeal

(ii) Analysis

The Court will not disallow the fees incurred by JW for work expended on the Trustee's liq- uidation plans merely because they were not confirmed. Other courts have held that determining whether services related to a chapter 11 plan are reasonably likely to benefit the estate "is not restricted to success measured by confirmation of a plan or the prospect of confirming a plan."

Macco Props., Inc., 540 B.R. at 868 (quotation omitted). In a chapter 11 case, it is not uncom-

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mon for a plan proponent to craft a plan that proposes creative solutions to handle difficult prob- lems. The proposal of a plan that cannot be confirmed without the consent of the adversely af- fected creditor is simply the nature of the plan negotiation process. See In re Acis Capital Mgmt., LP, 603 B.R. 300, 304-05 (Bankr. N.D. Tex. 2019).

Here, EFP/EFT challenge JW's fees for reasons in addition to the Trustee's failure to confirm any plan. Their main complaint is that all three plans allowed administrative claims to be paid in full when the estate was administratively insolvent. They assert specific complaints about each plan. According to EFP/EFT, the Original Plan required them to release any claim they had against the Trustee and any of the Trustee's professionals regarding the use of their cash collat- eral. (Dkt. #3530 at 206). Next, the Penalty Plan worsened their treatment by subordinating their claims to all others except Dickson's. Thereafter, the Second Amended Plan treated their interest in the Home Improvement Loans as unsecured, although final disposition of their secured status was still pending on appeal at that time. Indeed, the Fifth Circuit ultimately ruled that EFP/BHT did hold a security interest in the Home Improvement Loans.

JW disputes EFP/EFT's contention that the estate was administratively insolvent when the Trustee proposed the plans. The Trustee testified that there were sufficient unencumbered funds in the estate from the money wired from Panama to pay all attorneys' fees, and that money, ac- cording to the Fifth Circuit, was not encumbered by EFP/BHT's security interest. (T-46; STP-87; Dkt. #3531 at 172). JW argues that although EFP/BHT's status as a secured creditor had not yet been adjudicated when the Trustee proposed the Original and Penalty Plans, the Trustee intended to turn over to EFP/BHT all monies, including collections from loans not owned by CHFS and untraceable funds recovered by her, albeit minus administrative expenses.

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(iii) Trustee's Original & Second Amended Plans

JW argues that the proposals in the Original Plan were at the time a rational economic solu- tion—one that would have avoided the expense of litigating the Edwards Adversary Proceedings. (Dkt. #3528 at 63-64). It insists that the Original Plan was not that different from the District Court's vision in 2020 about how this Bankruptcy Case should have worked.¹⁷¹ The Trustee says that the goal of the Original Plan was to save the estate the expense of liti- gating the Edwards Adversary Proceeding. Given this explanation, the Court finds that the work JW performed related to the Original Plan is compensable. Legal services may be "reasonably likely" to benefit a chapter 11 estate even when a plan is not confirmed. In re Sugarloaf, 2020 WL 6749771, at *7.

As to the Second Amended Plan, EFP/EFT's main complaint is that it was filed while their motion to stay enforcement of certain provisions of the Global Opinion was pending. JW argues that the Trustee was simply complying with the second bankruptcy judge's order that set June 1, 2018 as the deadline to file a second amended disclosure statement. (Dkt. #2260); see Baron v. Sherman (In re Ondova Ltd.), 914 F.3d 990, 993 (5th Cir. 2019) (common law provides near- absolute protection against suit to those acting pursuant to court orders, including for breaches of fiduciary duties). But the Trustee had no separate fiduciary duty to protect EFP/BHT from rul- ings in the Global Opinion that Dr. Edwards found unfavorable. Indeed, it is not unusual for con-

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firmation of a plan to proceed during the pendency of an appeal. The Fifth Circuit has "repeated- ly recognized that, when a notice of appeal has been filed in a bankruptcy case, the bankruptcy court retains jurisdiction to address elements of the bankruptcy proceedings that are not the sub- ject of that appeal." Tex. Comptroller of Pub. Accounts v. Transtexas Gas Corp. (In re Transtex- as Gas Corp.), 303 F.3d 571, 580 n.2 (5th Cir. 2002) (quotation omitted). For the reasons discussed above, the Court finds that all the services performed by JW on the Trustee's Original and Second Amended Plans were necessary and reasonable for the administra- tion of CHFS's estate at the time the work was undertaken. The Court overrules EFP/EFT's ob- jection as to these fees on these grounds.

(iv) Penalty Plan

The Court views the Penalty Plan very differently from the other plans. The Penalty Plan is the only plan proposed by the Trustee that equitably subordinated EFP/BHT's claims, and the timing of its filing shows that it was not a reasonable attempt at negotiation. The Penalty Plan was filed only two months after the Original Plan and only 28 days after the RICO Complaint and motion to withdraw the entire Bankruptcy Case were filed in District Court. In other words, the Penalty Plan was an integral part of the Trustee's overall response to Dr. Edwards' trip to Costa Rica and the CD.

Although the Penalty Plan demoted EFP/BHT's secured claims from Class 1 in the Original Plan to Class 6, the Trustee testified that "the level of a class is just random" and does not dictate priority of payment. (Dkt. #3528 at 63; Dkt. #3531 at 160). As an example, she argued that the Joint Plan placed EFP/BHT in Class 3 but that EFP/BHT were not third in order of payment. She also testified that the subordination of EFP/BHT's claim "would not have had a significant im-

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pact on the economics of the case." (Dkt. #3529 at 225). When asked why she did it if it would have no impact, her response was that "it was designed to level the playing field." (Dkt. #3529 at

226).

At Trial, the Trustee admitted that she could "see where someone might think that looks pu- nitive." (Dkt. #3528 at 62). Barber was more candid. He testified that it was "just a little bit of a penalty for having done the stuff we thought inappropriate in Costa Rica." (Dkt. #3524 at 244) (emphasis added). But the Fifth Circuit has long ruled that equitable subordination under § 510 is remedial, not penal, and in the absence of actual harm is inappropriate. Benjamin v. Diamond (In re Mobile Steel Corp.), 563 F.2d 692, 701 (5th Cir. 1977); Wooley v. Faulkner (In re SI Restruc- turing, Inc.), 532 F.3d 355, 361 (5th Cir. 2008). Although JW argue that the equitable subordina- tion was justified because of Dr. Edwards' alleged stay violations in Costa Rica, a comparison between the alleged injury caused by Dr. Edwards and the impact of equitable subordination on EFP/BHT's claims shows that the remedy the Trustee chose was out of proportion. The Global Opinion awarded the Trustee only $10,000 in damages and $61,458.25 in attorneys' fees and ex- penses for Dr. Edwards' alleged stay violation. (STP-163 at 214). That award was vacated by the District Court and the Fifth Circuit and remanded to this Court. The total damages ($71,458.25) asserted by the Trustee is a pittance compared to the amount of EFP/BHT's allowed claims which were ultimately adjudicated to total $18,952,492. (STP-30 at 63). In short, the attempted subordination of EFP/BHT's multi-million-dollar secured claims was disproportionate to the al- leged stay violation, was an unjustified departure from the priority scheme in the Bankruptcy Code, and served no one but administrative claimants.

Also, the Court strongly disagrees with JW and the Trustee that the Penalty Plan had no

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practical effect on EFP/BHT's claims. It changed their status from secured to unsecured, and be- cause only secured claims are superior to administrative claims, it freed up substantial money to pay estate professionals.¹⁷²Changing the priority of a secured claim from first in the order of payment is more than "just a little bit of a penalty." (Dkt. #3524 at 244) (emphasis added). The Trustee's belief at that time that she could "cram down" EFP/BHT's secured claim in the Penalty Plan was unreasonable.¹⁷³(Dkt. #3529 at 290). EFP/BHT had opposed the Original Plan because, among other reasons, the Trustee proposed to pay administrative claims with what they deemed to be either their funds or cash collateral. (Dkt. #994). They argued that there was no legal basis for the Trustee to treat them as unsecured creditors in the Original Plan. Their po- sition did not change during the short two-month gap between the filing of the Original Plan and the Penalty Plan.

Moreover, at this early stage of the Bankruptcy Case, no attempt had been made to value the loan portfolios. Not until two years later, on June 7, 2017, did the Trustee retain Aucoin as a fo- rensic accountant. (STP-93; Dkt. #1775). In the order approving Aucoin's employment, the sec- ond bankruptcy judge remarked that in the absence of EFP/BHT's consent, the Trustee could not file a confirmable plan without determining the debt owed EFP/BHT, the validity of that debt, whether the debt was secured or unsecured, and the extent to which the debt was secured. (STP- 93 at 10) (citing 11 U.S.C. §§ 1122-1123). In his report introduced into evidence at the trial of

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the Edwards Adversary Proceedings, Aucoin calculated the amounts owed EFP/BHT and sorted the Home Improvement Loans and the Mortgage Portfolios into eight "buckets." (T-10). Aucoin's report did not exist in May 2015 when the Trustee filed the Penalty Plan. It is thus unclear to the Court how the Trustee could believe that she could cram down EFP/BHT's claims to unsecured status in the Penalty Plan, knowing that they vigorously op- posed similar treatment in the Original Plan, when she did not have any basis or ability at that time to determine the extent of their security interest. After all, the Trustee testified that in 2014 many of CHFS's records were either non-existent or inconsistent with other documents. After ten days of Trial and untold hours of review, the Court finds that the Penalty Plan was indeed unconfirmable and punitive when it was proposed. Even if viewed alone, without consid- ering the contemporaneous filing of the RICO Case and the motions to remove the entire Bank- ruptcy Case to District Court, the Court reaches the same conclusion. Unlike her other liquida- tion plans, the Penalty Plan moved EFP/BHT's claims in a class below all other classes of claims except Dickson's. It placed EFP/BHT's secured claims below priority administrative claims and moved JW and all other estate professionals into the first slot for payment. Clearly, the Trustee wanted to penalize Dr. Edwards for meeting with Meehan and failing to provide her a copy of the CD (although she never directly asked him for it). (Dkt. #3532 at 37). No other legitimate reason for the Penalty Plan was presented to the Court, and it was unreason- able to believe that in May 2015 the Penalty Plan had a realistic chance of being confirmed. This treatment in the Penalty Plan did not "level the playing field" but improperly kicked EFT/BHT's secured claims off the field to make room for payment of JW's administrative fees. The Court sustains EFP/EFT's objection and disallows all fees related to the Penalty Plan totaling

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$112,379.90.¹⁷⁴

(d) Resumption of Litigation of Edwards Adversary Proceedings

EFP/EFT argue that JW should not be compensated for any work litigating the Edwards Ad- versary Proceedings. (STP-279 at 27). They argue that JW defines "necessary" work too broadly and wrongly seeks compensation for work that benefited only JW and the Trustee. They attack the Trustee's decision to use estate funds to recover damages from EFP/BHT when those damag- es would ultimately be disbursed to EFP/BHT as the estate's largest creditors. They question whether the Trustee conducted a cost/benefit analysis in early March 2015 when she resumed litigating the validity and status of their claims. EFP/BHT insist that the Trustee should have voluntarily dismissed the Edwards Adversary Proceedings at that time. They argue that the Trus- tee pursued the Edwards Adversary Proceedings because payment of JW's and her considerable fees depended on turning them into unsecured creditors and rendering any funds recovered from Dickson unencumbered by their liens. Dr. Edwards testified, "She has done everything under her power to . . . convert our cash collateral to hers." (Dkt. #3532 at 50). JW defends the Trustee's billing judgment, asserting that an adjudication of the status of EFP/BHT's claim was necessary as part of the claims allowance process. JW also invokes the

"law of the case" doctrine and judicial estoppel, which it contends prevent EFP/EFT from chal- lenging the necessity of the work it performed litigating the Edwards Adversary Proceedings. The Court turns first to the law of the case doctrine.

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(i) Law of the Case

The law of the case doctrine "posits that when a court decides upon a rule of law, that deci- sion should continue to govern the same issues in subsequent stages in the same case." Chris- tianson v. Colt Indus. Operating Corp., 486 U.S. 800, 815-16 (1988) (quotation omitted); Bayou Steel Corp. v. Nat'l Union Fire Ins. Co. of Pittsburg, 487 F. App'x 933, 936 (5th Cir. 2012). The doctrine "prevents collateral attacks against the court's rulings during the pendency of a lawsuit."

Loumar, Inc. v. Smith, 698 F.2d 759, 762 (5th Cir. 1983). "The rationale on which the doctrine is based is the same as that for stare decisis: a court will follow a ruling previously made unless the prior ruling was erroneous, is no longer sound, or would work an injustice." Id. There are exceptions to the law of the case doctrine. The Fifth Circuit has held that a court may revisit a decision if "(i) the evidence on a subsequent trial was substantially different, (ii) controlling authority has since made a contrary decision of the law applicable to such issues, or

(iii) the decision was clearly erroneous and would work a manifest injustice." Royal Ins. Co. v. Quinn-L Cap. Corp., 3 F.3d 877, 880 (5th Cir. 1993) (quotation omitted). For its argument, JW points to the Fifth Circuit's ruling awarding fees to Henderson and Wells Marble incurred in litigating the Edwards Adversary Proceedings. See Community Home,

990 F.3d at 422. JW asserts that this decision is the law of the Bankruptcy Case, meaning that all fees incurred by any legal professional for work related to the Edwards Adversary Proceedings are compensable and not subject to review by this Court.

As discussed previously, the first bankruptcy judge ruled that the "Edwards-pursuit" litiga- tion initiated by Henderson and Wells Marble was necessary for the administration of the estate and a material benefit to the estate, largely because EFP/BHT's status as a secured creditor

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would impact the provisions of any reorganization plan. (STP-81, -83). On appeal, the District Court reversed the fee awards, ruling that Henderson's and Wells Marble's decision to pursue the Edwards Adversary Proceedings "was not a good gamble" and their services were neither necessary nor reasonably likely to benefit the estate. Case No. 3:18-cv-00158-CWR-LRA, Dkt. #32; (STP-339-40). On further appeal, the Fifth Circuit reinstated the fees awarded to Henderson and Wells Marble: "Viewed prospectively, pursuit of the adversary proceeding was necessary to the administration of the case to resolve otherwise unsettled disputes about the propriety of claims." (STP-96); Community Home, 990 F.3d at 427.

According to Geno, the Fifth Circuit's decision was a "directive" to the Trustee to continue litigating the Edwards Adversary Proceedings.¹⁷⁵(Dkt. #3527 at 154). He testified that this lan- guage "was a clear path to the Trustee to keep pursuing those adversary proceedings." (Dkt. #3527 at 156).

EFP/BHT's legal arguments then and now appear similar. EFP/BHT argued then, as EFP/EFT do now, that Edwards-pursuit litigation was neither necessary nor beneficial to the es- tate. Even Dr. Edwards acknowledged at Trial that EFP/BHT's previous objections to Hender- son's and Wells Marble's fees are similar to those raised against JW. (Dkt. #3532 at 83, 89, 111). This Court, however, does not view the Fifth Circuit's ruling as granting JW and the Trustee carte blanche authority to continue pursuing the Edwards Adversary Proceedings with reckless abandon and without review by this Court.

The Court finds that although the legal arguments may be similar, the facts and evidence are

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not. At issue in 2013 was the compensability of Henderson's and Wells Marble's fees for ser- vices rendered while Dickson controlled CHFS, which was still a viable company. Now at issue is the compensability of JW's fees for services rendered from 2014 through 2023, after the land- scape of the Bankruptcy Case had dramatically changed. Soon after the Trustee's appointment, the first bankruptcy judge stayed the Home Improvement Loans Adversary to provide her breath- ing room to assess the estate's claims against EFP/BHT. He later dismissed the Home Improve- ment Loans Adversary without prejudice, instructing the Trustee to file an amended complaint. (12-00091-NPO, Dkt. #227). The Trustee then filed an amended complaint that added new facts and new claims.¹⁷⁶(12-00091-NPO, Dkt. #237). Later, pursuant to the Court's order severing and consolidating the estate's claims in 12-00109-NPO with those in the Mortgage Portfolios Adver- sary, the Trustee filed a consolidated amended complaint. (13-00104-NPO, Dkt. #61). That con- solidated amended complaint also added new facts and new claims.¹⁷⁷ In short, EFP/EFT's fee dispute with JW is factually distinguishable from their previous dis- pute with Henderson and Wells Marble. Browning v. Navarro, 887 F.2d 553, 556 (5th Cir. 1989). The Court acknowledges JW's concern that it receive similar treatment as other legal pro- fessionals (Henderson and Wells Marble), but the Trustee's pursuit of the Edwards Adversary Proceedings was not so similar as to render JW's fees compensable pursuant to the law of the case. The Court is still tasked with determining if JW's fees were compensable under § 330(a). Accordingly, the Court rules that the law of the case doctrine does not bar it from considering EFP/EFT's objection to all fees incurred pursuing the Edwards Adversary Proceedings.

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(ii) Judicial Estoppel

JW next contends that EFP/EFT are judicially estopped from challenging the fees it incurred litigating the Edwards Adversary Proceedings because of their position, maintained throughout the Bankruptcy Case (and even before the Trustee's appointment), that the secured status of their claims was "the most significant issue in this bankruptcy." (STP-85 at 12). JW asserts that EFP/BHT demanded that the Trustee try the Edwards Adversary Proceedings and, therefore, cannot now complain that the litigation was unnecessary and/or not beneficial to the estate. JW contends that the Trustee made repeated efforts to avoid litigation by settling their claims through the plans and EFP/BHT's rejection of these plans forced the Trustee "to break the grid- lock" through litigation. (Dkt. #3531 at 170, 193).

Judicial estoppel "prevents a party from asserting a position in a legal proceeding that is con- trary to a position previously taken in the same or some earlier proceeding." Hall v. GE Plastic Pac. PTE, Ltd., 327 F.3d 391, 396 (5th Cir. 2003) (internal quotations & citations omitted). The doctrine prevents litigants from "'playing fast and loose' with the courts [and] deliberately changing positions according to the exigencies of the moment." United States v. McCaskey, 9 F.3d 368, 378 (5th Cir. 1993); Browning Mfg. v. Mims (In re Coastal Plains), 179 F.3d 197, 206 (5th Cir. 1999). Two elements must be present for judicial estoppel to apply: (1) the party has asserted a position that is "clearly inconsistent with its previous one" and (2) "that party must have convinced the court to accept that previous position." Occidental Petroleum Corp. v. Wells Fargo Bank, N.A., 117 F.4th 628, 638 (5th Cir. 2024) (citations omitted). A third consideration is

"whether absent estoppel the party seeking to assert an inconsistent position would derive an un- fair advantage or impose an unfair detriment on the opposing party." Id. (internal quotation &

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citations omitted); see also Reed v. City of Arlington, 650 F.3d 571, 574 (5th Cir. 2011) (en banc); Superior Crewboats, Inc. v. Primary P&I Underwriters (In re Superior Crewboats, Inc.),

374 F.3d 330, 334-35 (5th Cir. 2004). At first blush, Dr. Edwards' testimony at Trial appears to support the first element of judicial estoppel:

Q. You did insist on trying this, you're not denying that?

A. We insisted from the very beginning to try the adversary proceedings bring them to a conclusion. This goes back to the very beginning because remember where they came from. I filed a default notice January 20, 2012; one month later, Henderson came back with the adversary proceedings designed to get me to back down . . . . Q. The fact remains that you insisted on having these trials, you knew that those trials were going to be an expense of the estate, and now you're complaining about the fees as being an expense of the estate for the trials that you insisted upon, right?

A. Well, it's an entrapment question. I mean, yes, right, but the whole idea was to have done it back in 2012 and '13, not keep protracting this and making it bigger and bigger and adding more and more to it.

(Dkt. #3532 at 103-04). EFP/EFT contend that the Trustee gave them only two options: (1) ac- cept a plan that they believed improperly used their cash collateral and non-estate property to pay other creditors and administrative claimants without their consent or (2) litigate the Edwards Ad- versary Proceedings. (Dkt. #3530 at 216-17, 229). Because they were unwilling to agree to plans that they believed downgraded their claims in violation of the Bankruptcy Code, they had no choice but to seek Court intervention. They insist that the Trustee had a third option available to her that would not have required any litigation—she could have handed them all of the estate's cash and other assets. (Dkt. #3530 at 231). According to EFP/EFT, the Trustee's refusal to acknowledge the existence of this third option presented a false dichotomy.

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The Trustee contests the existence of the third option because it would have required her to breach her fiduciary duty to other creditors and administrative claimants. (Dkt. #3530 at 231; Dkt. #3531 at 68-69); Community Home, 990 F.3d at 438 (noting the trustee's "official duty to enforce the bankruptcy law in the public interest"). She testified that EFP/BHT had other options available to them besides consenting to a plan or forcing her to litigate their claims. One option, according to the Trustee, was to seek the dismissal or conversion of the Bankruptcy Case.¹⁷⁸ (Dkt. #3531 at 187-88). Other options, according to the Trustee, were to agree to the sale or abandonment of the Home Improvement Loans. (Dkt. #3531 at 189; EE-37). EFP/BHT opposed both options. (STP-324 ¶ 7; Dkt. #3531 at 189). Because Dr. Edwards chose litigation, JW ar- gues that EFP/EFT are judicially estopped from opposing its fees related to that litigation. The Court does not view EFP/EFT's position now—that all fees incurred by the Trustee pur- suing the Edwards Adversary Proceedings were unnecessary—as clearly inconsistent with Dr. Edwards' previous statements seeking the adjudication of the status of his claims. Dr. Edwards reasonably believed that the Trustee was not treating his claims properly, and he was unwilling to settle for the amounts proposed in her liquidation plans. He acted reasonably by pursuing liti- gation as the only other viable choice. His actions were not a concession that litigation of the Edwards Adversary Proceedings was necessary or beneficial to the estate for § 330(a) purposes. Judicial estoppel "should not be used where it would work an injustice, such as . . . where there is only an appearance of inconsistency between the two positions but both may be reconciled." In re Cassidy, 892 F.2d 637, 642 (7th Cir. 1990) (citation omitted). For this reason, the Court finds that JW has not met the first element of judicial estoppel.

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As to the "acceptance" element of judicial estoppel—whether this Court accepted EFP/BHT's position—JW alleges that the second bankruptcy judge ended the confirmation hear- ing on the Penalty Plan on March 27, 2017 based on EFP/BHT's insistence that no hearing could proceed before final resolution of the Edwards Adversary Proceedings. There is no evidence, however, that the second bankruptcy judge adopted any legal position at that hearing regarding the compensability of fees. To the contrary, counsel for the Trustee acknowledged the likelihood of future fee-dispute litigation:

Yes, it is true that there is some high, you know, administrative claim fees. I'm not going to dispute that, but that will be, of course in front of your honor and Your Honor will make the decisions on what those finally should be. (Dkt. #1782 at 26). A review of the transcript shows that the second bankruptcy judge expressed his concern whether the Trustee could satisfy the "indubitable equivalent" requirement for plan confirmation by returning the notes to EFP/BHT in satisfaction of their secured claims. (Dkt. #1782 at 44); see

11 U.S.C. § 1129(b) (to be fair and equitable with respect to a class of secured claims, a chapter 11 plan must provide "for the realization by such holders of the indubitable equivalent of such claims"); Sandy Ridge Dev. Corp. v. La. Nat'l Bank (In re Sandy Ridge Dev. Corp.), 881 F.2d 1346, 1349-50 (5th Cir. 1989) (discussing the development of the term "indubitable equivalent"). The second bankruptcy judge also mentioned the U.S. Supreme Court's then recent decision in Jevic, which observed that the priority system applicable to distributions is "fundamental to the Bankruptcy Code's operation" and is "the cornerstone of reorganization practice and theory."

580 U.S. at 465. He concluded that plan confirmation was premature, and he continued the hear- ing. The Court finds that JW has not met the second element of judicial estoppel because the second bankruptcy judge did not adopt any legal position regarding JW's final fees.

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The third element of judicial estoppel is whether EFP/EFT "would derive an unfair ad- vantage or impose an unfair detriment" by requiring JW to demonstrate that the Edwards Adver- sary Proceedings were necessary or beneficial to the estate. Occidental Petroleum Corp., 117 F.4th at 638. Dr. Edwards testified that he believed at the time he made the statements in ques- tion that the Edwards Adversary Proceedings were necessary because of the binary choice given him by the Trustee's liquidation plans. (Dkt. #3532 at 183-84). The Court finds that the third consideration does not support the application of judicial estoppel. The purpose of the judicial estoppel doctrine is to "protect the integrity of the judicial pro- cess." Love v. Tyson Foods, Inc., 677 F.3d 258, 261 (5th Cir. 2012) (internal quotation & citation omitted). Dr. Edwards did not engage in the kind of gamesmanship that would warrant judicial estoppel. "[J]udicial estoppel is not governed by 'inflexible prerequisites or an exhaustive formu- la for determining [its] applicability," and numerous considerations "may inform the doctrine's application in specific factual contexts." Id. Because JW has not proven any of the elements of judicial estoppel, the Court finds that EFP/EFT are not judicially estopped from challenging the necessity and benefit of the work expended litigating the Edwards Adversary Proceedings.

(iii) Billing Judgment

The Edwards Adversary Proceedings, which were initiated by CHFS and Dickson early in the Bankruptcy Case, were stayed after the Trustee's appointment in 2014 pending stabilization of CHFS's business operations. The Trustee resumed the litigation in 2015 but did not actively seek an adjudication until 2017. EFP/EFT question whether JW and the Trustee engaged in a cost-benefit analysis before resuming litigation of the Edwards Adversary Proceedings. As proof they didn't, EFP/EFT point out that "cost-benefit" appears nowhere in the Trustee's or JW's time

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entries. (Dkt. #3529 at 66). EFP/EFT argue that they held more than 99% of all scheduled and unscheduled claims in 2015 when the Trustee resumed litigating the Edwards Adversary Pro- ceedings, but a cost-benefit analysis, if properly conducted, would have revealed that suing EFP/BHT was counter to the best interests of the estate.

EFP/BHT note that once the District Court halted the Edwards Adversary Proceedings in 2018, JW's fees dramatically decreased from $217,027.82 in the JW Ninth Fee Application (from July 1, 2018 to October 31, 2018) to only $20,593 in the JW Tenth Fee Application (from November 1, 2018 to February 28, 2019). (STP-325). EFP/EFT estimate that JW billed the estate $3,178,489.42 to litigate the Edwards Adversary Proceedings and otherwise pursue Dr. Edwards for his communications with Meehan and his acquisition of the CD. (Dkt. #3529 at 90). These fees and expenses, according to EFP/EFT, greatly exceed the aggregate amount of all non- Edwards claims. (Dkt. #1545 at 5 n.3). They ask the Court to disallow all of JW's Edwards- pursuit fees and expenses.

EFP/EFT calculate the percentage of EFP/BHT's claims to be 99% based on the prepetition debt identified by Dickson in 2012 on CHFS's bankruptcy schedules. (Dkt. #40, #62, #115, 265, #266). They contend that scheduled unsecured claims totaled $30,280,492.04, comprised of $30,117,979 in Dr. Edwards-related claims¹⁷⁹and $162,513.04 in all other claims. (STP-349; Dkt. #3529 at 53). EFP/EFT, therefore, assert that EFP/BHT's scheduled claims represented about 99% of all scheduled claims.¹⁸⁰When proofs of claim filed by unscheduled creditors ($64,777.65) are included, the percentage remains the same. (Dkt. #3530 at 95-99; STP-1).

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The Trustee disputes the percentage assigned by EFP/EFT to EFP/BHT's claims. She says that EFP/BHT's allowed claims represented only 58% of total claims. She includes post-petition administrative fees in the category of non-Edwards claims and uses the allowed amounts of EFP/BHT's claims as finally adjudicated in 2022 to reach 58%. She points to a table in the 2018 Remand Opinion that compares EFP/BHT's proofs of claims before and after the trial of the Ed- wards Adversary Proceedings. (Dkt. #2184 at 16). EFP/BHT's allowed claims after that trial to- taled only $18,952,492¹⁸¹(given that the loans to purchase Portfolios #3-6 were deemed unen- forceable), administrative expenses totaled about $13.8 million, and all other unsecured claims totaled about $200,000.¹⁸²(Dkt. #3530 at 100-01, 110-11; Dkt. #3531 at 165). The Trustee further maintains that EFP/EFT should not be allowed to complain that the Ed- wards-pursuit litigation resulted in no benefit to them when they received a 101% distribution from the estate at the end of the Bankruptcy Case. (Dkt. #3531 at 211). According to the Trustee, EFP/BHT's allowed claims totaled $18,952,492, consisting of $17,223,688 for the Home Im- provement Loans, $1,147,647 for Portfolio #1, and $451,157 for Portfolio #2. (Dkt. #3531 at 208-09). The Trustee did not include the loans to acquire Portfolios #3-6 ($5,385,147) because the Fifth Circuit ultimately deemed them to be unenforceable because of the Statute of Frauds. (Dkt. #3530 at 105-06). The difference between the amount of EFP/BHT's allowed claims and $11,710,578.27, the amount of cash returned to EFP/BHT, is $7,241,913.73, resulting in a 62%

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cash distribution.¹⁸³(T-20). To that number, the Trustee adds her valuation of in-kind distribu- tions ($7,581,210.10)¹⁸⁴to reach a total of $19,291,788.37 in cash and other assets returned to EFP/BHT. Using the Trustee's numbers, EFP/BHT received a 102% distribution on their al- lowed claims.¹⁸⁵(Dkt. #3531 at 211).

EFP/EFT disagree with the Trustee's calculation of their allowed claims. They dispute the Trustee's debt total, the amount of cash she returned to them, and her valuation of the non-cash assets. They argue that the debt totaled $24,337,639, not $18,952,492. (Dkt. #3532 at 69-70). They include the loans to purchase Portfolios #3-6 totaling $5,385,147 to reach a debt total of $24,337,639. As to the cash amount returned to EFP/BHT, EFP/EFT subtract the additional amount sought by JW for a rate restoration ($920,000) from $11,710,578.27 to reach a cash dis- tribution of only $10,790,578.27. (Dkt. #3532 at 71). Also, they contend that the in-kind value of the loans assigned to EFP/BHT was $3,670,000 (not $7,581,210.10 as the Trustee opined) so that the total cash and non-cash assets returned to them only amounted to $14,460,578, which is con- siderably less than $24,337,639, the debt they allege was owed them. Dr. Edwards testified that EFP/EFT were "[v]astly worse off" after the Edwards Adversary Proceedings. (Dkt. #3532 at

71). He also testified that as of the date of Trial, EFP/EFT and its predecessor EFP/BHT had in- curred legal fees of $2.8 million for a total loss of about $12.7 million. (Dkt. #3532 at 73). In further support of their argument that the benefit of pursuing Edwards Adversary Proceed- ings did not outweigh the cost to the estate, EFP/EFT assert that EFP/BHT "largely" won on ap-

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peal. The Fifth Circuit ultimately ruled that the loans they gave CHFS to refinance the Home Improvement Loans were secured by the underlying notes. That ruling meant that EFP/BHT were entitled to all traceable collections on those loans.

(iv) Analysis

The Court finds EFP/EFT's 99% number to be problematic.¹⁸⁶It makes no room for the con- tingent, unliquidated, or disputed nature of their claims. Without question, EFP/BHT were "su- per-duper" creditors of the estate,¹⁸⁷but the amount of the debt owed them, the validity of their claims, and the status of their claims (secured or unsecured) were disputed both by CHFS and Dickson before the filing of the Bankruptcy Case and later by the Trustee. The Court, however, finds the Trustee's 58% number even more problematic because it dilutes the total of non- Edwards claims by including post-petition administrative expenses, even those incurred after March 2015.

The Court disagrees with the Trustee's contention that EFP/BHT received a 101% distribu- tion of its claims. Using the value the Court assigned to the in-kind distributions in its calculation of the Trustee's compensation ($3,670,000), EFP/EFT ultimately received only a 64% distribu- tion at the end of the Bankruptcy Case.¹⁸⁸

The Court also disagrees with EFP/EFT's argument that they largely won on appeal. Alt- hough EFP/BHT won their argument as to the Home Improvement Loans, they lost their argu- ment that: (1) they owned all the Mortgage Portfolios (and the proceeds) pursuant to "joint ven-

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ture" agreements with CHFS; (2) the loans to purchase Portfolios #3-6 were valid and not subject to Mississippi's Statute of Frauds; and (3) their security interest attached to the stolen funds re- turned to the estate. The District Court, affirmed by the Fifth Circuit, rejected EFP/BHT's argu- ments. Also, the second bankruptcy judge had ruled that the EFP/BHT's loans to purchase the Home Improvement Loans were unsecured, and if that decision had been upheld on appeal, the amount recovered by the estate would have greatly exceeded the cost of the litigation. Unpersuaded by the arguments of either party about whether the Trustee exercised proper billing judgment when she resumed the Edwards Adversary Proceedings, the Court begins its own analysis by noting that the appointment of a chapter 11 trustee is unusual and almost always means that something has gone wrong. 11 U.S.C. § 1104(a). To bring stability to the estate, a chapter 11 trustee is vested with extraordinary duties as the general representative of its credi- tors. Ingalls v. Erlewine (In re Erlewine), 349 F.3d 205, 210 (5th Cir. 2003). Her statutory duties include: investigating fully the debtor's financial condition, § 1106(a)(3); filing a plan of reor- ganization (or liquidation), § 1106(a)(5); and operating the debtor's financial condition, § 1108. Additional duties are imposed by the UST's Office pursuant to 28 U.S.C. § 586(a)(3)(A)(i). Al- so, under 18 U.S.C. § 3057(a), a chapter 11 trustee who has "reasonable grounds for believing"

that a crime has been committed "relating to insolvent debtors" has a duty to report the facts and circumstances to the United States Attorney. Finally, as a matter of common law, a trustee has fiduciary duties to the estate and all parties in interest beyond her statutory duties—primarily the duties of care and loyalty. United Pac. Ins. Co. v. McClelland (In re Troy Dodson Constr. Co.),

993 F.2d 1211, 1217 (5th Cir. 1993); 1 BANKR. LAW MANUAL § 4.7 n.21 (5th ed. 2024). Those fiduciary duties, however, are owed to all creditors; a chapter 11 trustee may not represent the

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interests of any particular creditor over the interests of others. Gross v. Russo (In re Russo), 18 B.R. 257, 270-71 (Bankr. E.D.N.Y. 1982). "While the trustee's obligation is to marshal assets for the benefits of creditors, that task is assumed as a fiduciary duty to the estate itself and not as some sort of 'hired gun.' The trustee is not the employee or agent of the creditors; they do not have the right to direct how the trustee chooses to perform the statutory duties of the position." In re Vazquez, 325 B.R. 30, 37-38 (Bankr. S.D. Fla. 2005).

The Court is convinced that given her statutory duties and her obligation to represent all creditors of the estate, the Trustee could not do what EFP/EFT now say she should have done in March 2015. (Dkt. #3531 at 191). Their argument—that the Trustee should have avoided the ex- pense of litigation by conceding their position, handing all cash over to them, and voluntarily dismissing the Edwards Adversary Proceedings—would have required the Trustee to abdicate her statutory and common law duties to the estate. See Macco Props., Inc., 540 B.R. at 870 (fi- duciary duties prohibited chapter 11 trustee from paying selected unsecured creditors and dis- missing case); Jevic, 580 U.S. at 465 (citing H.R. REP. NO. 103-835, at 33 (1994) for the proposi- tion that the Bankruptcy Code is "designed to enforce a distribution of the debtor's assets in an orderly manner . . . in accordance with established principles rather than on the basis of the in- side influence or economic leverage of a particular creditor"). A chapter 11 trustee is meant to function independently, not as a representative for a specific creditor even if that creditor holds the largest claim against the estate.

The services the Trustee performed litigating the Edwards Adversary Proceedings were part of the claims resolution process and necessary for the classification and treatment of EFP/EFT's claims. To allow a claim that is invalid or to improperly classify a claim as secured would run

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afoul of the bankruptcy distribution scheme. The Court recognizes that a chapter 11 trustee has a fiduciary duty "to abandon litigation once it becomes reasonably obvious that the cost of pursuing litigation over a particular matter is out of sync with the value of the amount sought to be recovered." In re Allied Comput. Repair, Inc., 202 B.R. 877, 887 (Bankr. W.D. Ky. 1996) (citation omitted). Here, the Trustee did not au- tomatically continue the litigation started by CHFS and Dickson. Instead, she sought and ob- tained an initial stay of the Edwards Adversary Proceedings pending stabilization of CHFS's business operations. Only later, when it became clear that confirmation of a plan acceptable to Dr. Edwards was unlikely, did she proceed with the adjudication of the status and validity of EFP/BHT's claims.

There are at least two examples in the record where the Trustee engaged in a cost/benefit analysis that led her to dismiss or abandon litigation even though there are no corresponding time entries where JW expressly uses that term. The first matter involved Logan, the New York bro- ker who introduced Dickson to Dr. Edwards. On September 18, 2007, CHFS sued Logan for the return of $100,000 in consulting fees paid him for arranging the financing facility with Dr. Ed- wards. (Adv. 14-00029-NPO, Dkt. #1-4). The Trustee investigated the claim, determined it was not worth pursuing, and voluntarily dismissed the adversary. (Dkt. #3528 at 97; Adv. 14-00029- NPO, Dkt. #23).

The second matter involved BancorpSouth. Dr. Edwards pressed the Trustee to pursue litiga- tion against BancorpSouth for allowing Dickson to wire transfer about $2 million to accounts other than the account designated in the account agreement. The Trustee determined that the

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claim lacked merit and did not pursue it on behalf of the estate.¹⁸⁹(Dkt. #3528 at 97). These deci- sions show that the Trustee and JW engaged in this cost-benefit analysis although those words do not appear in any of their time entries. As Geno explained, "[i]t's pretty rare to see that phrase cost/benefit . . . but when you review pleadings . . . and then you see a complaint filed or an ob- jection filed, it's a pretty easy inference to say they were engaging in a cost-benefit analysis without . . . using the phrase cost/benefit." (Dkt. #3257 at 170).

Dr. Edwards' position—that EFP/BHT held 99% of the claims rendered any litigation super- fluous—may appear common sensical from a layman's point of view, but the Trustee's actions were in conformity with the Bankruptcy Code, were reasonable, and were not a breach of her fiduciary duties. See 11 U.S.C. § 702(a)(5) (listing statutory duty to "object to the allowance of any claim that is improper"). Clearly, there was room to argue regarding the status and validity of EFP/BHT's claims. Dr. Edwards' and Dickson's failure to document changes in their agree- ments and errors in their written agreements rendered the formal adjudication of their claims necessary. It would have been improper for the Trustee to pay claims that she believed to be in- correct. Dr. Edwards requested, and the second bankruptcy judge granted, his request to continue the hearing on confirmation of the Penalty Plan to allow the Edwards Adversary Proceeding to proceed first.

EFP/EFT suppose that the Trustee's only motive in resuming the Edwards Adversary Pro- ceedings was to ensure that the estate had sufficient unencumbered funds to pay her fees and JW's. As Geno noted in his testimony, no conflict of interest arises just because a trustee suc-

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cessfully attacks a claim and funds become available to pay administrative expenses as a result. (Dkt. #3527 at 166). That scenario "occurs in about every case." (Dkt. #3527 at 166). EFP/EFT's supposition is not enough to render JW's fees non-compensable.

Also relevant, although not dispositive in determining compensability of JW's fees, is

"[w]hether the services were ultimately successful." Id. Here, both appellate courts agreed with the second bankruptcy judge's findings in the Global Opinion, inter alia, that: (1) CHFS, not EFP, owned Portfolios #1-6; (2) the loans to purchase Portfolios #3-6 were barred by the Statute of Frauds; and (3) EFP/BHT did not retain a security interest in the funds recovered by the Trus- tee. These rulings on appeal freed up sufficient cash to pay all other creditors, including adminis- trative claimants.

The Trustee's resumption of the Edwards Adversary Proceedings in March 2015 was neces- sary under the circumstances. The Trustee had a job to do. She could not just "take his word for it" when the legal documents papering the business transactions between CHFS and EFP/BHT were missing or unclear. (STP-163 at 17, 41-43). JW met its burden of proof, which EFP/EFT failed to rebut sufficiently to justify a categorical slashing of all fees, especially since the Trustee ultimately prevailed on many of the issues raised in the Edwards Adversary Proceeding. The Court, therefore, overrules EFP/EFT's blanket objection to all of JW's fees and expenses related to the pursuit of the Edwards Adversary Proceeding.¹⁹⁰

(e) Trustee's Appeal of District Court's Denial of Henderson's & Wells Marble's Fees¹⁹¹ The first bankruptcy judge awarded Henderson $43,542.50 for work performed from Sep- tember 2013 to December 2013 and Wells Marble $98,730 for work expended from May 2013 to

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October 2013. (Dkt. #1227, #1272). The Trustee paid Henderson and Wells Marble these fees, which the first bankruptcy judge awarded over EFP/BHT's objection that any work expended pursuing the Edwards Adversary Proceedings did not benefit the estate. EFP/BHT appealed. The District Court remanded the appeals for additional findings explaining how the Edwards Adversary Proceedings benefitted the estate. (STP-323). By this time, the Bankruptcy Case had been reassigned to the second bankruptcy judge, whose order on remand reaffirmed the first bankruptcy judge's fee awards. (STP-323). The District Court reversed, holding that "the [Ed- wards] Adversary Proceedings materially benefitted persons and firms filing administrative ex- penses—lawyers. They had no benefit to anyone else." (STP-339). Henderson and Wells Marble appealed. The Trustee appealed too even though the District Court's denial of Henderson and Wells Marble's fees, if affirmed, would have returned money to the estate. (STP-341). In the Fifth Circuit, EFP/EFT moved to dismiss the Trustee from the appeal for lack of stand- ing. Edwards Family P'ship, LP v. Johnson (In re Cmty. Home Fin. Servs., Inc.), No. 20-60718 (5th Cir. Aug, 25, 2020), Dkt. #37. They argued that the District Court's ruling had no adverse financial impact on her or the estate. They suggested that the Trustee appealed only to protect JW's fees from disgorgement. (Henderson and Wells Marble initiated the Edwards Adversary Proceedings, but JW prosecuted them to judgment at a significant cost to the estate.) Before EFP/BHT's motion could be heard, Henderson and Wells Marble reached a settlement with EFP/BHT. They agreed to return $54,433.74 in fees and expenses to the estate. (STP-99). By joint motion, they were dismissed from the appeal. EFP/BHT filed a second motion asking the Fifth Circuit to dismiss the appeal as moot in light of the settlement. Johnson, No. 20-60718 (5th Cir. Oct. 14, 2020), Dkt. #81. In opposition, the Trustee argued that the District Court's ruling, if

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allowed to stand without further review, would unfairly apply to all similarly situated administra- tive expense claimants who were not parties to the fee appeal. Johnson, No. 20-60718 (5th Cir. Oct. 26, 2020), Dkt. #82. She interpreted the District Court's decision as a blanket ruling that the Edwards Adversary Proceedings were neither necessary nor beneficial to the estate in any re- spect and all fees incurred by any estate professional in connection with the litigation are not compensable. She believed that EFP/BHT's motivation in contesting Henderson's and Wells Marble's fees was to obtain a favorable ruling on the compensability of fees incurred by any es- tate professional in pursuing the Edwards Adversary Proceedings. (STP-341 at 3-4; Dkt. #3530 at 279). EFP/BHT's two motions to dismiss were carried with the appeal. Addressing the motions first, the Fifth Circuit ruled that the appeal was not moot and the Trustee had standing because "the payment of fees to Henderson and Wells Marble directly af- fects the administration of the bankruptcy estate" and the Trustee is responsible for "ensuring that only proper payments are made from the bankruptcy estate." Community Home, 990 F.3d at

427. EFP/BHT's understanding of trustee standing was incorrect because "[a] trustee's standing comes from the trustee's duties to administer the bankruptcy estate, not from any pecuniary in- terest in the bankruptcy." Id.

As to the merits of the appeal, the Fifth Circuit ruled that "[v]iewed prospectively, pursuit of the adversary proceedings was 'necessary to the administration of the case' to resolve otherwise unsettled disputes about the priority of claims." Id. at 428. The Fifth Circuit's ruling reinstated the fees awarded by the first bankruptcy judge and affirmed the second bankruptcy judge's deci- sion on remand. Henderson and Wells Marble, nevertheless, agreed to honor the settlement and returned $54,433.74 to the Trustee. (STP-99).

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At Trial, the Trustee explained that she pursued the appeal after the Henderson/Wells Marble settlement because she believed that the District Court had misapplied Woerner and did not want its ruling to apply to other professionals in the Bankruptcy Case. (Dkt. #3528 at 158; Dkt. #3530 at 278-79). EFP/BHT again contend that the Trustee's real motive was to protect JW's fees. They argue that the Trustee's appeal not only failed to benefit the estate but actually harmed it. They ask this Court to disallow $132,149.50 for work related to the appeal that continued for three years from March 2018 to March 2021. (STP-279 at 32 n.42; Dkt. #3530 at 293). The Court does not view the Fifth Circuit's ruling that the Trustee had standing to pursue the Henderson/Wells Marble fee appeal—because she was "tasked with ensuring that only proper payments are made from the bankruptcy estate"—as a finding that all subsequent fees incurred by JW in pursuing that appeal are compensable. Id. at 427. The ultimate compensability of JW's fees related to the Edwards Adversary Proceedings was not before the Fifth Circuit. That issue is now before this Court.

The Court finds that the work expended by JW on appeal was reasonable and necessary at the time the work was performed. EFP/EFT define compensability too narrowly. They assert that the work is not compensable because there was no tangible, financial benefit to the estate. But that is not the standard. See 11 U.S.C. § 330(a)(3)(C); Woerner, 783 F.3d at 276 (compensable fees must be "'necessary to the administration' of a bankruptcy case or 'reasonably likely to benefit' the bankruptcy estate 'at the time at which [they were] rendered'"); Wolverine, 527 B.R. at 827 (holding that benefit to the estate "is not measured solely in monetary gain, assessed through a calculation of the monetary value to the estate of pursuing or defending against a claim as com- pared to the cost to the estate of doing so, but through a more holistic consideration").

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The question is whether the Trustee's and JW's actions were necessary and reasonable at the time. Because the Trustee is tasked with ensuring that claims are properly adjudicated, her ac- tions were reasonable and necessary to the administration of the estate. In other words, her ac- tions moved the Bankruptcy Case forward—a non-monetary benefit to the estate. This part of EFP/EFT's objection is overruled.

b. Denial of Estimated Fees Pursuant to Bankruptcy Rule 2016

To meet the administrative claim bar date in the Joint Plan, JW filed the JW Final Fee Appli- cation on August 23, 2023. (Dkt. #3524 at 167; STP-132). For the period after June 28, 2023, JW estimated its fees at $119,338.50. In a footnote in the JW Final Fee Application, JW contends that the estimated fees "are intended to cover numerous logistical tasks needed to consummate the Joint Plan, preparation of all professionals' final fee applications, preparation of the motion and order to close the case, and issues associated with the Estate's final state and federal tax re- turns." (STP-132 at 38 n.37). This footnote provides the only description of the work performed during this time. Since then, JW has not supplemented the JW Final Fee Application to include invoices documenting this work.

In September 2023, the UST and EFP/EFT filed objections to the payment of any "estimat- ed" fees. (Dkt. #3340; STP-279). On October 16, 2023, JW informally resolved the UST's objec- tion by sending him a copy of the invoices for work performed during the period covered by the estimated fees. (Dkt. #3525 at 136, 172). Even though EFP/EFT had lodged the same objection as the UST, JW did not send the invoices to EFP/EFT (or to the Court). Instead, JW's counsel waited six months and only one week before Trial to send EFP/EFT's counsel a copy of its pro- posed Trial exhibits, which included the invoices for JW's estimated fees. (Dkt. #3524 at 167; T-

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25). When questioned at Trial, JW's counsel had no legitimate excuse for the firm's failure to produce the invoices earlier. JW's response was that work continued after the Joint Plan's dead- line for filing final fee applications and that the Court imposed no deadline for JW to supplement the JW Final Fee Application before Trial. (Dkt. #3524 at 167-69). JW pointed out that HRK, the Trustee's accountant, likewise sought estimated fees but was allowed compensation for that work even though it failed to supplement its final fee application with invoices. (Dkt. #3407).

(1) Bankruptcy Rule 2016

Bankruptcy Rule 2016 requires those seeking compensation from the estate to "file an appli- cation setting forth a detailed statement of (1) the services rendered, time expended and expenses incurred, and (2) the amounts requested." FED. R. BANKR. P. 2016 (emphasis added); see Evangeline, 890 F.2d at 1326 (holding that a fee application must "be sufficiently detailed and accurate" so that "a court can make an independent evaluation as to what level of fees are actual, necessary and reasonable"). Rule 2016 is a mandatory and continuous requirement that imposes on estate professionals seeking compensation the burden of proving the reasonableness of any fees through full and timely disclosure. Id.; see generally 3 COLLIER ON BANKRUPTCY ¶ 329.02 (16th ed. 2025).

(2) Analysis

JW bears the burden of proving the reasonableness of its requested fees. Blackwood, 165 B.R. at 111. JW appeared for a ten-day Trial without providing EFP/EFT or this Court with in- voices for the period from June 28, 2023 to November 2023. See Jimenez v. The Tuna Vessel

"Granada," 652 F.2d 415, 420 (5th Cir. Unit A 1981) ("[E]ach party is entitled to know what is being tried, or at least the means to find out. Notice remains a first-reader element of procedural

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due process and trial by ambush is no more favored here than elsewhere."). Without these in- voices, JW has failed to substantially comply with Bankruptcy Rule 2016 for the period after June 28, 2023. See Anderson v. Anderson (In re Anderson), 936 F.2d 199, 204 (5th Cir. 1991) ("[A]bsent compliance with the Bankruptcy Code and Rules, an attorney has no absolute right to an award of compensation."). Substantial compliance with Rule 2016 is necessary for the Court to determine the reasonableness of JW's fees. The Court cannot award fees based on speculation. See In re Liberal Market, Inc., 24 B.R. 653, 664 (Bankr. S.D. Ohio 1983) (holding that billing for "anticipated" services was improper because § 330(a)(1) permits compensation only for actu- al services rendered); In re Jenson-Fairly Pictures, Inc., 47 B.R. 557, 581 (Bankr. D. Utah 1985) ("An applicant is not permitted to estimate fees and costs which will be incurred after filing the application and prior to the hearing hereon."). Moreover, JW prejudiced EFP/EFT by depriving them of the opportunity to object to any fees incurred after June 28, 2023. At Trial, EFP/EFT in- dicated that the missing invoices consisted of about 86 pages and the time entries totaled about $180,000 in fees. (Dkt. #3524 at 177-78). For JW to expect either this Court or EFP/EFT to re- view the invoices during the Trial was unreasonable.

The Court also rejects JW's he-did-it-too retort aimed at HRK's final fee application. With the Court's approval, HRK was retained in 2014 to assist the Trustee in preparing monthly oper- ating reports, handling employment tax and related issues, and to provide other accounting ser- vices.¹⁹²(Dkt. #614). The Court approved HRK's employment at an hourly billing rate of $250. In its final fee application filed on August 14, 2023, HRK requested $23,500 in estimated fees.

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(Dkt. #3311). These estimated fees were for work preparing the final monthly operating report, the final estate tax returns, and the calculations for the Trustee's final distribution report. (Dkt. #3311). EFP/EFT objected to payment of any fees for services that had not yet actually been per- formed. (Dkt. #3347). They made no other objection to HRK's fees. HRK provided EFP/EFT with the invoices when they became available and thereafter reached a settlement with EFP/EFT reducing its requested fees to $17,175, as reflected in a September 30, 2023 timesheet. (Dkt. #3311, Dkt. #3407). An agreed order granting HRK's final fee application was entered on No- vember 28, 2023, well before Trial began. (Dkt. #3311, #3347, #3407).

Unlike HRK, JW ignored EFP/EFT's objection by failing to provide the invoices before Tri- al. JW's failure to provide the invoices in a timely manner, thus rendering any settlement unlike- ly and preventing any meaningful review prior to Trial.

Accordingly, the Court disallows JW's "estimated" fees of $119,338.50 incurred after June 28, 2023. JW was forewarned of its failure to comply with Bankruptcy Rule 2016 in the objec- tions filed by the UST and EFP/EFT. Yet the firm sat on its invoices for seven months before Trial and never attempted to amend or supplement the JW Final Fee Application. The Court can- not award payment of these fees under these facts. This deduction may seem harsh but was self- inflicted.

c. Trustee Work Done by JW's Professionals

EFP/EFT contend that JW's fee applications contain numerous time entries for trustee- related work performed by lawyers and paralegals billing law-firm hourly rates. (STP-279 at 37).¹⁹³They challenge fees totaling $1,008,083.30. (STP-279 at 36-37, 42, 45, 47, 50, 52, 54, 56,

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58, 60, 62, 64, 66, 68, 71, 73, 75, 77, 79). Both the first and second bankruptcy judges reserved this issue for resolution in the final fee application, so that task now falls on this third judge.¹⁹⁴ Section 330(a) provides that a court may award estate professionals, including a trustee, "rea- sonable compensation for actual, necessary services rendered." 11 U.S.C. § 330(a)(1); ASARCO,

751 F.3d at 299. The statute does not define what services are "necessary." In a recent chapter 7 case, the Fifth Circuit noted two possible meanings. Sylvester v. Chaffe McCall, LLP (In re Syl- vester), 23 F.4th 543, 547 (5th Cir. 2022). "Necessary" might refer broadly to any service that is essential or indispensable to the trustee's functions or might refer more narrowly to professional services that a trustee could not perform without the professional's specific expertise. The Fifth Circuit concluded that the narrower definition was more consistent with the limits placed on the compensation of chapter 7 trustees under § 326. As previously explained by one bankruptcy judge:

If the court were to approve fees for services rendered by the attorneys represent- ing the estate that fall within the trustee's duties under § 704(a), then the court would be awarding a windfall to the trustee; and, by doing so, the creditors of the estate would suffer, as the trustee would be pocketing more funds from the estate that would otherwise be distributed to the creditors.

In re King, 546 B.R. 682, 693 (Bankr. S.D. Tex. 2016). The Sylvester Court also found support for the narrower definition in § 328(b), which allows a court to award compensation to a trustee for services rendered as counsel for the estate "only to the extent that the trustee performed ser- vices as attorney . . . for the estate and not for performance of any of the trustee's duties that are generally performed by a trustee without the assistance of an attorney." 11 U.S.C. § 328(b). The employment as the loan servicer.

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Bankruptcy Code's distinction (between necessary professional services and services "generally performed by a trustee without the assistance of an attorney") emphasizes that only necessary professional services are compensable under § 330(a)—even when the trustee and the attorney are the same person. Sylvester, 23 F.4th at 548. Accordingly, the Fifth Circuit held that "a court may compensate an attorney under § 330 only for services requiring legal expertise." Id. at 548-

49. Before reaching that holding, the Fifth Circuit cited the Second Interim Fee Order entered in this Bankruptcy Case for the proposition that "bankruptcy courts often note that compensable services under § 330(a) must require legal expertise." Id. at 548 (citing In re Cmty. Home Fin. Servs., No. 12-01703-EE, 2015 WL 6511183, at *11 (Bankr. S.D. Miss. Oct. 27, 2015)). This Court does not read the Sylvester Court's definition of "necessary" services as requiring a chapter 11 trustee to perform her statutory duties alone. See In re Comput. Learning Ctrs., Inc.,

285 B.R. 191, 208 (Bankr. E.D. Va. 2002) (noting that in a large case, it may be physically im- possible for a trustee to personally perform all statutory duties). Under § 327(a), a trustee may

"employ one or more attorneys, accountants, appraisers, auctioneers, or other professional per- sons . . . to represent or assist the trustee in carrying out the trustee's duties." 11 U.S.C. § 327(a). Barber testified that JW's paralegals assisted the Trustee in servicing the non-boarded loans and that the Trustee could not have logistically handled the work without help. (Dkt. #3524 at 84-85). Barber also posited that some of the charges EFP/EFT label as "trustee work" arose from their own conduct. He testified, "It has surprised me the number of entries where I was respond- ing to their request for information [and] assistance where they have objected, saying that's something the Trustee should have handled." (Dkt. #3524 at 84).

EFP/EFT argue that compensation for any and all trustee work, whether performed by the

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Trustee in her role as counsel for the estate, by another JW attorney, or by a JW paralegal, is sub- ject to the § 326 cap. In other words, EFP/EFT contend that any billing for trustee work must be included in the Trustee's fee application, not JW's, and because the Trustee's compensation is capped by virtue of § 326, so also is the compensation for JW's attorneys and paralegals who assisted her (because they cannot submit an application for compensation for trustee work apart from hers).

Given the Fifth Circuit's ruling in Sylvester that an attorney may be compensated under § 330(a) only for activities requiring legal expertise, the issue raised by EFP/EFT requires this Court to distinguish between trustee work and legal services. The boundary is not always clear. The burden of proving that its services crossed into territory requiring legal skills rests on JW. The duties of a chapter 11 trustee are set forth in § 1106, which provides, in pertinent part, that "a trustee shall," among other things, "perform the duties of the [chapter 7] trustee, as speci- fied in paragraphs (2), (5), (7), (8), (9), (10), (11), and (12) of section 704." 11 U.S.C. § 1106(a)(1). Those § 704 duties that apply to the Trustee¹⁹⁵in this Bankruptcy Case provide that: "[t]he trustee shall—

(2) be held accountable for all property received; ****

(5) if a purpose would be served, examine proofs of claims and object to the allowance of any claim that is improper;

****

(7) unless the court orders otherwise, furnish such information concerning the estate and the estate's administration as is requested by a party in interest;

(8) if the business of the debtor is authorized to be operated, file with the court, with the United States trustee, and with any governmental unit charged with responsibility for col-

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lection or determination of any tax arising out of such operation, periodic reports and summaries of the operation of such business, including a statement of receipts and dis- bursements, and such other information as the United States trustee or the court requires;

(9) make a final report and file a final account of the administration of the estate with the court and with the United States trustee;

11 U.S.C. § 704(a)(2),(5),(7)-(9). The Chapter 11 Trustee Handbook (T-41 at 67-68) issued by the UST's Office in 2004 pro- vides examples of services that fall within a trustee's duties and are not compensable as legal services "unless there is sufficient documentation to show that special circumstances exist":

1. preparing for and examining the debtor at the § 341(a) meeting in order to verify factual matters;

2. examining proofs of claim to eliminate duplicate claims and to identify those that are in addition to or differ in amounts from claims listed on the debtor's schedules;

3. investigating the financial affairs of the debtor;

4. furnishing information to parties in interest on factual matters;

5. collecting and liquidating assets of the estate by employing auctioneers or other agents and soliciting offers;

6. preparing required reports;

7. performing banking functions;

8. supervising professionals; and

9. engaging in any specific duties assigned pursuant to court order. EFP/EFT challenge two categories of work that appear in JW's fee applications: (1) manag- ing the bankruptcy cases of consumer borrowers and (2) preparing monthly operating reports. They argue that both categories fall within the Trustee's statutory duties.¹⁹⁶

(1) Servicing Loans of Consumer Borrowers in Bankruptcy

EFP/EFT object to all time entries for work they describe as the operation of CHFS's loan servicing business. They argue that business operations fall within the ambit of the Trustee's

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statutory duties and object to any servicing work performed by JW after ClearSpring began ser- vicing the loans.

In that regard, it is undisputed that ClearSpring did not service all loans. Some loans ClearSpring rejected outright because of missing documents. For loans that involved consumer borrowers who had filed bankruptcy, ClearSpring proposed to charge an additional fee per loan, but Dr. Edwards opposed that charge as too costly. As a result, those loans "were negotiated out of [ClearSpring's] servicing contract." (Dkt. #3528 at 10). The Trustee, therefore, remained re- sponsible for servicing loans that either lacked proper documentation and/or were held by con- sumer borrowers in bankruptcy. (Dkt. #3524 at 76, 78, 112; Dkt. #3526 at 126-27, 131-32; Dkt. #3532 at 25). Barber testified that he assigned three paralegals, Kilby Brabston ("Brabston"), Theresa Keys, and Cindy Hudson, to manage these unboarded loans. (Dkt. #3528 at 10). For this assignment, Brabston was the primary paralegal. (Dkt. #3524 at 111-12). She and other parale- gals continued performing loan servicing work for these unboarded loans until the end of the Bankruptcy Case. By that time, the number of borrower consumer cases had grown from about 200 to 556. (Dkt. #3524 at 112; Dkt. #3528 at 177; STP-111 at 112; STP-132 at 9). The services provided by these paralegals for this work were billed at hourly billing rates capped at $155 by the second bankruptcy judge in the Cumulative Interim Fee Order, and their rates never exceeded that cap during the pendency of the Bankruptcy Case.

The Court finds that the work performed by the paralegals regarding consumer bankruptcy cases required legal expertise and, therefore, may be paid independently of the Trustee's com- pensation as part of JW's fees. Although some of these time entries refer to proofs of claim, that work differs from the Trustee's statutory obligation under § 704 to "examine proofs of claims

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and object to the allowance of any claim that is improper" and from the example in the Chapter

11 Trustee Handbook of a trustee's duty to "examin[e] proofs of claim to eliminate duplicate claims and to identify those that are in addition to or differ in amounts from claims listed on the debtor's schedules." 11 U.S.C. § 704(a)(5); (T-41 at 67-68). The work performed by the parale- gals involved proofs of claim filed in the bankruptcy cases of consumer borrowers all over the country, not proofs of claim filed in this one Bankruptcy Case. Filing proofs of claim on behalf of CHFS in many jurisdictions requires expertise and experience, particularly because local bankruptcy rules are not uniform across the country. That CHFS and some of the consumer bor- rower were both in bankruptcy complicated matters. Accordingly, the Court overrules EFP/EFT's objection to this category of work.

(2) Preparing Statutorily Required Monthly Operating Reports

EFP/EFT complain that the Trustee used Brabston to act as the "assistant trustee" throughout the life of this Bankruptcy Case. (STP-279 at 39). They point to time entries on March 8 and 9, 2016, where both Brabston and the Trustee worked on the February 2016 monthly operating re- port:¹⁹⁷

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(Dkt. #1908-2 at 11, 13; Dkt. #1882-2 at 7). The Trustee's time entries appear in her fee applica- tions, whereas Brabston's appear in JW's fee applications. JW charged Brabston's time for draft- ing, preparing, or finalizing these reports every month.

Section 704(a)(8) requires a trustee to file with the court "periodic reports and summaries of the operation of such business, including a statement of receipts and disbursements, and such other information as the United States trustee or the court requires." 11 U.S.C. §§ 704(a)(8), 1106(a)(1); FED. R. BANKR. P. 2015(a)(5). The U.S. Trustee requires a trustee to file these re- ports on a monthly basis. See www.justice.gov/ust/chapter-11-operating-reports. Monthly operat- ing reports are "the life blood" of the chapter 11 process; they enable creditors to monitor the debtor's post-petition operations; they are "much more than busy work." In re Berryhill, 127 B.R. 427, 433 (Bankr. N.D. Ind. 1991). "[P]reparing required reports" is an example of work that is not compensable as a legal service in the Chapter 11 Trustee Handbook. (T-41 at 67-68). The Court finds that time entries for work performed by Brabston related to the preparation of monthly operating reports reflect a statutory duty of the Trustee.¹⁹⁸See 11 U.S.C. § 328(b);

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Sylvester, 23 F.4th at 547-48 (holding in a chapter 7 case that a court may not allow a trustee to pay other professionals for performing tasks that the trustee could have accomplished without professional help). JW did not meet its burden of proving that Brabston's activities required some legal expertise. For this reason, the Court disallows fees totaling $24,554 for work per- formed by Brabston related to monthly operating reports.¹⁹⁹

d. Duplication of Services

EFP/EFT point to places in JW's invoices where the Trustee's time entries for legal work are word-for-word the same as those that appear in the Trustee's invoices for "trustee work." (STP- 29; Dkt. #3526 at 81, 146-47). EFP/EFT provided the following comparison between time en- tries in the JW Fourth Fee Application (Dkt. #1908-2 at 8, 15, 17) and the Trustee's Third Fee Application (Dkt. #1882-2 at 2-3) where the Trustee appears to bill twice for the same work:

JW Fourth Fee Application Trustee's Third Fee Application

erating reports. (STP-129). That work is compensable and is allowed.

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Rather than making the reason for these ostensibly duplicative time entries clear or explain- ing them to opposing counsel during the seven months EFP/EFT's objection was pending, JW revealed for the first time at Trial that those entries represented time divided equally for work that could arguably fall under either trustee work or legal services. (Dkt. #3526 at 101; Dkt. #3528 at 201-07). The Trustee gave the following example: "[I]f I prepared the fee application for myself, that would be a split-time entry." (Dkt. #3526 at 103). Her explanation could not be gleaned from the time entries themselves, and she did not offer this explanation to EFP/EFT be- fore Trial. EFP/EFT's objection was appropriate given the lack of information but should never have been part of this Trial. Given the Trustee's testimony at Trial, the Court overrules EFP/EFT's objection to these time entries but notes that time, effort, and judicial resources could have been saved with a simple email or phone call.

e. Overstaffing

EFP/EFT question why JW involved so many professionals. The Court counts at least 82 dif- ferent professionals who worked on the Bankruptcy Case: 60 attorneys, an undisclosed number of summer associates, twenty paralegals, one unnamed practice support assistant, and one library research assistant (Joe Xu). (Dkt. #3524 at 70; STP-132 at 57-59; see e.g., STP-111 at 278 (time entry of practice support assistants)). JW maintains that the number is not as high as 82 because it did not charge for work performed by every timekeeper. (Dkt. #3524 at 71). As an example,

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JW points to Joe Xu, a library research assistant.²⁰⁰(STP-111 at 172). In addition, the Court found five other timekeepers whose time was not charged.²⁰¹(STP-132 at 57-59). Also, Barber testified that two associates, McLarty and Stacy Buchanan ("Buchanan"), left JW to work else- where, one partner (Ashton) retired, and one paralegal (Theresa Keys) passed away. (Dkt. #3524 at 36, 64). Those professionals had to be replaced. Even after removing the six timekeepers who did not charge any time plus the four who had replaced others, however, the number still remains high at 72. (Dkt. #3524 at 36).

Barber, as lead counsel for the Trustee, was responsible for staffing the Bankruptcy Case. He billed the estate the largest number of hours (4,518.50 hours or about 23% of the total hours billed). (STP-132 at 57-59; Dkt. #3524 at 18-20). Barber was assisted by the Trustee, who has more than 30 years of bankruptcy law experience. Both Barber and the Trustee are partners at JW's office in Jackson, Mississippi. The Trustee billed 2,333.10 hours, the third highest number of hours billed or about 12% of the total hours. (STP-132 at 57-59). McLarty, then an associate in JW's office in Jackson, Mississippi, billed the second highest number of hours at 2,473 or ap- proximately 12% of the total hours. Barber testified that he tried to staff the Bankruptcy Case using mainly attorneys in JW's Jackson office. Even so, Mintz in JW's New Orleans office billed almost as many hours as the Trustee. (STP-132 at 58). Together, Barber, the Trustee, McLarty, and Mintz accounted for about 55% of total hours billed.

The remaining hours were billed by a rotating group of attorney associates and specialists. Barber testified that he called upon attorneys in other locations when they had expertise and spe-

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cialized knowledge about a particular issue or when no JW attorney in Jackson, Mississippi was available. (Dkt. #3524 at 25-26, 71). Some timekeepers were subject matter experts who handled discrete tasks and had no further involvement in the Bankruptcy Case. (Dkt. #3524 at 71). By the Court's count, only nine attorneys billed more than 100 hours, and twenty-four attorneys billed fewer than ten. EFP/EFT provide several examples of time entries that purportedly show that multiple professionals billed hours for the same work. (STP-279 at 40, 43, 46, 48,50, 52-53, 58,

61, 63, 65, 67, 69, 71, 73, 76, 78, 80).

JW denies that there was any duplication of effort and insists that it worked assiduously to avoid duplicate billings. (Dkt. #3524 at 71). At Trial, Barber surmised that the best explanation for the high number of timekeepers was the varied areas of law involved in the Bankruptcy Case. (Dkt. #3524 at 71). As a further explanation, Barber testified that he sometimes assigned differ- ent sections of the same brief to different attorneys. (Dkt. #3524 at 70-71). The Fifth Circuit has recognized that when considering the reasonableness of hours expend- ed, "the trial judge should weigh the hours claimed against [the judge's] own knowledge, experi- ence, and expertise of the time required to complete similar activities. If more than one attorney is involved, the possibility of duplication of effort along with the proper utilization of time should be scrutinized." Abrams v. Baylor College of Med., 805 F.2d 528, 535 (5th Cir. 1986) (citing Johnson, 488 F.2d at 717). Here, the Court finds that JW's use of so many professionals in this Bankruptcy Case resulted in duplication of effort. Hensley, 461 U.S. at 434 (holding that courts should exclude "hours that are excessive, redundant, or otherwise unnecessary"). Although JW insists that it worked hard to avoid duplicative billings, the invoices demon- strate that multiple JW professionals performed the same tasks. See Hefren v. Murphy Expl. &

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Prod. Co., No. 12-1899, 2015 WL 5099133, at *6 (W.D. La. Jan. 20, 2015) (reducing JW's fees by 10% to account for excessive and duplicative billings by multiple attorneys performing the same tasks). The Court is not convinced otherwise by JW's contention that it has already "volun- tarily" reduced about $203,000 in fees. (STP-132 at 61; Dkt. #3500, Dkt. #3524 at 40-43, 46-47). These reduced fees resulted in large part from the second bankruptcy judge's removal of all in- terim fees for work defending fee applications as dictated by the Supreme Court's ASARCO de- cision. The Court does not view these reductions as voluntary or as an exercise in billing judg- ment. Moreover, there was no evidence that this reduction was tied to an attempt by the firm to avoid unnecessary duplication of services rather than merely comply with bankruptcy law. The hours in dispute can be divided into two broad categories: (1) hours expended reviewing documents, drafting briefs, and preparing for proceedings ("Reviewing, Drafting & Preparing") and (2) hours billed for attending a proceeding ("Attending"). For the reasons explained below, the Court finds that JW engaged in some duplicative billing and reduces those hours accordingly.

(1) Reviewing, Drafting & Preparing

The Court begins with the hours spent by multiple attorneys reviewing the same orders and opinions, drafting the same motion, and preparing for the same proceeding. It is clear that more than one attorney billed for performing the same work and that the duplicated time was exces- sive. This Bankruptcy Case was simply overlawyered. See, e.g., Butler, Snow, O'Mara, Stevens & Cannada v. Henderson (In re White), 171 B.R. 554 (S.D. Miss. 1994). Reviewing EFP/EFT's Reply Brief. Four attorneys billed 3.6 hours (Barber 1.7; Mintz 1; Ashley .40 and McLarty .50) on March 30, 2016 at a cost of $1,115 to review a seventeen-page brief filed by EFP/BHT in the Home Improvement Loans Adversary. (STP-113 at 33). That re-

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view was independent of any other work and appeared to be for informational purposes only. Barber, lead counsel, billed 1.7 hours, which the Court allows. All other time is disallowed. The disallowance of 1.9 hours reduces the fees requested in the JW Fourth Fee Application by $414. Reviewing Stay Order. Three attorneys billed 7.3 hours (Barber 1.6, Vance .3 and McLarty 5.4) on August 27-29, 2018 at a cost of $2,098.50 to review the District Court's three-page order staying execution of portions of the Global Opinion. (STP-118 at 73-75). Most of that time was billed by McLarty, an associate, who not only reviewed the stay order but "research[ed] potential strategies." (STP-118 at 73). Because of the stay order, the confirmation hearing on the Trustee's Second Amended Plan set for August 29, 2018 was cancelled sua sponte. (Dkt. #2410). The Court allows only the hours billed by Barber (1.6) and disallows the hours billed by McLarty (5.4) and Vance (.3). The disallowance of 5.7 hours reduces as excessive the fees requested in the JW Ninth Fee Application by $1,498.50.

Reviewing Appellate Opinion. Two partner-level attorneys and one paralegal billed 2.3 hours (Barber 1, Trustee 1, Brabston .3) on April 27, 2022 at a cost of $976.50 to review the Fifth Cir- cuit's decision in the appeal of the Global Opinion. (STP-129 at 54-56). The Court allows the hours billed by Barber but disallows all hours billed by the Trustee and Brabston, a paralegal. As lead counsel, Barber had to be kept apprised of the status of the Bankruptcy Case and all related proceedings. The Trustee's time reviewing the appellate decision was also necessary but should have been billed in the Trustee's Eighteenth Fee Application.²⁰²(STP-26 at 29). No reason ap- pears in the invoices for Brabston's time. The disallowance of 1.3 hours reduces the fees re-

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quested in the JW Twentieth Fee Application by $496.50. Drafting Trustee's Motion to Vacate. Four attorneys billed 75.6 hours at a cost of $29,265 to research and draft the Trustee's motion to set aside the District Court's order staying execution of the Global Opinion filed on January 16, 2020. The motion is ten pages long. (Case No. 18-cv- 00154-CWR-LGI, Dkt. #30).

Specifically, Lucas Self ("Self") billed 21.5 hours at a cost of $5,805 in the JW Twelfth Fee Application. No other hours were billed in the JW Twelfth Fee Application for this work. In the JW Thirteenth Fee Application, he billed .5 hours at a cost of $135; the Trustee billed 48 hours at $21,062.50; Barber billed 1.5 hours at $622.50, and Mintz billed 4.1 hours at $1,640. Work expended by both a partner and an associate drafting the same pleading is not unusual and can even be more efficient because of the associate's lower hourly rate. Staffing this task with three experienced attorneys (Trustee, Barber, and Mintz) and one associate (Self), however, was excessive under these facts where the time entries reveal no effort to divide the work and the hours are excessive. Accordingly, the Court disallows the fees of Barber and Mintz and 50% of the hours expended by the Trustee and Self.

The fees disallowed as excessive in the JW Twelfth Fee Application total $2,902.50 and in the JW Thirteenth Fee Application total $12,861.25. The Court allows $13,501.25 in fees for work researching and drafting the Trustee's motion to vacate the stay. Preparing for EFP/BHT Motion to Stay Hearing. Four attorneys billed 14.2 hours (Barber 6.2, Mintz 2.5, Trustee 1.8, McLarty 3.7) on June 18-19, 2018 at a cost of $4,845 preparing for and attending a hearing in District Court on EFP/BHT's motion to stay execution of portions of the Global Opinion. (STP-117-1 at 62-64). The Court finds that time expended by one partner

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(Barber) and one associate (McLarty) performing this work was reasonable, but time expended by two additional attorneys (the Trustee and Mintz) was duplicative and unnecessary. The Court disallows the hours expended by the Trustee (1.8 hours) and Mintz (2.5 hours) reducing the fees requested in the JW Eighth Fee Application by $1,595.

Preparing for Remand Trial. Four attorneys and one paralegal billed 465.20 hours (Barber, Trustee, Mintz, De Leon, and Brabston) from January 9, 2023 to March 28, 2023 at a cost of $182,234.50 to prepare for the Remand Trial. (STP-131 at 111). The issues in the Remand Trial were significant but fewer than those in the Edwards Adversary Proceeding trial. Staffing the Remand Trial with three partners and one associate was unreasonable. The Court allows only the hours expended by two established attorneys and one experienced paralegal. Because the parties announced a settlement the morning of the Remand Trial, the Court does not know which attor- neys would have actually participated. The time entries show that most of the work preparing for the Remand Trial was performed by the Trustee and Barber. The Court, therefore, allows their hours on the ground they were likely to play a key role in the Remand Trial. The Court also al- lows Brabston's hours. The Court disallows the hours expended by Mintz, whose work was mostly duplicative. The disallowance of Mintz's hours (66.10) reduces the fees requested in the JW Twenty-Second Fee Application by $29,745.

(2) Attending

The second broad category are hours expended by multiple attorneys attending the same hearing, trial, or deposition. When multiple attorneys attend trials or hearings, "we expect all of the professionals attending to have a role. . . . If two or more professionals are billing time, they each should make a contribution." In re Jefsaba, 172 B.R. 786, 801 (Bankr. E.D. Pa. 1994).

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Here, some invoices show multiple JW attorneys billing hours for attending the same proceeding when only one or two attorneys could have possibly played any substantive role in that proceed- ing. See Abrams, 805 F.2d at 535 ("The time of two or three lawyers in a courtroom or confer- ence when one would do may be obviously discounted."). The UST Guidelines note that "[i]f more than one professional attends a hearing or conference, the applicant should explain the need for multiple attendees." UST Guidelines for Reviewing Applications for Compensation and Re- imbursement of Expenses Filed under United States Code by Attorneys in Larger Chapter 11 Cases, 78 Fed. Reg. 36248, 36254 (June 17, 2013); (T-43).

Because JW ordered transcripts of almost every hearing and status conference in the Bank- ruptcy Case and in the Home Improvements Loan Adversary,²⁰³it is unclear why so many JW attorneys were present at almost every proceeding. Why couldn't some attorneys simply review the transcript, if and when necessary? See Flowers v. Wiley, 675 F.2d 704, 705 (5th Cir. 1982) ("[T]here should have been no compensation for hours spent . . . in the passive role of an observ- er while other attorneys performed"). The Court does not adopt a flat rule that more than one at- torney from the same firm may never attend the same proceeding but does require an explanation for the necessity for such. At Trial, JW made no attempt to do so. As discussed below, the Court disallows a large portion of these hours.

Edwards Adversary Proceedings Trial: Three attorneys (Barber, Mintz, and McLarty) billed 108 hours at a cost of $34,440 to attend the trial of the Edwards Adversary Proceedings. This third bankruptcy judge did not preside over that trial, which was held over five days from Octo-

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ber 30 through November 2, 2017, and on November 27, 2017. The transcripts of the trial show that all three attorneys participated in the trial: Mintz handled opening statements, examined wit- nesses on October 30, 2017 and November 1, 2017, and presented closing arguments on Novem- ber 27, 2017; Barber examined all witnesses on October 30, 2017 and October 31, 2017; and McLarty examined one minor witness on November 2, 2017. (Adv. 12-00091-NPO, Dkt. #340- 343, #352). Barber and Mintz handled most of the trial, but McLarty also contributed. The Court cannot find fault with the appearance of two partners and one associate at a trial involving so many facts and varied specialties of law, as shown by the Global Opinion. The Court overrules EFP/EFT's objection to these fees.

Oral Argument Before the Fifth Circuit on Global Opinion. Four attorneys (Barber, Trustee, Buchanan, and Mintz) at a cost of $65,367.50 prepared for and attended the oral argument on the appeal of the Global Opinion before the Fifth Circuit on October 5, 2021, but only Mintz argued. JW asserts that it did not bill the estate for Buchanan's or the Trustee's time to attend the oral argument, but the invoices show that Buchanan billed the estate $252 for .8 hours (STP-127 at 75), and the Trustee, $675 for 1.5 hours (STP-127 at 76). Given the testimony at Trial, these de minimis fees were probably billed by mistake and will be disallowed. The Court finds that the appearance of Barber and Mintz at a Fifth Circuit oral argument was reasonable. Barber's presence was necessary because of his role as lead counsel, and Mintz ar- gued the appeal. The total disallowed fees in the JW Eighteenth Fee Application related to the time spent on oral argument is $927.²⁰⁴

Fifth Circuit Mediation. Two attorneys billed 8.3 hours (Barber 3.4 and Mintz 4.9) on De-

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cember 9, 2021 to participate in the Fifth Circuit's mediation conference. (STP-128 at 55). EFP/EFT assert that four attorneys and one paralegal attended the mediation, but the invoices show that JW charged the estate only for the hours expended by Barber and Mintz. Although both the Trustee and Buchanan, as associate, were present, JW did not charge any fees (or only $3.20) for their time. (Dkt. #3524 at 60; STP-128 at 55).

The mediation was conducted by video and lasted about two hours. Mintz expended 4.9 hours attending the mediation on December 9, 2021 at a cost of $2,205 and an additional six hours traveling between his office in New Orleans, Louisiana and Jackson, Mississippi, the day before the mediation at a cost of $1,350. (JW charged half of his travel time). Because the media- tion was held by video conferencing, it is unclear why Mintz's travel was necessary. The Court disallows all hours billed for Mintz's travel time (3 hours). The disallowance of Mintz's travel time reduces the fees requested in the JW Nineteenth Fee Application by $1,350. Relatedly, EFP/EFT also dispute the number of attorneys who billed time for preparing for the mediation. Four attorneys billed 30.80 hours (Barber 6.7, Trustee 1.7, Mintz 16.3, and Bu- chanan 6.1) at a cost of $13,44.50. Three of the four attorneys were partners at JW. For the same reason discussed above, the Court allows the hours expended by Barber and Mintz and disallows the hours expended by the Trustee (1.7 at $765) and Buchanan (6.1 hours at $1,924.50). Alt- hough the Trustee's presence may have been necessary to fulfill her statutory duty to "object to the allowance of any claim that is improper," all of her time should have been billed in the Trus- tee's Seventeenth Fee Application.²⁰⁵11 U.S.C. § 702(a)(5). The disallowed fees in the JW

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Nineteenth Fee Application related to the Fifth Circuit's mediation total $4,039.50.²⁰⁶ Expert Deposition. Three attorneys (Trustee, Mintz and De Leon) attended the deposition of Aucoin, a forensic accountant, in Baton Rouge, Louisiana, on March 3, 2023. (STP-131 at 85). Aucoin testified at the Edwards Adversary Proceeding trial in late 2017, and his testimony was necessary to update his previous reports. The Court finds that the attendance of two partners and one associate at an expert deposition was excessive. The transcript was not submitted as an ex- hibit, so the Court cannot determine which attorney actually conducted the deposition. For that reason, the Court allows only the hours of the two partners and disallows the hours of the associ- ate, De Leon. The disallowance of 5.5 hours reduces the fees requested in the JW Twenty- Second Fee Application by $2,090.

EFP/EFT also complain about the hours expended by De Leon traveling. The day before the deposition, March 2, 2023, De Leon traveled from New Orleans to Baton Rouge and back to New Orleans charging fees of $532 for 1.4 hours (because her travel time was halved). The next day, March 3, 2023, she traveled from New Orleans to Baton Rouge and then on to Houston, Texas (where her office is located) charging fees of $1,406 for 2.2 hours. The Court disallows her travel time, which reduces the fees requested in the JW Twenty-Second Fee Application by an additional $1,938.

(3) Summary

Reductions for duplicative billing total 142.10 hours and fees of $58,507.25. The table below sorts the deductions by fee application:

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JW Fee Application Hours Fees JW Fee Application Hours Fees

JW Fourth Fee JW Eighteenth Fee Application 1.9 $414.00 Application 2.3 $927.00 JW Eighth Fee JW Nineteenth Fee

Application 4.3 $1,595.00 Application 10.80 $4,039.50 JW Ninth Fee JW Twentieth Fee

Application 5.7 $1,498.50 Application 1.3 $496.50 JW Twelfth Fee JW Twenty-Second Fee

Application 10.75 $2,902.50 Application 75.20 $33,773.00 JW Thirteenth Fee

Application 29.85 $12,861.25

f. Billing for Administrative/Clerical Work

EFP/EFT complain that JW billed the estate for clerical work. They object to entries for elec- tronically downloading and reviewing pleadings, filing documents, and calendaring deadlines. (STP-279 at 40). The timekeeper for most entries of this nature was Brabston, the paralegal as- signed to manage the numerous borrower bankruptcy cases. (STP-111 at 105-11). JW described her as the primary paralegal for these consumer bankruptcy cases, which eventually grew to 556 in number. (STP-111 at 112; STP-132 at 9). She had other duties as well. She monitored the Guaranty Action filed against Dickson by EFP/BHT and assisted the Trustee in preparing and e- filing monthly operating reports. (STP-112 at 34, 55).

Clerical work is an integral part of a law office but is generally considered to be part of the cost of an attorney's overhead and not separately billable to the client. In re Contreras, 18- 30995, 2019 WL 1868622, at *6 (Bankr. S.D. Tex. Apr. 25, 2019). "[T]yping, data entry, check- ing court dockets or court dates, manually assembling, collating, marking, processing, photocop- ying, or mailing documents . . . is clerical in nature and not compensable. Such tasks are tradi- tionally charged to overhead and included in the professional's hourly rate." In re CF&I Fabri- cators of Utah, Inc., 131 B.R. 474, 492 (Bankr. D. Utah 1991) (citations omitted). The U.S. Trustee Guidelines (T-43) shed light on the subject of overhead costs:

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Without limitation, the United States Trustee will ordinarily consider the following ex- penses to be overhead: Word processing, proofreading, secretarial and other clerical ser- vices, rent, utilities, office equipment and furnishings, insurance, taxes, telephone charges

. . . and library and publication charges. Here, Brabston did not charge for typing, data entry, photocopying documents, or the like. The tasks she performed required professional judgment. She ensured proper coordination and atten- tion to the consumer bankruptcy cases filed by borrowers. For each consumer bankruptcy case, she reviewed the docket, downloaded pleadings that she judged to be relevant, and calendared important deadlines. In re McNally, No. 06-10073, 2006 WL 2348687, at *12 (Bankr. D. Colo. Aug. 10, 2006) (holding that calendaring deadlines involves professional judgment because of possible fatal consequences). She performed this same task with respect to the Guaranty Action. Although many of her time entries could include more fulsome descriptions of the documents she reviewed and downloaded, it is clear from her job assignment that the work she performed required professional judgment and was not clerical. This finding is supported by Brabston's years of experience as a bankruptcy paralegal and the complexity of the tasks she performed. As to her time entries for e-filing monthly operating reports and other documents, the Court notes that in recent years, attorneys and their staff have acted as docketing clerks for the Bank- ruptcy Court's CM/ECF system. They are trained for the position. This Court holds in-person seminars and its website includes guides, webinar materials, and training videos on ECF filing procedures.²⁰⁷E-filing documents requires professional judgment in determining the proper event and linking to the proper document already on the docket. It is not just a matter of delivering pa- pers to the clerk's office at the courthouse. It is thus not surprising or unusual that certain time entries reflect that Brabston billed a task as e-filing. Id. at *13; see In re Hungry Horse, LLC,

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2017 WL 3638182, at *4 (Bankr. D.N.M. Aug. 23, 2017) (acknowledging that "some complex e- filing in chapter 11 cases may be compensable").

Paralegals have an important role to play in the bankruptcy process. Work by an experienced paralegal may be more efficient and economical than similar work performed by an associate attorney. Under these facts, the Court rejects EFP/EFT's argument that Brabston cannot be com- pensated for the work she performed monitoring borrowers' bankruptcy cases, the Guaranty Ac- tion, calendaring deadlines, and e-filing documents. Those tasks are not clerical in nature under the facts of this Bankruptcy Case. Here, Brabston had to review dockets in cases filed across the country. Each bankruptcy court's docket is different, meaning that Brabston would have had to rely on her experience and judgment to locate applicable and non-uniform rules in each case. This work is more than clerical. The Court overrules EFP/EFT's objection to these fees.

g. Legal Work Done by Trainees/Block Billing

Block billing is a "time-keeping method by which an attorney lumps together the total daily time spent working on a case, rather than itemizing the time expended on specific tasks." Harris

v. Allstate Ins. Co., Case No. 07-8789, 2009 WL 86673, at *3 (E.D. La. Jan. 12, 2009) (citations omitted). "This practice can make it impossible for the court to determine the reasonableness of the hours spent on each task; particularly, when the generic labels are used and the Court cannot determine whether the tasks are related or which matters the 'calls' or 'correspondence' ad- dress." Id.

All prior interim fee orders denied JW any compensation for the time entry billed for summer law clerks in the JW First Fee Application in the amount of $6,072 because of impermissible

"block billing." Because JW has agreed to remove these fees from the JW First Fee Application,

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there is no need for the Court to disallow them. The JW Fifth Fee Application, however, also in- cludes impermissible block entries for an unknown number of law clerks and a brief, generic de- scription of the work performed. The Court finds this entry is likewise noncompensable and dis- allows $1,813.50 in the JW Fifth Fee Application.

h. Travel Time

JW billed some travel time at full hourly rates.²⁰⁸Caplin & Drysdale Chartered v. Babcock & Wilcox Co. (In re Babcock & Wilcox Co.), 526 F.3d 824, 828 (5th Cir. 2008). The UST raised this objection informally, and JW agreed before Trial to reduce all travel time by half. Those re- ductions total $21,952.25 as reflected in the following table:

JW First Fee JW Sixth Fee

Application $199.00 Application $3,727.50

JW Amended Second Fee JW Seventh Fee

Application $4,015.25 Application $2,712.50

JW Third Fee JW Eighth Fee

Application $2,375.00 Application $1,050.00

JW Fourth Fee JW Twenty-First

Application $3,000.00 Application $1,350.00

JW Fifth Fee

Application $3,523.00

i. Excessive Research on Caulkett

Ashton, an attorney in JW's Birmingham, Alabama office, was in charge of handling issues that arose in the consumer bankruptcy cases of CHFS's borrowers. (Dkt. #1908 at 21). At one point, the number of borrower bankruptcy cases rose to 556. (STP-132 at 9). Most of them were filed under chapter 13. After Ashton retired in 2017, an associate took over his responsibilities. (Dkt. #1908 at 21). EFP/BHT challenge the time expended by Ashton reviewing the Supreme Court's then recent decision in Caulkett.

In Caulkett, the Supreme Court ruled in a five-page opinion that a debtor in a chapter 7 bank-

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ruptcy may not void a junior mortgage lien under § 506(d) even when the debt owed on a senior mortgage lien exceeds the current value of the collateral. Caulkett, 575 U.S. at 797. In the JW Third Fee Application, Ashton expended 21.7 hours at $350 per hour ($7,595) to consider whether the holding in Caulkett applied to a debtor in a chapter 13 bankruptcy. The Court finds that 21.7 hours of Ashton's time billed for researching Caulkett excessive and beyond the time reasonable and necessary for handling the consumer cases.²⁰⁹The Court reduces the hours to 4.5. This reduction in hours (17.2) reduces Ashton's total fees to $1,575 in the JW Third Fee Appli- cation.²¹⁰The remaining fees of $2,852.50 are disallowed.

j. Defending Fee Applications/Motion To Transfer Fee Disputes

By statute, a law firm is allowed to be compensated for the cost of preparing a fee applica- tion. See 11 U.S.C. § 330(a)(6) ("Any compensation awarded for the preparation of a fee appli- cation shall be based on the level and skill reasonably required to prepare the application."). The Bankruptcy Code, however, does not authorize an award of "fees for defending a fee applica- tion." ASARCO, 576 U.S. at 135 (emphasis added). The U.S. Supreme Court released ASARCO on June 15, 2015, shortly after JW had agreed to serve as the Trustee's counsel. Id. In ASARCO, the bankruptcy court awarded the debtor's law firms approximately $124 mil- lion in fees plus "over $5 million for time spent litigating in defense of their fee applications." At the first level of appeal, the district court affirmed. On further appeal, the Fifth Circuit reversed, holding that "the [Bankruptcy] Code contains no statutory provision for recovery of attorney fees for defending a fee application." ASARCO, 751 F.3d at 301. The Fifth Circuit observed that

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"[t]he primary beneficiary of a professional fee application, of course, is the professional." Id. at

299. The U.S. Supreme Court affirmed. JW complains that ASARCO had the effect of further reducing (or diluting) its already dis- counted billing rates. Barber opined at Trial that had ASARCO been issued earlier, JW probably would not have agreed to charge "discounted" rates. (Dkt. #3524 at 24). The first bankruptcy judge addressed JW's late-notice argument in his order denying the Motion to Transfer Fee Dis- putes. (STP-212). He pointed out that oral argument before the Fifth Circuit had taken place in 2013, well before the appointment of the Trustee. In other words, JW should have been aware of the issue before its retention.

In response to ASARCO, JW purportedly removed all time entries for work defending its own fee applications but initially did not remove time entries for work defending the fee applications of other professionals in the Bankruptcy Case. In the Cumulative Interim Fee Order, the second bankruptcy judge interpreted ASARCO as holding that the estate should not bear the cost of de- fending attorneys' fees in the absence of a specific statute departing from the "American Rule."

Based on that proposition, the second bankruptcy judge ruled that ASARCO applied regardless of whether the retained professional defended its own fees or the fees of another professional. (STP-91 at 40) (citing In re Boomerang Tube, Inc., 548 B.R. 69, 71 (Bankr. Del. 2016)). As a result, the second bankruptcy judge disallowed time entries totaling $4,785 in the JW Amended Second Fee Application and $22,834 in the JW Third Fee Application. JW has agreed to accept these fee reductions in the Cumulative Interim Fee Order. (Dkt. #3525 at 161-62). This Court has found additional time entries for defending fee applications and disallows those fees totaling

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$27,167.50.²¹¹ The Court views the time expended on the Motion to Transfer Fee Disputes (STP-211) as work defending JW's and the Trustee's fee applications that is non-compensable under ASARCO. The invoices attached to the JW Fourth Fee Application show that JW expended 45.9 hours on the Motion to Transfer Fee Disputes but did not charge for this work. (STP-113 at 152- 56, 158, 160, 163, 168, 170, 172-74, 182, 185.)

k. Fees Incurred after March 2023 in Excess of $75,000 Holdback in Joint Plan

EFP/EFT contend that the settlement reached in March 2023, as memorialized in the Joint Plan, carved out only $75,000 to pay all professionals for any work needed to conclude the estate from that date forward. (STP-279 at 15). The provision in the Joint Plan follows below:

On the Effective Date,²¹²the Trustee will convey the remaining Cash in the Estate after Classes 1 [secured claims], 2 [priority unsecured claims], and 4 [general unsecured claims] are paid in full, less $75,000, which will be held by the Trustee and not disbursed without further order of the Court. These funds will be available to pay the Estate Profes- sionals for the fees and expenses incurred in confirming this Plan, after notice and a hear- ing.

(STP-274, Art. IV, § 4.3(vi)) (emphasis added). They complain that JW's request for $90,029 in fees and $6,540.26 in expenses for services rendered from April 1 through June 27, 2023 exceeds the $75,000 limit in the Joint Plan. 213 EFP/EFT's calculation includes all time billed by JW from April 1 through June 27, 2023 and all expenses for which JW seeks reimbursement during this period. In response, JW contends that the fees that the firm incurred for formulating and drafting the Joint Plan totaled only $59,450, as reflected in the JW Final Fee Application under the task

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code "Plan and Disclosure Statement." (Dkt. #3528 at 187; STP-132 at 93). The Court finds that to the extent the $75,000 holdback provision operates as a cap, it clearly applied only to the fees and expenses incurred by estate professionals in confirming the Joint Plan.²¹⁴The Court's review of the individual time entries shows that JW billed $61,599 for such work.²¹⁵(STP-274). Its review of the expenses shows that none was incurred for work on the Joint Plan. Because the amount of fees and expenses ($61,599) sought by JW is less than $75,000, the Court overrules EFP/EFT's objection on these grounds.

5. Lodestar Calculation

Having determined the reasonableness of JW's hourly billing rates and the hours expended, the Court makes its calculation of the lodestar by multiplying the determined hourly rates by the hours expended. For the JW First, Amended Second, and Third Fee Applications, JW seeks only the amounts awarded by the second bankruptcy judge in the Cumulative Interim Fee Order, which both reduced and added fees. At Trial, JW announced that it had agreed to reduce addi- tional fees as part of a settlement reached with the UST. These fees and the fees disallowed by this judge are shown below:

Description Hours Fees

Confirmation Hearing 3.0 $1,320.00 Preparing JW Final Fee Application 12.0 $5,813.00 Travel Time 65.5 $21,952.25

Hourly Billing Rate—De Leon n/a $22,849.00 RICO 142.00 $33,289.50

Motions to Withdraw, Intervene & Consolidate 82.10 $51,589.00 Penalty Plan 321.30 $112,379.90

Estimated Fees n/a $119,338.50

Trustee Work 147.10 $24,554.00

Overstaffing 142.10 $58,507.25

Block Billing 11.70 $1,813.50

Excessive Research (Caulkett) 13.60 $2,852.50 Defending Fee Applications 102.60 $27,167.50

TOTAL 1,044.00 $483,425.90

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Subtracting the above reductions ($483,425.90) from the fees requested ($5,710,064.50), the Court calculates the lodestar to be $5,226,639.60.

6. Adjustments to JW's Fees

JW's rate restoration argument would require this Court to revisit its lodestar analysis, which it declines to do. The Court has already provided a lengthy explanation as to why the hourly bill- ing rates charged in the interim fee applications, with one exception, were reasonable—neither too low nor too high. That ruling forecloses JW's request for a $920,000 rate restoration. The Court, however, addresses some of the arguments posited by JW in support of a rate restoration through its analysis of § 330(a) and the Johnson factors. As previously noted, § 330(a) and the Johnson factors are part of the framework used to determine the compensation of professionals. Pilgrim's Pride, 690 F.3d at 656.

a. Adjustment to JW's Fees under § 330(a)(3)

The Court finds that no adjustment to the lodestar is necessary based on the factors listed in § 330(a)(3). The Court has already considered each of these factors in its lodestar analysis.

1. Time Spent

According to the JW Final Fee Application, JW logged 20,043.60 hours in the Bankruptcy Case, which the Court has reduced to 18,999.60. (STP-132 at 55-59). No further adjustment to the time spent is necessary under § 330(a)(3).

2. Rates Charged

For the reasons previously discussed, the Court finds that the actual hourly billing rates charged by JW's attorneys, paralegals, and other professionals, without any upward or down- ward adjustment, are within the prevailing market rates in this judicial district with one excep-

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tion. That exception is the hourly billing rate of an associate, De Leon, which the Court reduced to $250. No further adjustment is necessary.

3. Necessary Services

As discussed at length in its lodestar analysis, the Court has reduced JW's fees to account for services that were not necessary to the estate. No further adjustment is necessary.

4. Reasonable Amount of Time

The Court finds that the time calculated in the lodestar, as adjusted, is reasonable. No further adjustment is necessary.

5. Skill & Experience

In representing the Trustee, JW was able to bring numerous areas of legal experience to ad- dress issues confronting the Trustee in the areas of tax, mortgage regulatory, real estate mortgag- es, criminal, bankruptcy and insolvency, and international transactions. The rates allowed by the Court reflect the skill and expertise of JW's attorneys and paraprofessionals. No adjustment is necessary.

6. Customary Compensation Outside of Bankruptcy

There was no testimony or other evidence presented at Trial as to whether the rates billed by JW are comparable to the rates charged by attorneys with similar expertise in non-bankruptcy cases. No adjustment is necessary.

b. Adjustment to JW's Fees under Johnson Factors

Lastly, the Court considers whether the lodestar requires any additional adjustments based on the factors enumerated in Johnson. Because the Johnson factors arose from fee-shifting civil rights actions, which permits a fee award for the "prevailing party," some of the factors appear to

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have limited relevance in the context of a bankruptcy case. See Pilgrim's Pride, 690 F.3d at 665- 55 (noting the significant textual and structural differences between fee-shifting and bankruptcy cases); El Paso Refinery, L.P., 257 B.R. at 826-27. In addition, the Fifth Circuit has held that the following four Johnson factors are subsumed in the lodestar calculation: (1) time and labor re- quired; (2) novelty and difficulty of the issues; (3) skill required; and (4) customary fee.

1. Time & Labor Required

The Court finds that the time expended by JW's attorneys, paralegals, and other professionals as reduced herein pursuant to the lodestar calculation, is reasonable. No further adjustment is necessary.

2. Novelty & Difficulty of the Issues

JW touts the complexity of this Bankruptcy Case. After reviewing the docket in the Bank- ruptcy Case, transcripts of hearings and trials, and substantive orders and opinions issued by this Court and others on appeal, Geno opined that "[t]here was as much litigation in this case for the number of creditors involved as any case I think I've seen or read about." (Dkt. #3527 at 115-

16). The complexity originated from Dickson's and Dr. Edwards' failure to properly document their business transactions, which, in turn, created thorny cash collateral issues. Also contributing to the complexity were Dickson's later criminal actions. These problems are not rare. JW, as a regional firm, was expected to be able to deal with these issues, and the firm did so. Its expertise is reflected in the actual hourly rates and hours billed for which JW is compensated in the lode- star amount. No adjustment is necessary.

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3. Skill Required

JW was expected to, and did demonstrate, the skill necessary to handle this Bankruptcy Case. That skill, however, was not so extraordinary as to warrant a boost in JW's fees. The attorneys and paralegals who provided specialized skills to the estate are being paid for their legal exper- tise. This factor is fully considered in the lodestar amount. No adjustment is necessary.

4. Preclusion of Other Employment

This factor "involves the dual consideration of otherwise available business which is fore- closed because of conflicts of interest which occur from the representation, and the fact that once the employment is undertaken the attorney is not free to use the time spent on the client's behalf for other purposes." Johnson, 488 F.2d at 718. In the year immediately after the Trustee's ap- pointment and during periods of key litigation, JW's bankruptcy team devoted significant time to this Bankruptcy Case. The Trustee, Barber, and Dr. Edwards testified, however, that by late 2014 (when most of the loans had been boarded with ClearSpring), the estate had stabilized. (STP-279 at 6-7). For the initial months of 2014, the period covered by the JW First Fee Application, EFP/EFT have agreed to and the Court has allowed compensation to JW for the work needed to reach that objective. (Dkt. #3524 at 85; Dkt. #3526 at 102-03; Dkt. #3532 at 22, 27). There was no evidence that JW's representation of the Trustee precluded it from accepting other work. (Dkt. #3528 at 29-31). The Court finds that JW's representation of the Trustee was not so burdensome as to preclude it from accepting new clients during this Bankruptcy Case, es- pecially given the larger number of attorneys in the firm. No adjustment is necessary.

5. Customary Fee

JW presented no evidence at Trial as to whether its fees compare favorably to the rates

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charged by attorneys with similar expertise in comparable matters in non-bankruptcy cases. No adjustment is necessary.

6. Whether the Fee Was Fixed or Contingent

The amount JW seeks is fixed by a range of hourly billing rates. JW does not request a con- tingency fee in this Bankruptcy Case. JW nonetheless contends that its fees had an element of contingency because payment depended on the availability of estate assets and because a few of their initial interim fee applications were not heard and approved immediately.²¹⁶ JW points out that there was almost no cash in the estate in early 2014 when the Trustee was appointed and there was a significant risk of non-payment due to Dickson's theft of over $9 mil- lion in estate funds. (STP-132 at 50). The Trustee testified, however, that within six months of her appointment, she and JW knew there were assets in the Bankruptcy Case. (Dkt. #3526 at

126). In fact, ClearSpring's loan collections totaled over $2 million before the end of 2014. (Dkt. #3526 at 129; Dkt. #3528 at 23-24).

Also, JW did not have to wait until the end of the Bankruptcy Case to be paid: the firm was paid $5,500,697 in interim compensation during the pendency of the Bankruptcy Case. (STP-

132). JW complains that there were exceptional delays in the payment of interim compensation unjustifiably caused by EFP/EFT's objections to its fees. See Perdue, 559 U.S. at 544. The Trus- tee testified, "I was going into my third year of operating the case under very difficult circum- stances, with no compensation. . . [T]he bottom line is that the case was at a stalemate. It wasn't

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moving on the docket and we weren't getting paid . . . even though I had money in the bank."²¹⁷ (Dkt. #3528 at 91, 93). According to the Trustee, this delay in payment forced JW to subsidize CHFS's operations for about one-third of her tenure. (STP-30 at 36). The record says otherwise as demonstrated in the table below:

HISTORY OF ESTATE'S PAYMENT OF FEES & EXPENSES TO JW

01/01/2014 JW's Employment Nunc Pro Tunc 07/01/2014 Trustee's Recovery of $5,898,278.89

JW FIRST, SECOND, AMENDED SECOND & THIRD FEE APPLICATIONS

Date Filed or Heard Fee Application Date Awarded Time Pending 08/15/2014 JW First Fee App Filed

First Interim Fee Order awarded 70% fees & 100% 49 days from 10/10/2014 expenses totaling $572,006.92 on Filing date

JW First Fee App

12/18/2014 Hearing on JW First Fee App on remaining fees 04/07/2015 Trustee's Motion to Withdraw the Reference of the Entire Bankruptcy Case Filed 06/29/2015 District Court's Order Denying Motion to Withdraw the Reference of the Entire Bankruptcy Case 08/26/2015 JW Second Fee App Filed

Second Interim Fee Order awarded 10 months from Hearing 10/27/2015 additional fees of $164,966.45 on date 218

JW First Fee App

12/18/2015 JW Am. Second Fee App Filed 01/21/2016 Hearing on JW Am. Second Fee App

07/18/2016 JW Third Fee App Filed 08/19/2016 Trustee's Motion to Transfer Fee Disputes to Another Bankruptcy Judge Filed 09/09/2016 Order Denying Trustee's Motion to Transfer Fee Disputes to Another Bankruptcy Judge

09/22/2016 Hearing on JW Third Fee App

JW awarded $331,680.50 on 11 months from

JW Am. Second Fee App Hearing date²¹⁹ 12/16/2016 First Bankruptcy Judge's Immediate Payment Order JW awarded $296,356.50 on 3 months from

JW Third Fee App Hearing date JW awarded additional $28,704.00 on

JW First Fee App

Second Bankruptcy Judge's 05/01/2017 Cumulative Interim Fee Order JW awarded additional $564,292.56 on Readjudicating JW Am. Second Fee App

All Prior Interim Fee Orders JW awarded additional $262,146.18 on

JW Third Fee App JW FOURTH THROUGH TWENTY-FIRST FEE APPLICATIONS

Date Filed Fee Application Date Awarded Time Pending 6/30/2017 JW Fourth Fee App 07/26/2017 < 1 month 08/29/2017 JW Fifth Fee App 09/22/2017 < 1 month

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11/17/2017 JW Sixth Fee App 12/13/2017 < 1 month 03/28/2018 JW Seventh Fee App 04/20/2018 < 1 month 07/31/2018 JW Eighth Fee App 08/22/2018 < 1 month 11/09/2018 JW Ninth Fee App 12/03/2018 < 1 month 03/27/2019 JW Tenth Fee App 04/24/2019 < 1 month 08/16/2019 JW Eleventh Fee App 09/10/2019 < 1 month 12/03/2019 JW Twelfth Fee App 12/27/2019 < 1 month 04/09/2020 JW Thirteenth Fee App 05/01/2020 < 1 month 09/17/2020 JW Fourteenth Fee App 10/09/2020 < 1 month 12/03/2020 JW Fifteenth Fee App 12/29/2020 < 1 month 05/24/2021 JW Sixteenth Fee App 06/28/2021 1 month & 4 days 09/10/2021 JW Seventeenth Fee App 09/10/2021 < 1 month

09/27/2022 JW Twentieth Fee App 09/27/2022 6 months & 4 days

01/30/2023 JW Twenty-First Fee App 01/30/2023 2 months & 1 day

The record, therefore, does not support the Trustee's complaint that JW remained unpaid for three years. Only two months passed between the JW First Fee Application and the First Interim Fee Order awarding JW $572,006.92; and for services performed after June 30, 2017, JW almost always received payment within one month of filing its interim fee application. JW and the Trustee fail to acknowledge that interim fee awards are discretionary, and, there- fore, JW was not entitled to payment of any fees or expenses before the end of the Bankruptcy Case. 11 U.S.C. § 331; (Dkt. #3527 at 287). The first bankruptcy judge could have required JW to wait until the end of the Bankruptcy Case before receiving any compensation or could have denied JW's request for a hearing on the remaining 30% of its fees in the JW First Fee Applica- tion. See Mach. Rental, Inc. v. Herpel (In re Multiponics, Inc.), 551 F.2d 1049, 1050 (5th Cir. 1977) (noting that interim fee awards usually fall below the amount requested to mitigate the risk of an overpayment of fees). Yet JW pushed for a hearing on the remaining 30% of its fees, and the first bankruptcy judge considered and awarded JW a second payment of $162,122.63, repre- senting 100% of JW's fees. To argue that this second payment awarded in October 2015 was un- duly delayed ignores the purpose of interim compensation and the discretion given to bankruptcy

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courts to hold back a percentage of the amount billed. The Court understands that there was a significant outlay of efforts for which JW wanted to get paid, but the firm accepted the Bank- ruptcy Case knowing exactly how interim compensation worked. Moreover, to the extent there was any undue delay in receiving payments, it was caused in part by the Trustee's motions to withdraw the entire Bankruptcy Case and motion to transfer, which led the first bankruptcy judge to stay the fee disputes. Based on these facts, no adjustment is necessary or appropriate to com- pensate JW for purported delays in payment.

7. Time Limitations

JW argues that it was operating under significant time constraints when the Trustee was first appointed. (STP-132 at 50-51). The firm contends that the Trustee recovered funds that might have been otherwise lost because of its quick actions. Securing and/or marshaling assets has a time sensitive component in every bankruptcy case. JW's efforts are billed in the JW First Fee Application, to which EFP/EFT have withdrawn their objection. (Dkt. #3524 at 15). Time limitations are part of all bankruptcy representation. The Court finds that the time limi- tations surrounding this Bankruptcy Case after the period covered by the JW First Fee Applica- tion were not unusual. No adjustment is necessary.

8. Amount Involved & Results Obtained

JW argues that the Trustee and the firm achieved outstanding results that justify a rate resto- ration. Specifically, JW asserts that it "played a significant role in Dickson's apprehension by federal authorities" and that the Trustee recovered $6,693,838.38 only seven months after her appointment and about $21 million in loan collections before the end of the Bankruptcy Case.²²⁰

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(STP-132 at 65; Dkt. #3528 at 234-35). EFP/EFT do not dispute the Trustee's initial efforts and success and, for that reason, do not object to the fees requested in the JW First Fee Application for the period from January 2014 to July 2014. They do, however, dispute the extent of the Trustee's and JW's role in achieving that success.

EFP/EFT introduced into evidence a packet of documents that Dr. Edwards sent to the FBI on February 6, 2014 that included a memorandum he prepared outlining Dickson's criminal con- duct, copies of bank records showing wire transfers, and a flowchart detailing deposits and with- drawals in foreign bank accounts controlled by Dickson. (Dkt. #3526 at 117; Dkt. #3532 at 17- 19; EE-7 to -9). They also presented an email dated August 20, 2016 to JW from Luke Dove ("Dove"), Dickson's criminal defense counsel, who disputed JW's statements made in the crimi- nal proceedings regarding the Trustee's role in recovering $6,693,838.38:

tions of $43,767,716.83 but that amount includes both cash and non-cash property and is based on the Trustee's val- uation of the estate's non-cash assets. (Dkt. #3528 at 234-35). ClearSpring, the loan servicer, collected most of the cash and was paid $6,403,734.02 for its services. (EE-1).

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(EE-5; see STP-211 at 4).²²¹JW dismisses as revisionist history Dove's contention that "it was Dickson, while in jail, and through the efforts of his lawyers, who recovered the 6 million with minimal aid from the trustee." (Dkt. #3524 at 214-15). The evidence, however, persuades the Court that Dickson's cooperation was indeed integral to the recovery of $5,898,278.89. The Trustee's and JW's attempt to claim sole credit for the recovery of these funds is overstated.

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The evidence also shows that the Trustee and JW did not recover $30 million solely through their own efforts. ClearSpring, as the loan servicer, collected $21,502,493 from consumer bor- rowers over nine years and was paid $6,403,734 by the estate to do so. In any event, the Court questions whether the outcome achieved by the Trustee and JW reached the level of extraordinary success required to lift this Bankruptcy Case into the realm of a "rare and exceptional" case warranting an upward adjustment. In that regard, EFP/EFT argue that their claims will remain unpaid but the Trustee's professionals²²²will be paid in full and will receive a disproportionate share of estate cash. The percentage of total cash disbursements paid to estate professionals (54%) is higher than to creditors (46%) as of March 18, 2024. (STP-281; Dkt. #3525 at 129; T-20, -8). Initially, the Trustee maintained that EFP/EFT has received a cash distribution of $13,580,104.27 under the Joint Plan, but she later acknowledged at Trial that this cash distribution should not have included $1,869,526 in loan collections from Portfolio #7 be- cause it was never property of the estate. (Dkt. #3530 at 135). Subtracting these Portfolio #7 cash collections, the Trustee distributed only $11,710,578.27 in estate cash to EFP/EFT but has paid estate professionals $13,824,201.29 as of March 18, 2024. (T-8; Dkt. #3530 at 140; STP-20). These numbers are shown in the table below:

COMPENSATION PAID TRUSTEE'S PROFESSIONALS AS OF MARCH 18, 2024²²³ JW $5,835,282.32 23%

Trustee $547,792.64 2%

Stephen Smith & Company, PC & HRK (accountant) $175,432.53 1% Facio & Cañas (special counsel) $28,765.79 < 1% John D. Moore (special counsel) $265,101.72 1% ARIFA (special counsel) $24,334.93 < 1%

Horne LLP²²⁴(forensic accountant) $447,592.01 2%

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Jeffrey Kirk (expert witness) $78,702.13 < 1% ClearSpring (loan servicer) $6,403,734.02 25% Mitchell, McNutt & Sams, P.A. (mediator) $17,463.20 < 1%

COMPENSATION PAID TO TRUSTEE'S PROFESSIONALS $13,824,201.29 54% TRUSTEE'S CASH DISBURSEMENTS TO CREDITORS

Cash Payments to EFP/EFT

$989,970.06 EFP/EFT $3,000,000.00 $9,496,643.76 $93,490.45

(Portfolio #7) ($1,869,526)

CASH DISBURSEMENTS TO EFP/EFT $11,710,578.27

Cash Payment to Non-EFP/EFT Creditor (IRS)

IRS $3,350.41

CASH DISBURSEMENTS TO EFP/EFT & IRS²²⁵$11,713,928.68 46% TOTAL COMPENSATION PAID TO TRUSTEE'S PROFESSIONALS & TOTAL CASH DISBURSE- MENTS TO EFP/EFT & IRS $25,538,129.97 100%

(STP-281; Dkt. #3525 at 129; Dkt. #3530 at 134-41; T-8, -20; Dkt. #3388-3 at 10). As of March 18, 2024, the Trustee's professionals have received about $2 million more than creditors of the estate.²²⁶

EFP/EFT have not objected to the payment of fees in the JW First Fee Application. JW and the Trustee have been paid for their exceptional initial efforts in stabilizing the estate, which in- cluded hiring the loan servicer—but doing so was their job. Did the Trustee and JW work hard to achieve good results? Absolutely. Were they assisted by others? Yes. Has JW been paid for its efforts? Yes. This factor does not support an upward adjustment.

9. Experience of the Attorney

JW contends that its attorneys are highly regarded as experts in the areas for which services ($495,592.01−$48,000=$447,592.01).

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were rendered. It asserts that the firm is among the 135 largest firms in the United States accord- ing to Chambers USA 2023 and has extensive experience in handling bankruptcy and insolvency matters. It maintains that some of its attorneys are board certified by the American Board of Cer- tification in business bankruptcy and creditors' rights. It also contends that the firm was ranked in Band 1 in Chambers USA in the areas of bankruptcy and restructuring for Louisiana and Mis- sissippi in 2023 and has three Fellows in the American College of Bankruptcy. There was no dispute at Trial that JW and the Trustee are experienced bankruptcy counsel. Their applied-for rates reflect that experience. This factor does not support an upward adjustment.

10. Undesirability of the Case

The Trustee believes that it would have been difficult for any local Mississippi firm except JW to undertake her representation. (Dkt. #3527 at 131). On this point, both Barber and Geno agreed with the Trustee. They both testified at Trial that only a few law Mississippi firms could have handled the work required to stabilize the estate or shouldered the financial burden of fund- ing the operations of the business in the immediate aftermath of Dickson's fraud. (Dkt. #3524 at 23; Dkt. #3527 at 211). Maddux testified at Trial that his law firm, Butler Snow, was approached by the UST about representing CHFS, but declined to do so because of: (1) the risk of nonpay- ment; (2) the complexity of the case; (3) the carrying costs; and (4) the lost opportunity costs. (Dkt. #3530 at 43-44). He also testified that he did not believe that any Mississippi firm other than JW and his own firm, Butler Snow, could have handled this Bankruptcy Case from "soup to nuts." (Dkt. #3530 at 85). As discussed herein, the risk of non-payment was negated six months in; and the challenges of this Bankruptcy Case were faced and met by JW's specialized counsel who were compensated at higher rates to account for their expertise. The Trustee testified that

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she was aware that the Bankruptcy Case was contentious before her appointment. (Dkt. #3526 at

136). If JW really viewed the Bankruptcy Case as undesirable, that undesirability should have been reflected in its applied-for rates—not a decade later. This factor does not weigh in favor of an adjustment.

11. Length of Professional Relationship with the Client

JW had no relationship with CHFS or any of its creditors before it was retained to represent the Trustee except what it disclosed in its employment application. No adjustment is necessary.

12. Awards in Similar Cases

The award reflected in the lodestar is commensurate with the amount awarded in similar chapter 11 cases.

In addressing all of the Johnson factors, the Court finds no reason to depart from the lodestar. Many of the Johnson factors are subsumed into the Court's lodestar calculation. To the extent that JW billed hours that were non-compensable, excessive, or duplicative, the Court has fully addressed those matters in the lodestar calculation. No adjustment is necessary.

D. JW's Expenses

JW requests final approval of $334,585.32 in expenses already paid by the estate; $6,540.26 in unpaid expenses incurred from April 1, 2023 through June 27, 2023; and $10,564.43 in esti- mated expenses to be incurred from June 28, 2023 through the closing of the Bankruptcy Case. Professionals employed by the estate may be reimbursed for "actual, necessary expenses." 11 U.S.C. § 330(a)(1)(B). Expenses, like fees, must be reasonable and necessary. 11 U.S.C. § 330(a)(3)(A)-(F). EFP/EFT object to the following categories of expenses: (1) CALR; (2) court records/PACER; (3) copies; (4) delivery charges; (5) overtime pay; (6) meals; and (7) estimated

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expenses.

1. CALR Charges

In the JW Final Fee Application, JW agreed to waive one-half of its CALR charges in the JW First Fee Application and all CALR charges ($29,952.81) for the period covered by the JW Amended Second Fee Application. (Dkt. #1148-2 at 237-38, 247-49). The firm asks for final ap- proval of $4,756.16 (one-half of its CALR charges) in the JW First Fee Application²²⁷and $17,662.95 in the JW Fifth through Final Fee Applications for total requested charges of $22,419.11 as shown in the table below:

JW First Fee JW Fourteenth Fee

Application $4,756.16 Application $227.00

JW Fifth Fee JW Fifteenth Fee

Application $7,398.47 Application $1,072.00

JW Sixth Fee JW Sixteenth Fee

Application $3,715.68 Application $574.05

JW Seventh Fee JW Seventeenth Fee

Application $515.28 Application $60.45

JW Eighth Fee JW Eighteenth Fee

Application $388.67 Application $282.00

JW Ninth Fee JW Nineteenth Fee

Application $353.10 Application $7.00

JW Tenth Fee JW Twentieth Fee

Application $209.00 Application $7.00

JW Eleventh Fee JW Twenty-First Fee

Application $175.00 Application $676.75

JW Twelfth Fee JW Twenty-Second Fee

Application $314.00 Application $1,335.50

JW Thirteenth Fee JW Final Fee Application

Application $257.00 (Unpaid Fees) $95.00

TOTAL $22,419.11

CALR, such as WESTLAW or Lexis, has two expense components, a fixed subscription fee and a time or transaction fee for accessing its databases to perform legal research. The general subscription to such a service is a clear example of an overhead expense. See Trevino v. U.S. Bank Trust, N.A. (In re Trevino), 648 B.R. 847, 901-02 (Bankr. S.D. Tex. 2023). Courts are di- vided, however, as to whether CALR time charges are eligible for reimbursement. Some courts

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disallow any CALR fees as overhead. See In re Command Servs. Corp., 85 B.R. 230, 234-35 (Bankr. N.D.N.Y. 1988). Other courts allow CALR fees to the extent "the applicant: (1) demon- strates that the use charges incurred were reasonable and necessary (which necessarily includes a description of the research topic and the length of time spent on each topic); (2) affirms that the applicant bills its non-bankruptcy clients for CALR use charges, including the rate at which it bills its non-bankruptcy clients; and (3) certifies the invoiced cost from the vendor." Fibermark, Inc., 349 B.R. at 400; see In re Wizard Enters., Inc., 109 B.R. 708, 710 (Bankr. W.D. La. 1990) (allowing CALR expenses when evidence was submitted establishing reasonableness). In the Second Interim Order entered on October 27, 2015, the first bankruptcy judge found

"Fibermark to be persuasive and adopt[ed] the three-part requirement an applicant must follow."

(STP-159 at 58). Later, in the Cumulative Interim Order entered on May 3, 2017, the second bankruptcy judge ruled that "[t]his Court likewise will apply Fibermark to future fee applica- tions." (STP-91 at 48).

Despite these express pronouncements from both prior bankruptcy judges, JW did not satisfy the requirements of the Fibermark test. At Trial, Barber testified only that JW customarily

"charge[s] clients for computerized legal research." (Dkt. #3524 at 181). His testimony may sat- isfy the second and third elements of the Fibermark test, but not the first. JW failed to "demon- strate[] that the use charges incurred were reasonable and necessary (which necessarily includes a description of the research topic and the length of time spent on each topic)." Fibermark, 349 B.R. at 400. The following excerpt shows the paucity of information provided:

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(Dkt. #1995-2 at 143). For this reason, the Court disallows $22,419.11 in CALR expenses. Clark

v. Centene Corp., Case No. A-12-CA-174, 2015 WL 6962894, at *11 (W.D. Tex. Nov. 10, 2015) (declining to award CALR fees because "[p]laintiffs have provided no description whatsoever of the research charges other than 'Westlaw'"). This reduction is largely the result of JW's own failure to heed the instructions of the two prior bankruptcy judges to comply with the Fibermark requirements. The Court sustains EFP/EFT's objection.

2. Court Record Fees/PACER

The federal judiciary's PACER service provides the public with online access to the electron- ic records of federal court cases. Nat'l Veterans Legal Servs. Program v. United States, 291 F. Supp. 3d 123, 126 (D.D.C. 2018). PACER users are charged fees to recoup the operating costs. JW charged expenses for "Court Record Fees/PACER." In EFP/EFT's Objection to JW's Fees, EFP/EFT allege that JW failed to meet its burden of proving that these PACER fees are the "ex- act amount the firm was charged" or that the charges were incurred for specific research directly related to this Bankruptcy Case. (STP-279 at 41).

At Trial, Barber testified that the PACER fees are the actual charges. "There's no profit cen- ter built into that." (Dkt. #3524 at 180). He also testified that a "large part of the PACER search- es were these consumer mortgage bankruptcy cases across the country." (Dkt. #3524 at 180). His testimony shows that the fees were both reasonable and necessary. The Court overrules EFP/EFT's objection and allows the reimbursement of these PACER charges.

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3. Copies

EFP/EFT complain that JW's interim fee applications include copy charges for which JW seeks reimbursement but fail to show the number of pages copied or the charge per page. They object to any profit built into the copy charges.

Barber testified at Trial that the firm charged 20¢ per page for black and white copies and a slightly higher amount for color copies although he could not recall the precise charge. (Dkt. #3524 at 187-88). In comparison, the Bankruptcy Clerk's Office charges 50¢ per page for copies and 10¢ per page for electronic copies printed from a public access terminal. See www.mssb.usourts.gov/filing-fees (Rev. Dec. 1, 2023); In re Muldowney, Case No. 07-00680S, 2008 WL 513158 (Bankr. N.D. Iowa Feb. 22, 2008). This 50¢ charge presumably includes an administrative component for the retrieval of documents.

JW's copying charges totaling $68,503.50 cover the cost of materials and allocates the pur- chase or rental cost and maintenance of a printer over approximately eight years. The Court finds that JW's charges are reasonable and should be allowed. EFP/EFT's objection is overruled.

4. Delivery Charges

EFP/EFT object to the reimbursement of two delivery charges of $22.40 each on April 5 and 12, 2021 that appear in the JW Seventeenth Fee Application. (STP-126 at 74). Barber testified that the deliveries were by courier from JW's office to the Trustee's house during the COVID pandemic. He explained that only a skeleton crew remained in JW's offices during the pandemic while most attorneys, including the Trustee, worked from home. (Dkt. #3524 at 66). Barber did not disclose the nature of the documents or explain why they had to be delivered to the Trustee by messenger service rather than by email or some other form of electronic delivery. See In re

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Bank of New England Corp., 134 B.R. 450 (Bankr. D. Mass. 1991) ("Not everything absolutely, positively has to get there overnight, or quicker."). Without additional evidence as to why these documents had to be hand-delivered, the Court disallows these expenses totaling $44.80 in the JW Seventeenth Fee Application. The Court sustains EFP/EFT's objection.

5. Overtime Pay

EFP/EFT object to payment of any overtime. (STP-279 at 70). In the JW First Fee Applica- tion, JW charged overtime pay of $3,992.75, which the prior bankruptcy judges previously disal- lowed on an interim basis. JW does not seek reimbursement of that expense in the JW Final Fee Application, but does ask for payment of a different overtime charge of $81.98 billed by a para- legal that appears in the JW Seventeenth Fee Application. (STP-126 at 74). In general, overtime is overhead, and overhead is not an expense that arises from the repre- sentation of a particular client. See In re Jensen-Farley Pictures, Inc., 47 B.R. 557, 584 (Bankr. D. Utah 1985). Barber testified that JW does not typically charge its clients for staff overtime

"but for some unique circumstance," which he could not recall. (Dkt. #3524 at 66). Barber, who was responsible for preparing JW's fee applications, was unable to provide the paralegal's rate of overtime pay. (Dkt. #3524 at 67). The Court disallows this $81.98 charge for overtime pay in the JW Seventeenth Fee Application.

6. Meals

In the JW Nineteenth Fee Application, JW seeks reimbursement of $32.32 for the cost of a meal at the Mayflower Restaurant in Jackson, Mississippi. (STP-128-1 at 55-56, 65). EFP/EFT object to this expense. At Trial, Barber testified that this charge was a mistake. (Dkt. #3524 at 69-70). The Court disallows this expense of $32.32 and sustains EFP/EFT's objection.

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7. Estimated Expenses

Professionals employed by the estate may be reimbursed for "actual, necessary expenses."

11 U.S.C. § 330(a)(1)(B). Expenses, like fees, must be reasonable and necessary. 11 U.S.C. § 330(a)(3)(A)-(F); see Evangeline, 890 F.2d at 1326 (holding that a fee application must "be sufficiently detailed and accurate" so that "a court can make an independent evaluation as to what level of fees are actual, necessary and reasonable") (citation omitted). In the JW Final Fee Application, JW requests reimbursement of estimated expenses totaling $10,564.43²²⁸for the period from June 23, 2023 through the closing of the Bankruptcy Case. JW never supplemented the JW Final Fee Application to document these expenses. That the expens- es were estimated means they were not actually incurred within the meaning of § 330(a)(1)(B). Moreover, EFP/EFT were denied the opportunity to meaningfully review the invoices because they were not timely produced. JW has failed to meet its burden of proving that these expenses are "actual, necessary expenses." For the same reason the Court disallows JW's request for esti- mated fees of $119,338.50, the Court disallows its request for estimated expenses. Not including estimated expenses, the total amount of expenses for which JW seeks reimbursement from the period from January 2, 2014 through June 23, 2023 is $341,125.58. (STP-132 at 2).

E. Summary of Court's Ruling on JW's Compensation (Fees & Expenses)

The Court finds that pursuant to § 330(a), JW is entitled to the fees and expenses reflected in the "Summaries of JW's Fees & Expenses" attached to the end of this Order. The total fee award of $5,226,639.60 is less than $5,500,697, the amount that the Court allowed on an interim basis.

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The difference totals $274,057.40. Also, the total allowed expenses of $318,547.37²²⁹are less than $334,585.32, the amount of interim expenses already paid JW. The fees and expenses paid JW in excess total $290,095.35.²³⁰JW must disgorge this amount.

F. Trustee's Compensation

The Court now turns to the Trustee's compensation. Her request is unusual because it has two components: (1) a commission based on cash disbursements to the maximum extent allowed under § 326 and (2) a percentage of in-kind (noncash) distributions as agreed to in the Joint Plan. The Court begins by calculating the Trustee's compensation under § 326(a). The Trustee does not seek reimbursement of any expenses.²³¹

1. Statutory Commission under § 326

The Trustee seeks approval of compensation of $928,338.30 based on her calculation of the maximum amount allowed under § 326(a). EFP/BHT disagree with the Trustee's calculation of the § 326 cap and the reasonableness of her fees notwithstanding the cap. They ask this Court to give greater scrutiny to the Trustee's request for compensation because of her dual role as the chapter 11 trustee and her own legal counsel. They point out that in addition to trustee compen- sation under § 326, she seeks $1,024,861 for services she billed as counsel for the estate in JW's fee applications,²³²amounting to $1,953,199.30 in total proposed compensation. (STP-132 at 2,

58).

In determining the amount of reasonable compensation to award the Trustee, the Court must

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"treat such compensation as a commission, based on section 326." See 11 U.S.C. § 330(a)(7). Section 326, in turn, calculates the commission based on distributions, as follows:

In a case under chapter 7 or 11, . . . the court may allow reasonable compensation under section 330 of this title of the trustee for the trustee's services, payable after the trustee renders such services, not to exceed 25 percent on the first $5,000 or less, 10 percent on any amount in excess of $5,000 but not in excess of $50,000, 5 percent on any amount in excess of $50,000 but not in excess of $1,000,000, and reasonable compensation not to exceed 3 percent of such moneys in excess of $100,000,00, upon all moneys disbursed or turned over in the case by the trustee to parties in interest, excluding the debtor, but in- cluding holders of secured claims.

11 U.S.C. § 326(a). The Trustee's $928,338.30 calculation is based on $30,169,610.13 in cash disbursements made or expected to be made from January 16, 2014 to the end of the Bankruptcy Case, as shown in the table below: 233

Trustee's Calculation of § 326 Statutory Cap As Adjusted at Trial Cash Trustee

Disbursements Compensation

First $5,000 at 25% $30,169,610.13 ($5,000) $1,250.00

Balance $30,164,610.13

Next $45,000 at 10% $30,164,610.13 ($45,000) $4,500.00

Balance $30,119,610.13

Next $950,000 at 5% $30,119,610.13 ($950,000) $47,500.00

Balance $30,072,110.13

Remaining Balance at 3% $29,169,610.13 $875,088.30 TOTAL $928,338.30

EFP/EFT argue, and the Court agrees, that the Trustee's base calculation of $30,169,610.13 is too high for two reasons:

First, the base calculation should have excluded $1,869,526 in net loan collections from Port-

233 The Trustee's Final Fee Application calculates the Trustee's compensation under § 326 to be $584,030.52 as of August 14, 2023 based on cash disbursements totaling $18,692,684.21. (STP-30 at 41). After August 14, 2023, the Trustee disbursed an additional $11,476,925.92 in cash from the estate's Wells Fargo bank account. This amount ($11,476,925.92) plus the cash disbursements made before August 14, 2023 ($18,692,684.21) total $30,169,610.13. (STP-30).

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folio #7. (Dkt. #3531 at 137). These loan collections, as adjudicated in the Global Opinion and later affirmed on appeal, are not property of the estate. Courts have held that the commission base may not include "property (or monies attributable to such property) returned to a third party after a determination (whether by agreement of the parties or by a court order) . . . that the prop- erty is not property of the estate." In re N. Am. Oil & Gas Inc., 130 B.R. 473, 478 (Bankr. W.D. Tex. 1990). The key question in determining whether non-estate property should be included in the statutory base is "whether the property has been justifiably administered during the bankrupt- cy and whether the trustee has properly performed services in relation to that property." Hed v. Murphy (In re Invent Res., Inc.), 518 B.R. 169, 176 (D. Mass. 2014). The Court finds that the loan collections from Portfolio #7 were not "justifiably administered" and should be excluded from the statutory base.²³⁴In re Market Res. Dev. Corp., 320 B.R. 841, 849 (Bankr. E.D. Va. 2004) ("The trustee is no more entitled to include the funds as part of the base for purposes of calculation than if he had found the money on the street, picked it up and returned it to its own- er."). Accordingly, the Court finds that EFP/EFT's objection is due to be sustained and that the base calculation should be reduced by $1,869,526.

Second, the base calculation should have excluded all interim compensation already paid the Trustee. During the pendency of this Bankruptcy Case, she paid herself $547,792.64 and now seeks a commission on that commission. When asked at Trial to explain why, the Trustee an- swered, "I don't know the answer to that question. I think so. I mean the reason that I say—I hes- itate is because [the estate's accountant] calculates all of that." (Dkt. #3531 at 98). The Trustee did not point to any legal authority that would support payment of "comp on comp" or "double

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dipping." Clearly allowing the Trustee to include disbursements to herself in her calculation would award her more compensation than what she would otherwise receive at the end of the Bankruptcy Case when "the statute is clearly written to calculate a trustee's fee in the first in- stance." In re Zukowsky, No. 4:06-bk-00557, 2007 WL 1959151, at *2 (Bankr. Ariz. June 28, 2007) (holding that a trustee cannot calculate his fee on the percentages, add his fee to the amount to be distributed to "parties in interest," and then calculate his fee a second time by in- cluding himself again). The Court finds that this part of EFP/EFT's objection is due to be sus- tained and that the base calculation should be reduced by $547,792.64 to account for the interim disbursements to the Trustee.

With these two deductions ($1,869,526 and $547,792.64), the Court finds that the correct statutory base is $27,752,291.49 and the statutory cap is $855,818.74, as shown below:

Court's Calculation of § 326 Statutory Cap Cash Trustee

Disbursements Compensation

First $5,000 at 25% $27,752,291.49 ($5,000) $1,250.00

Balance $27,747,291.49

Next $45,000 at 10% $27,741,291.49 ($45,000) $4,500.00

Balance $27,702,291.49

Next $950,000 at 5% $27,702,291.49 ($950,000) $47,500.00

Balance $26,752,291.49

Remaining Balance at 3% $26,752,291.49 $802,568.74 TOTAL $855,818.74

2. Fair Compensation under § 330(a)(3)

The Trustee is not entitled to the maximum commission under § 326 per se. In re England,

153 F.3d 232, 235 (5th Cir. 1998). Although § 330(a)(7) treats a trustee's compensation as a per- centage-based commission, § 330(a)(1) explicitly limits the fees of a chapter 11 trustee to "rea-

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sonable compensation for actual, necessary services rendered . . . and reimbursement for actual, necessary expenses." 11 U.S.C. § 330(a)(1)(A). That framework also governs compensation for attorneys. As a result of the overlap between § 330(a)(1) and § 330(a)(7), a chapter 11 trustee is entitled to "reasonable compensation" determined in the same way that reasonable compensation is calculated for all other estate professionals—except that it is subject to § 326(a)'s statutory cap. Golden Park Estates, 2015 WL 5785756, at *4; see In re 1031 Tax Grp., LLC, No. 07- 11448, 2009 WL 4806199, at *1 (Bankr. S.D.N.Y. Dec. 9, 2009) ("While Bankruptcy Code § 326(a) sets a maximum limit on the compensation that may be awarded to a trustee, § 330 still operates to limit the compensation of trustees to a reasonable amount."). Accordingly, after hav- ing determined the ceiling of $855,818.74 under § 326(a), the Court must next determine wheth- er a rational relationship exists between that amount and the level of services that the Trustee provided the estate. That inquiry requires the Court to calculate the lodestar as adjusted by the factors set forth in § 330(a) and Johnson. The rules for calculating the lodestar have already been discussed. In brief, the Court must consider the reasonableness of the time the Trustee spent providing services and her hourly billing rate.

The Trustee's Final Fee Application shows that the Trustee expended 5,647.90 hours per- forming her statutory duties from January 16, 2014 through August 13, 2023. (STP-30 at 23). The Trustee estimated another 100 hours of her time would be required "to close the CHFS Case and conclude her remaining duties for the Estate." (STP-30 at 23). At Trial, she produced for the first time invoices for work performed from August 14, 2023 to February 27, 2024 showing that she expended 105.3 additional hours for total expended hours of 5,753.20. (STP-31). In each in- terim fee application, the Trustee discussed her activities for the period covered "that would re-

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late to the Johnson factors" and referenced her report when a fee application overlapped in time. (Dkt. #3526 at 137).

Each application provides the Trustee's hourly rate for the period covered. That rate was $340 in 2014 and gradually increased to $560 in 2023. The Trustee's lodestar (without any re- ductions or disallowances) for the period from January 16, 2014 through February 27, 2024 is $2,283,421.50 as shown in Exhibits STP-8 to -30 and in the following table:

Trustee's Fee Application Time Period Requested

Lodestar Amount

First 01/16/2014 - 06/30/2015 $601,515.00 Am. Second 07/01/2015 - 02/29/2016 $271,455.00 Third 03/01/2016 - 05/31/2017 $333,098.00 Fourth 06/01/2017 - 09/30/2017 $105,182.00 Fifth 10/01/2017 - 01/31/2018 $104,007.50 Sixth 02/01/2018 - 05/31/2018 $64,960.00 Seventh 06/01/2018 - 09/30/2018 $51,400.00 Eighth 10/01/2018 - 01/31/2019 $39,992.50 Ninth 02/01/2019 - 05/31/2019 $19,295.00 Tenth 06/01/2019 - 09/30/2019 $40,205.00 Eleventh 10/01/2019 - 01/31/2020 $46,692.50 Twelfth 02/01/2020 - 05/31/2020 $50,355.00 Thirteenth 06/01/2020 - 09/30/2020 $27,405.00 Fourteenth 10/01/2020 - 01/31/2021 $40,285.00 Fifteenth 02/01/2021 - 05/31/2021 $40,650.00 Sixteenth 06/01/2021 - 09/30/2021 $93,600.00 Seventeenth 10/01/2021 - 01/31/2022 $28,260.00 Eighteenth 02/01/2022 - 05/31/2022 $18,815.00 Nineteenth 06/01/2022 - 09/30/2022 $81,037.00 Twentieth 10/01/2022 - 01/31/2023 $53,443.00 Twenty-First 02/01/2023 - 06/15/2023 $74,760.00 Final 06/16/2023 - 08/13/2023 $37,968.00 Estimated 08/14/2023 - 02/27/2024 $59,041.00

TOTAL $2,283,421.50 a. Trustee's Hourly Rate

According to her invoices, the Trustee billed the estate from January 16, 2014 to February 27, 2024 an hourly rate ranging from $340 to $560 per hour. EFP/EFT contend that most sea- soned bankruptcy practitioners in Mississippi charge no more than $450 per hour. They ask the Court to adjust downward all time entries exceeding $450, beginning with the Trustee's Four- teenth Fee Application when the Trustee first increased her rate from $450 to $500.

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For the same reasons the Court allows JW's applied-for rates, the Court overrules EFP/EFT's objection to the Trustee's rates over $450 per hour. The Court, however, reduces her hourly rates to match the rates she charged as counsel for the estate.²³⁵Although the Trustee testified that her hourly billing rates tracked the rate she charged in her role as counsel for the estate, the invoices show that she began billing the estate a higher rate in 2021. (Dkt. #3529 at 18). In JW's fee ap- plications, JW billed the legal services provided by the Trustee from 2020 to 2023 at an hourly rate of $450 except for a brief period of time in 2021 when it temporarily increased her hourly rate to $500. (STP-125, -132). The invoices attached to the Trustee's fee applications, however, show that for her trustee services, she charged the estate $530 per hour beginning in 2022 and raised her rate to $560 in 2023. The total difference in fees attributable to the higher hourly bill- ing rates in the Trustee's Sixteenth through Final Fee Applications is $46,713 as shown in the table below:

Trustee's Requested Fees Fees at Attorney Reduction Fee Application Billing Rate

Seventeenth $28,260 $27,700 $560 Eighteenth $18,815 $15,975 $2,840 Nineteenth $81,037 $68,805 $12,232 Twentieth $53,443 $44,505 $8,938 Twenty-First $74,760 $60,075 $14,685 Final $37,968 $30,510 $7,458

TOTAL $294,283 $247,570 $46,713 At Trial, the Trustee offered no explanation as to why she charged a billing rate for services pro- vided in her non-legal role as the chapter 11 trustee higher than what JW charged for her legal services to the estate. Notably, a law license is not required to serve as a chapter 11 trustee. The Court reduces the Trustee's hourly rates in the Trustee's Seventeenth through Final Fee Applica- tions by $46,713 to match her hourly billing rates in JW's fee applications.

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b. Trustee's Compensation from March 2015 to the Present

EFP/EFT argue that the compensation the Trustee seeks is unreasonable. They ask the Court to deny all compensation from March 2015 to the present. That time period is covered in part in the Trustee's First Fee Application and in all subsequent fee applications. EFP/EFT's request, if granted, would allow the fees requested in the Trustee's First Fee Application and disallow all other fees. For all the reasons the Court overruled EFP/EFT's Objection to JW's Fees after March 2015, the Court overrules their objection to the Trustee's fees.

c. Trustee's RICO Case Against EFP/BHT, Dr. Edwards & His Adult Children

For all the reasons the Court denied compensation to JW, the Court denies the Trustee com- pensation for work expended on the RICO claim. That reduction totals $3,775 in fees and 10.5 hours.²³⁶

d. Trustee's Motions To Withdraw the Reference of the Entire Bankruptcy Case, Intervene & Consolidate

For all the reasons the Court denied compensation to JW, the Court disallows all fees related to the RICO claim. That reduction totals $700 in fees for two hours of work.²³⁷

e. Penalty Plan

For all the reasons the Court denied compensation to JW, the Court disallows all fees in con- nection with the Penalty Plan. That reduction totals $20,284.50 in fees for 54.4 hours of work.²³⁸

f. Trustee's Compensation for Services Rendered in Pursuit of Litigation Against Dr. Edwards & EFP/BHT

EFP/EFT argue that the Trustee is not entitled to any compensation for her work, over eight

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years, to defeat or subordinate EFP/BHT's claims. They contend that as early as March 1, 2015, the Trustee should have determined that it was not cost effective or beneficial to the estate to start or resume litigation against them—the estate's "super-duper" creditors.²³⁹ According to EFP/EFT, for interim fee applications three through twenty-two,²⁴⁰fees for

"Edwards-pursuit" services amounted to $498,602.50 for 1,192.70 hours. (STP-348 at 10-11). They ask the Court to disallow those fees. For the reasons the Court overruled EFP/EFT's Objec- tion to JW's Fees, the Court overrules EFP/EFT's objection to the Trustee's fees for services rendered in connection with the Edwards Adversary Proceeding.

g. Denial of Trustee's Estimated Fees Pursuant to Bankruptcy Rule 2016

In the Trustee's Final Fee Application, the Trustee estimated that another 100 hours of her time would be required after August 13, 2023 "to close the CHFS Case and conclude her remain- ing duties for the Estate." (STP-30 at 23). No other description of her services is provided for work performed during this period. The Trustee did not supplement or amend the Trustee's Final Fee Application. (Dkt. #3526 at 51-56). At Trial, she produced invoices for work performed from August 14, 2023 through February 27, 2024. (T-31). Those invoices show that the Trustee incurred fees of $59,041 for 105.3 hours of work after August 13, 2024. For all the reasons the Court denied JW compensation for its estimated fees, the Court disallows the Trustee's estimated fees of $59,041 for the period after August 13, 2023. See FED. R. BANKR. P. 2016.

h. Vague Time Entries in Trustee's Fee Applications

EFP/EFT allege that the invoices attached to the Trustee's fee applications are replete with

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vague time entries. (STP-348 at 13). They contend that the Trustee billed the estate 163.50 hours at a total charge of $71,179 over the life of the Bankruptcy Case for work expended following up on or reviewing the status of "pending matters." (STP-348 at 13); In re Southern Diesel Inc., 309 B.R. 810, 817 (M.D. Ala. 2004) (ruling that "the Court should not have to guess as to what coun- sel is referring" and disallowing all time requested for entries deemed too vague to permit any review). They ask the Court to disallow these fees.

Generally, fee applications must stand on their own merit. La. Power & Light Co. v. Kellstrom, 50 F.3d 319, 324-25 (5th Cir. 1995). Because fee applicants bear the burden of proof, they must produce sufficient documentation that will enable a court to determine whether ser- vices are compensable under § 330. Bode v. United States, 919 F.2d 1044, 1047 (5th Cir. 1991). All of the Trustee's fee applications include time entries that vaguely refer to "pending matters"

or "pending issues" with no context or explanation from which the Court can determine the rea- sonableness of the hours expended. See In re Baker, 374 B.R. 489, 494 (Bankr. E.D.N.Y. 2007) ("The records must be detailed enough to enable a Court to determine whether the attorneys are claiming compensation for hours that are 'redundant, excessive, or otherwise unnecessary.'"); In re Bennett Funding Grp, 213 B.R. 234, 244 (Bankr. N.D.N.Y. 1997) ("In cases where the time entry is too vague or insufficient to allow for a fair evaluation of the work done and the reasona- bleness and necessity for such work, the court should disallow compensation for such services.") (citations omitted). Many of these vague time entries are for significant periods of time. For ex- ample, on May 12, 2014, she billed three hours to "review status re pending matters"; on June 6, 2014, four hours for "work on pending matters"; and on February 15, 2016, three hours to "fol- low up on multiple outstanding matters." The Court disallows these time entries for vagueness.

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From the Court's count, they total 453 hours and $167,340 in fees.²⁴¹

i. Defending Fee Applications/Motion to Transfer Fee Disputes

EFP/EFT object to all time entries for litigating fee applications. That work is not compensa- ble under ASARCO, 576 U.S. at 127. They do not identify these entries separately. Some of the Trustee's fees challenged as non-compensable under ASARCO included work reviewing the Mo- tion to Transfer Fee Disputes to a different bankruptcy judge. (STP-11). Under § 331 a court may allow professionals to submit interim fees applications. The statuto- ry language is permissive; a court could defer ruling on fees until final applications are submit- ted. In re Child World, Inc., 185 B.R. 14, 17 (Bankr. S.D.N.Y. 1995) (noting that "nothing in [§ 331] requires a court to grant an application for interim compensation") (citations omitted). The first bankruptcy judge, after issuing seven opinions on interim and final fee applications, suggested at a preliminary hearing on July 28, 2015 that the time and resources of the Court (and the parties) would be better spent resolving the cash collateral issues. (STP-212). The dispute over interim fees had become a distraction from any meaningful progress in the Bankruptcy Case. The Trustee, however, aggressively pursued payment of interim compensation by filing the Motion to Transfer Fee Disputes under the guise of relieving the bankruptcy judge of his "con- gested docket." Other more critical matters, including cash collateral issues, were pending in the Bankruptcy Case at that time, but the Trustee sought to transfer, assumedly for a quick resolu- tion, only the fee disputes.

For all the reasons the Court denied compensation to JW, the Court disallows all fees in- curred by the Trustee in connection with defending fee applications. In addition, the Court disal-

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lows 2.5 hours for work associated with the Motion to Transfer Fee Disputes. By the Court's count, the Trustee's time entries in this category total 112 hours and $45,479 in fees.²⁴²

j. Fees Incurred after March 2023 in Excess of $75,000 Holdback in Joint Plan

EFP/EFT contend that the settlement reached in March 2023, as memorialized in the Joint Plan, carved out $75,000 to pay all estate professionals, including the Trustee, for any work needed to conclude the estate from that date forward. (STP-279 at 15). To the extent the $75,000 holdback provision operated as a cap, the Court finds that it applied only to the fees and expenses incurred by "Estate Professionals" in confirming the Joint Plan.²⁴³The Joint Plan defines "Trus- tee" as "Kristina M. Johnson," does not refer to her as an "Estate Professional," and does not de- fine the term "Estate Professionals." A chapter 11 trustee is not generally regarded as an estate professional. A chapter 11 trustee, for example, is appointed pursuant to § 1104(a) and is paid under § 326, whereas estate professionals are retained pursuant to § 327(a) and paid under § 330. Accordingly, the Court overrules EFP/EFT's objection to the Trustee's fees on these grounds.

k. Lodestar Calculation

Having determined the reasonableness of the Trustee's hourly billing rates and the hours ex- pended, the Court makes its calculation of the lodestar by multiplying the determined hourly rates by the hours expended. The Court has reduced the Trustee's fees by $343,345 and her hours by 737.20, as shown in the table below:

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Description Hours Fees

Hourly Billing Rates n/a $46,713.00 RICO 10.50 $3,775.00

Motions to Withdraw 2.00 $700.00 Penalty Plan 54.40 $20,284.50 Estimated Fees 105.30 $59,041.00 Vague Entries 453.00 $167,340.00 Defending Fee Applications 112.00 $45,479.00

TOTAL 737.20 $343,332.50

With these reductions, the Court calculates the lodestar to be $1,940,089. 244

3. Adjustment to Trustee's Compensation

To the extent applicable under § 326, the Court next considers whether the Trustee's fees should be adjusted by § 330(a)(3) and/or the Johnson factors.

a. Adjustment to Trustee's Compensation under § 330(a)(3).

The Court first considers whether the lodestar should be adjusted based on the factors enu- merated in § 330(a)(3). Some of these factors have already been discussed at length in the Court's analysis of the lodestar.

1. Time Spent

From January 16, 2014 through February 27, 2024, the Trustee logged 5,753.20 hours in this Bankruptcy Case. (STP-30 at 23). In its lodestar analysis, the Court has reduced the time ex- pended by 737.20 hours. With these reduction in hours, the Trustee expended 5,016 hours ad- ministering the Bankruptcy Case. No further adjustment is necessary.

2. Rates Charged

For the reasons already discussed, the Court finds that the Trustee's rates, to the extent they matched the rates charged for her legal services in JW's fee applications, were reasonable and within the prevailing market rate for this district. For comparison, the Trustee's maximum fees 244 ($2,283,421.50−$343,332.50=$1,940,089).

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using the Court's commission-based calculation under § 326(a) is $855,818.74, which results in an effective hourly rate of $171.20.²⁴⁵This rate is not particularly high and does not reflect the Trustee's experience or the difficulties of this case. No further adjustment is necessary.

3. Necessary Services

Given Dickson's theft of over $9 million and the rogue operations in Costa Rica, the ap- pointment of a Trustee was necessary. As discussed at length in its lodestar analysis, the Court has reduced the Trustee's fees to account for those services that were not necessary to the estate. No adjustment is necessary.

4. Reasonable Amount of Time

The Court finds that the reduced time calculated as part of its lodestar analysis (5,016 hours) is reasonable. No further adjustment is necessary.

5. Skill & Experience

This Bankruptcy Case presented challenges from the beginning of the Trustee's appointment. The Trustee has been a bankruptcy lawyer for over 30 years. (STP-30 at 34). While this chapter 11 appointment was the Trustee's first, she is an experienced bankruptcy attorney. No adjust- ment is necessary.

6. Customary Compensation Outside of Bankruptcy

There was no testimony or other evidence presented at Trial as to whether the Trustee's fees are in line with customary compensation awarded attorneys outside of bankruptcy. No adjust- ment is necessary.

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b. Adjustment to Trustee's Compensation under Johnson Factors

Lastly, the Court considers whether the lodestar requires any additional adjustments based on the twelve factors enumerated in Johnson. Four of the Johnson factors—novelty and complexity of the issues, special skill and experience of counsel, quality of representation, and results ob- tained from the litigation—are already taken into account in the lodestar calculation. See Von Clark v. Butler, 916 F.2d 255, 258 (5th Cir. 1990) (holding that courts must be careful not to

"double count" a Johnson factor already considered). The first and second Johnson factors, the time and labor required and the rates charged, are also subsumed in the lodestar analysis. Two additional Johnson factors, the customary fee and awards in similar cases, overlap the "custom- ary compensation outside of bankruptcy" factor under § 330(a). The remaining five Johnson fac- tors are: preclusion of employment, whether the fee is fixed or contingent, time limitations, the undesirability of the case, and the nature and length of the professional relationship with the cli- ent. At least one bankruptcy court has questioned the usefulness of these factors in the context of a bankruptcy case as opposed to a typical fee-shifting case where the Johnson factors originated. See El Paso Refinery, 257 B.R. at 826-27.

1. Time & Labor Required

The Trustee testified that she spent substantial time and effort in this Bankruptcy Case. Dur- ing the first year of her appointment, she often worked late nights answering telephone calls from borrowers. (Dkt. #3526 at 101). That intense work, however, was temporary, lasting only until ClearSpring took over the loan servicing work. The Trustee maintains that her total requested compensation pursuant to § 326 is considerably less than the lodestar amount given the hours she logged in the Bankruptcy Case.

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The Court notes that the first and second bankruptcy judges granted JW interim compensa- tion for performing trustee work given the circumstances. (STP-91 at 159). EFP/EFT agreed to this additional compensation. No further adjustment is necessary.

2. Novelty & Difficulty of the Questions

In formulating this factor, the Fifth Circuit noted that "[c]ases of first impression generally require more time and effort on the attorney's part" and that the attorney "should be appropriate- ly compensated for accepting the challenge." Johnson, 488 F.2d at 718. The Trustee contends this Bankruptcy Case involved complex federal, state, and international law issues, parallel crim- inal and civil proceedings, and issues and property affected by two countries in Latin America. (STP-30 at 28). She also contends that this Bankruptcy Case was unusual because it involved complex appellate and remand procedural issues on multiple related appeals before two appellate courts and the remand by the Fifth Circuit to this Court. (STP-30 at 28). Her contentions are more applicable to the fees billed by JW than those she billed for work related to her statutory duties as outlined in § 1106, which provides, in pertinent part, that "a trustee shall," among other things, "perform the duties of the [chapter 7] trustee, as specified in paragraphs (2), (5), (7), (8), (9), (10), (11), and (12) of section 704." A trustee's most important duty is to "collect and reduce to money the property of the estate for which such trustee serves." 11 U.S.C. § 704(a). Next, the Trustee asserts that her tasks were hindered by Dickson's failure to turnover CHFS's operating books and records and her lack of access to any electronic loan servicing rec- ords until late April 2014. (STP-30 at 28-29). She alleges that she continued to be hindered throughout the life of this Bankruptcy Case in providing payoff and other information to borrow- ers and in cancelling liens that had been paid off prior to her appointment but not released by

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CHFS. She quotes the second bankruptcy judge's order issued in an adversary proceeding, as follows:

The cyber-security division of the Trustee's forensic tracing expert . . . attempted without success to crack the password-protected portions of CHFS's servers. As a result, the Trustee does not have all of CHFS books and records and cannot access the password protected portions of the servers. Administration of the Estate, therefore, has been ham- pered, necessarily increasing servicing expenses and fees by ClearSpring and by the Trustee and her counsel.

(STP-30 at 28) (citing Adv. 14-00030-NPO, Dkt. #301 at 44).

In opposition, Dr. Edwards and Borg testified at Trial that they gave the Trustee a list of the names, addresses, and telephone numbers of all borrowers and a detailed report for each loan showing the payment history and principal balance. (Dkt. #3527 at 17-19; Dkt. #3532 at 12; EE-

7). The only loans that Dickson took with him to Costa Rica were those underlying Portfolio #7 which did not belong to the estate anyway. When the Trustee was appointed, the underlying loans for the Home Improvement Loans were in the custody of a local Jackson attorney, and Portfolios #1-6 were in Dr. Edwards' possession in Maryland. In other words, the information was there all along. Moreover, Dr. Edwards hired counsel in Costa Rica to track Dickson's bank- ing activities, and he provided that information too to the Trustee. Both Dr. Edwards and Borg were convincing in their testimony that they provided the Trustee with the records in their pos- session and that they would have provided any other additional information requested by the Trustee. No adjustment is necessary.

3. Skill Required

This factor focuses on the level of "skill necessary to properly perform the . . . services" and overlaps with the ninth Johnson factor ("the experience, reputation, and ability"). Johnson, 488

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F.2d at 718-19. The Court finds that the Trustee leveraged her experience to handle multi-state and international issues and that she was diligent in stabilizing the estate and marshalling assets. No adjustment is necessary.

4. Preclusion of Other Employment

The Trustee testified that she committed so much time to this Bankruptcy Case in 2014 and 2015 that she was unable to commit "a whole lot of time" to other cases. (Dkt. #3528 at 29-31). The Court acknowledges that the Bankruptcy Case may have totally consumed the Trustee in the beginning of her appointment and that it took "all hands on deck" to stabilize the estate. In 2016, however, her work hours on this Bankruptcy Case declined to about half of her total hours for that year. With the stay in place during the pendency of the appeal of the Global Opinion, her hours decreased even more. Geno testified that during this time, the Trustee was actively in- volved in Express Grain, a complex chapter 11 case where he served as DIP counsel. (Dkt. #3527 at 257; Dkt. #3529 at 29-31). The Trustee's involvement in that case shows that at least by 2021 her work in this Bankruptcy Case was not all-consuming. Even so, she did not show that she suffered any actual loss of income. No adjustment is necessary.

5. Customary Fee

The Trustee presented no evidence at Trial on the customary fee of a chapter 11 trustee under similar facts. The value of the Trustee's time (5,016 hours) as adjusted by this Court is $1,940,089, which is more than the statutory cap of $855,818.74. Based on the Court's calcula- tions, the Trustee's maximum statutory compensation is approximately 44% of the total value of her time invested.²⁴⁶No adjustment is necessary.

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6. Whether the Fee Was Fixed or Contingent

The Trustee argues that her fees were contingent in that payment depended upon the availa- bility of estate assets. (STP-30 at 31). At Trial, however, the Trustee testified that she knew with- in six months of her appointment that there would be assets in the estate. (Dkt. #3526 at 126). Also at Trial, the Trustee complained that she was "going into my third year of operating this case under very difficult circumstances, with no compensation." (Dkt. #3528 at 90-91). This statement does not appear to be accurate. The table below demonstrates the timeline:

Trustee 's Fee Application²⁴⁷ Date Filed Date Paid Months Pending

First 02/20/2015 09/09/2016 1 year, ~7 months Am. Second 07/08/2016 09/21/2016 2 months, 13 days Third 06/16/2017 07/10/2017 < 1 month Fourth 10/16/2017 11/13/2017 < 1 month Fifth 02/13/2018 03/07/2018 < 1 month Sixth 06/21/2018 07/16/2018 < 1 month Seventh 10/22/2018 11/14/2018 < 1 month Ninth 07/30/2019 08/22/2019 < 1 month Tenth 11/26/2019 12/18/2019 < 1 month Eleventh 03/30/2020 04/21/2020 < 1 month Twelfth 07/21/2020 08/12/2020 < 1 month Thirteenth 11/19/2020 12/11/2020 < 1 month Fourteenth 03/31/2021 04/22/2021 < 1 month Fifteenth 07/15/2021 08/06/2021 < 1 month Sixteenth 10/19/2021 11/10/2021 < 1 month Seventeenth 03/17/2022 04/08/2022 < 1 month Eighteenth 07/22/2022 03/31/2023 8 months, 9 days Nineteenth 11/29/2022 03/31/2023 4 months, 2 days Twentieth 02/27/2023 03/31/2023 1 month, 4 days Twenty-First 06/16/2023 07/12/2023 < 1 month (STP-8 to -30). Payment on the Trustee's First Fee Application was delayed for a significant pe- riod of time,²⁴⁸but not three years. Moreover, this timeline shows that beginning with the Trus- tee's Third Fee Application, the Trustee was paid 100% of her statutory compensation under § 326 within one month from the date each interim fee application was filed, with the exception of the Trustee's Eighteenth and Nineteenth Fee Applications. EFT/EFT had filed limited objec- determined by the Court) is included, as discussed later. ($855,818.74+$110,100÷$1,940,089=0.50).

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tions to those applications, which were not withdrawn until March 28, 2023 when the parties an- nounced their settlement. (Dkt. #3026, #3075, #3145, #3146). Even assuming that delays in payment fall within this factor, they were not long enough to justify an adjustment to the lode- star. No adjustment is necessary.

7. Time Limitations

The Trustee was operating under significant time constraints when she was first appointed. Dr. Edwards and Borg testified that the estate was stable in late 2014 after most loans were boarded with the loan servicer. Once the estate was stabilized, any overly burdensome time con- straints lessened. No adjustment is necessary.

8. Amount Involved & Results Obtained

The fundamental inquiry for this eighth Johnson factor is whether the "professional's actions in this case benefited the bankruptcy estate to such an admirable degree that a mere multiplica- tion of the hours expended by the hourly rate fails to adequately compensate the individual for the work they have done." In re New England Compounding Pharm., Inc., 544 B.R. 724, 737 (Bankr. D. Mass. 2016).

The Trustee emphasizes that upon her appointment, the estate had only $7,500 in its DIP ac- count but her efforts resulted in total funds collected and/or recovered well in excess of the funds diverted by Dickson. EFP/EFT do not dispute that CHFS was in dire financial condition when the Trustee took over its operations, not because of mismanagement or economic factors but be- cause Dickson had stolen over $9 million from the estate. Before Dickson's theft, CHFS's opera- tions generated substantial cash flow.

In the initial months of her appointment, the Trustee undertook substantial efforts to stop

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Dickson's continuing criminal conduct and re-establish CHFS's loan servicing operations. (Dkt. #3526 at 101). She and Barber testified about late nights at JW's offices answering telephone calls from angry and confused borrowers. She suggests that her efforts were unassisted but they were not. She had help from Dr. Edwards and Borg at the onset of her appointment. They pro- vided the Trustee with documentation for all loans except those underlying Portfolio #7, which Dickson had taken with him and which the estate did not own anyway. The Trustee insists that she collected more than $30 million in cash for the estate (comprised of Trustee's initial collections from borrowers, ClearSpring's collections from borrowers, inter- cepted funds, and criminal restitution payments). More than $21.5 million of that $30 million, however, was collected by ClearSpring at a cost to the estate of $6,403,734.02 in servicing fees. (Dkt. #3526 at 129; Dkt. #3528 at 23-24; EE-1). Moreover, the extent of the total collections are attributable to others as well, including Dr. Edwards, Borg, and even Dickson who cooperated in returning estate funds to reduce his criminal sentence. No adjustment is necessary.

9. Experience of the Trustee

The Trustee submits that she has "a reputation as a highly experienced professional in the areas of bankruptcy, insolvency, and corporate reorganization." (STP-30 at 34). She asserts that she is board certified in business bankruptcy by the American Board of Certification, a Fellow in the American College of Bankruptcy, as Senior Fellow in the Litigation Counsel of America, and ranked in Chambers U.S.A. She testified that she has been a bankruptcy lawyer for over 30 years although her appointment as the chapter 11 trustee in this Bankruptcy Case was her first such appointment. (Dkt. #3528 at 36-37). Her qualifications, although impressive, are not so unusual as to warrant an adjustment.

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10. Undesirability of the Bankruptcy Case

The Trustee maintains that the risk of nonpayment rendered this Bankruptcy Case undesira- ble. (STP-30 at 35). At Trial, however, the Trustee testified that she knew within six months of her appointment that there would be assets in the estate. (Dkt. #3526 at 126). No adjustment is necessary.

11. Length of Professional Relationship with the Client

The Trustee did not have a prior relationship with CHFS before her appointment in this Bankruptcy Case. No adjustment is necessary.

12. Awards in Similar Cases

The Trustee did not present any evidence demonstrating that the approved award for the maximum amount available under § 326 is commensurate with the amount awarded other chap- ter 11 trustees in similar cases. No adjustment is necessary.

G. Summary of Court's Ruling on Trustee' s Compensation

After considering § 330(a)(3) and the Johnson factors, the Court finds that no further adjust- ment to the lodestar is necessary. Because the § 326 statutory cap is $855,818.74, which is less than the lodestar amount, the Court finds that the Trustee is entitled to total compensation of $855,818.74. Because $855,818.74 is more than the amount the Trustee has already been paid on an interim basis ($547,792.64), the Trustee is entitled to recover $308,026.10.

H. Additional Fees Pursuant to Joint Plan—"Estimated Commissions"

This Order should end here except for two ill-conceived provisions in the Joint Plan. In this jurisdiction, turning over property (such as pieces of paper that represent promises to pay) is not a "disbursement" within the meaning of § 326. As the Fifth Circuit explained:

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Because the Bankruptcy Code does not define "moneys" (or "money"), we must rely up- on the word's common everyday meaning, which does not include property. The plain language of § 326(a) indicates that the statute caps a trustee's compensation based upon only the moneys disbursed, without any allowance for the property disbursed. England, 153 F.2d at 235 (citations omitted). Notwithstanding this clear precedent, the Trustee seeks $227,436.31 (over the maximum § 326 cap) as a commission on in-kind disbursements²⁴⁹ because of the following ostensibly agreed-to provisions in the Joint Plan:

Section 1.26 "Distribution" means a payment in Cash, or in kind, made by the Trustee to the Holder of an Allowed Claim on account of such Allowed Claim pursuant to the terms and conditions of the Plan.

* * *

Section 3.1(c) Trustee Fees. For the avoidance of doubt, any Distributions made pursu- ant to this Plan of any property of the Estate (whether in Cash or in kind) shall be counted as a Distribution made by the Trustee for Claims.

(STP 274 at 5, 13), which appear to conflict with these provisions in the Joint Plan:

Section 1.80 "Trustee's Fees" collectively means all fees and charges the Trustee is en- titled to pursuant to 11 U.S.C. §§ 323, 326, 330, or 331.

Section 3.2(c)(i) The Trustee shall be compensated pursuant to the provisions of the Bankruptcy Code. The Trustee must file . . . an application for final allowance of her chapter 11 Trustee's fee under section 326 of the Bankruptcy Code within sixty (60) days after the Effective Date.

(STP-274 at 13-14) and also appears to conflict with § 326:

In a case under chapter 7 or 11, the court may allow reasonable compensation under sec- tion 330 of this title of the trustee for the trustee's services, payable after the trustee ren- ders such services, not to exceed 25 percent on the first $5,000 or less, 10 percent on any amount in excess of $5,000 no not in excess of $50,000, 5 percent on any amount in ex- cess of $50,000 but not in excess of $1,000,000, and reasonable compensation not to ex- ceed 3 percent of such moneys in excess of $100,000,00 upon all moneys disbursed or turned over in the case by the trustee to parties in interest, excluding the debtor, but in- cluding holders of secured claims.

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11 U.S.C. § 326(a) (emphasis added); (Dkt. #3528 at 208-09). How these provisions in the Joint Plan transpired is troubling to the Court. The parties' settlement—the material terms of which were announced to the Court during the remand hearing on March 28, 2023—were to be incor- porated into a joint plan. Drafts of a joint plan were exchanged until a final version was filed on May 15, 2023. (STP-106; Dkt. #3532 at 56). An order confirming the Joint Plan was entered on July 12, 2023. (Dkt. #3288). Thereafter, on August 22, 2023, the Trustee filed the Trustee's Final Fee Application seeking $584,000 based on a percentage of cash disbursements and $752,250.97 based on "estimated commissions." (STP-30 at 1). The "estimated commissions" were a percent- age of "effective and/or future disbursements under the confirmed Joint Plan," including in-kind distributions, that is, non-cash disbursements—essentially, the assignments of the assets to EFP/BHT. When pressed by the Court, both sides admitted that there were no conversations about the provisions in the Joint Plan allowing commissions on in-kind disbursements. It is sur- prising that these terms—concerning substantial fees that have been at issue throughout the en- tire Bankruptcy Case—were apparently never discussed. Unfortunately, the Court did not catch these provisions before confirming the Joint Plan. Because of their failure to discuss these con- sequential terms, the parties now are unable to agree on the calculation, creating yet another is- sue for resolution by this Court.²⁵⁰

Notwithstanding the murky events that led to these provisions, EFP/EFT agreed at Trial not

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to contest their enforceability. (Dkt. #3527 at 288-89; Dkt. #3521 at 39-40). The Joint Plan pro- vides no formula for calculating the value of in-kind distributions and does not address: (1) which non-money assets should be counted as in-kind; (2) how those assets should be valued or

(3) whether they should be allowed to increase the statutory cap of § 326. The absence of these key elements in the Joint Plan leads the Court to question the extent to which there was a true meeting of the minds. Counsel for the Trustee maintained that these provisions were "negotiated and agreed to and bargained for." (Dkt. #3528 at 209-10). When questioned more closely, the Trustee revealed that they were "specifically negotiated . . . in terms of the . . . exchange of the document and the markup of the document." (Dkt. #3528 at 213). In other words, the provisions were contained in the Trustee's Second Amended Plan, which JW forwarded to EFP/BHT's counsel to use as a draft for the Joint Plan, but the provisions themselves were never separately discussed. (Dkt. #3528 at 186-87). Indeed, JW's invoices for this period do not show any discus- sion between counsel specifically regarding in-kind disbursements or the values unilaterally as- signed by the Trustee to estate property.

At closing arguments at Trial, counsel for EFP/EFT represented to the Court that EFP/EFT would not object to the in-kind disbursements, "[T]the plan says what it says. It does include in- kind distributions, and so we're not pursuing that, but we are—do object to how it was calculat- ed." (Dkt. #3521 at 39). EFP/EFT only challenge the values assigned to the disbursements—not the enforceability of the Joint Plan,²⁵¹which if they had, no doubt would have required substan- tial additional time and expense for both sides to litigate.

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1. How the Court Calculates In-Kind Disbursements or Estimated Commissions Pursuant to Joint Plan

The Court declines to read the sparse information in the Joint Plan as a work around of the clear limits placed on chapter 11 trustee compensation under § 326. Instead, this Court treats this second component of the Trustee's compensation as simply part of the settlement reached at the remand hearing and later memorialized in the Joint Plan. According to the parties at Trial, that settlement foists upon this Court the burden of appraising the value of certain in-kind disburse- ments selected by the Trustee.²⁵²The Trustee then proposes to pay herself 3% of the value of those assets. The in-kind disbursements include: (1) her rights to an escrow account in Costa Ri- ca and (2) the Home Improvement Loans and Mortgage Portfolios. EFP/EFT disagree with the Trustee's valuation. Each in-kind distribution is discussed below:

2. Assignment of Rights to Costa Rica Condo Sale Escrow Account

The Trustee seeks a commission of $12,572.76, based on $419,091.94 in sale proceeds de- posited into an escrow account (the "Costa Rica Condo Sale Escrow Account") in a bank in Cos- ta Rica. The Trustee assigned EFP/BHT the rights to the Costa Rica Condo Sale Escrow Account pursuant to the Joint Plan. EFP/EFT argue that the assignment has zero value. The proceeds in question were generated from the sale of a condominium owned by Dickson or his affiliate (not CHFS) in Costa Rica. Dickson forfeited the condominium to the Trustee as part of the U.S. criminal proceedings against him. However, the Costa Rican government seized the condominium as part of its own foreign criminal proceedings against Dickson for money laundering. (Dkt. #3528 at 180). With the Costa Rican government's approval and the Trustee's

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cooperation, the condominium was sold and $419,091.94 was deposited into the Costa Rica Condo Sale Escrow Account. During her tenure, the Trustee was unable to obtain a release of those funds but claims a $12,572.76 commission based on the assignment to that account. According to the Trustee, the Costa Rican government will release those funds, upon final resolution of the criminal proceedings, to the United States government, which, in turn, will pay them to the "victim" pursuant to the District Court's restitution judgment. (Dkt. #3528 at 181). That process involves a U.S. forfeiture agent. (Dkt. #3528 at 181-82; Dkt. #3531 at 101-02). The Trustee is unsure why the Costa Rican government has not yet released the funds. The Trustee testified that no money from the Costa Rica Condo Sale Escrow Account had been released as of the Trial date. (Dkt. #3531 at 103-04). Dr. Edwards testified that he retained a Costa Rican law firm to attempt to negotiate the release of those funds and believed the money in the account will remain the property of the Costa Rican government for the foreseeable future. (Dkt. #3532 at

68). "We have no chance of getting that money." (Dkt. #3532 at 68). When asked on cross exam- ination if he would be willing to assign the Costa Rica Condo Sale Escrow Account back to the Trustee, Dr. Edwards called the Trustee's bluff, replying, "Sure." (Dkt. #3532 at 144-45). Dr. Edwards' offer to assign the account back to the Trustee, along with his testimony as to his unsuccessful efforts to obtain the funds, convinces the Court that the Costa Rica Condo Sale Escrow Account had little to no value at the time it was assigned to EFP/BHT. Because the mon- ey may never be disbursed and because the Trustee failed to provide any evidence of the value of the assigned account that considered the near zero chance of any recovery, the Court finds that the Trustee is not entitled to a commission on this in-kind distribution.

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3. Assignments of Mortgage Portfolios & Home Improvement Loans

As Trustee's counsel conceded at Trial, it is this Court's "call to make on whose valuation is most reasonable." (Dkt. #3521 at 40). The Trustee did not retain a financial expert to appraise the value of the loan portfolios. She relies on her own testimony to prove their value. Dr. Edwards disagreed with the Trustee's calculations and her valuation methodology. The Trustee valued the loans based on a percentage of the total unpaid principal balance as of the date they were assigned to EFP/BHT.²⁵³The numbers were a moving target at Trial. In the Trustee's Final Fee Application, the Trustee asserted that the value of the loans was $13,179,014.80 based on an unpaid principal balance of $51,702,686.50 and a 25.49% historical collection rate averaged over nine years. (STP-30 at 24). That value multiplied by 3% yields ad- ditional compensation of $395,370.44.²⁵⁴Mid-Trial, however, the Trustee discovered two errors in her calculation that she admitted rendered these numbers incorrect. (Dkt. #3531 at 108-09). The Trustee's first error was her calculation of the unpaid principal balance of the loans ($51,702,636.50). (Dkt. #3531 at 108-09). Because Portfolio #7 was not property of the estate, the Trustee should have excluded the unpaid principal balance of the loans comprising Portfolio #7 ($4,349,719) from the total unpaid principal balance. (Dkt. #3530 at 142, 149-50). The Trus- tee admitted her error at Trial and testified that the correct unpaid principal balance was $47,352,968. (Dkt. #3530 at 149-50; Dkt. #3531 at 108; T-13).

The Trustee's second error was her calculation of the average historical collection rate of the loans at 25.49%. That percentage was too high because it was based on the collection rates of

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only active and dormant loans and had excluded "recovery" loans, which had a much lower col- lection rate.²⁵⁵In its reports, ClearSpring siloed the "recovery" loans separately from active and dormant loans, and the Trustee had apparently overlooked that section of its report. Mid-Trial, the Trustee admitted her mistake. She averaged the collection rates of active and dormant loans (25%) and "recovery" loans (1.59%) to arrive at a lower collection rate of 16.01%. The Trustee's revised unpaid principal balance of the Home Improvement Loans and Portfolios #1-6 ($47,352,968) multiplied by her corrected collection rate of 16.01% is $7,581,210.10, which she asserts is the value of the Home Improvement Loans and Portfolios #1-6. (Dkt. #3530 at 109; STP-30). That purported value ($7,581,210.10) multiplied by 3% yields additional requested compensation of $227,436.31.²⁵⁶(EE-36).

EFP/EFT argue that the unpaid principal balance and the collection rate, even as reduced by the Trustee at Trial, are too high. They contend that the total unpaid principal balance should not have included "recovery" loans, that is, loans that ClearSpring had reported as uncollectible. The sum of the outstanding balance of only active and dormant loans (excluding recovery loans), amounted to only $22,725,233.30, not $47,352,968. (Dkt. #3531 at 118, 123, 125). Next, EFP/EFT complain about the Trustee's valuation method. (Dkt. #3532 at 65). They contend that the present value of the loans cannot be determined solely from historical collection rates because the average duration of these loans is nine years "so the loans that gave rise to the Trustee's collection numbers, most of those loans are gone." (Dkt. #3532 at 65). To that point, Dr. Edwards testified that collections for 2023 totaled only $651,000. Borg testified that net col- lections from August 2023 through February 2024 (the six-month period after the Trustee had

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transferred the loans to EFP/BHT) were only $520,322.25. (EE-4 at 815; Dkt. #3527 at 43). Dr. Edwards testified that collections on all loans have declined annually by 16% on average. (Dkt. #3532 at 59-60, 157; STP-30). Applying that rate of decline to loan collections in 2023 of only $651,000 indicates that collections on the loans for the next ten years will be no more than $2,870,000.²⁵⁷(Dkt. #3532 at 66). That number, however, is too low because sometime after July 14, 2023, when the Trustee transferred the loans to EFP/BHT, Borg negotiated a reduction in servicing costs that increased the payout by $180,000. That additional amount represents a 28% increase in collections. A corresponding increase in $2,870,000 results in $3,670,000 in collec- tions over the next ten years, which Dr. Edwards asserts is the value of the Home Improvement Loans and Portfolios #1-6. Dr. Edwards, who has over 42 years of experience in the loan- servicing business, testified, "[T]hat is a very fair and logical judgment as to the value of the loans being returned." (Dkt. #3532 at 66).

The Court adopts Dr. Edwards' valuation of the loans at $3,670,000.²⁵⁸See S. Cent. Livestock Dealers, Inc. v. Sec. State Bank, 614 F.2d 1056, 1061 (5th Cir. 1980) (recognizing that an owner of a business is qualified to testify about the value of that business); F ED. R. EVID. 701. Although the Trustee attempted to discredit Dr. Edwards, the Court found him to be a credible and knowl- edgeable witness. His calculations were simple and straightforward and were not based solely on historical data. See Fin. Sec. Assurance Inc. v. T-H New Orleans Ltd. P'ship (In re T-H New Or- leans Ltd. P'ship), 116 F.3d 790, 799 (5th Cir. 1997) (recognizing that the Bankruptcy Code

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does not prescribe a particular method of valuing property but leaves valuation questions to judges on a case-by-case basis). Conversely, the Court found the Trustee's valuation at $7,581,210.10 to be less reliable, in part because of the fluidity of her calculations at Trial. In summary, based on the evidence provided at Trial, the Court finds that the value of the Home Improvement Loans and Portfolios #1-6 is $3,670,000 pursuant to the Joint Plan. Accord- ingly, the Trustee is entitled to 3% of that amount, which totals $110,100.

CONCLUSION

This Order should not be read in a vacuum. It is a deep analysis of only a few objectionable decisions made in a chapter 11 case spanning over a decade where the Trustee, guided by JW, made hundreds, if not thousands, of appropriate decisions. JW is a highly regarded law firm, and the services it provided the Trustee were of high quality. Dr. Edwards' ire, however, is under- standable. He was not made whole by the bankruptcy process. No doubt this Order will disap- point both sides, but the Court believes that the compensation awarded herein is reasonable and within the confines of Bankruptcy Code and legal precedent.

The Court has worked diligently to calculate reasonable fees and expenses as close to math- ematical precision as possible. Courts, however, are not "green eye-shade accountants." Fox v. Vice, 563 U.S. 826, 838 (2011) "The essential goal . . . is to do rough justice, not to achieve au- diting perfection" Id.; see Berliner v. Pappaloardo (In re Sullivan), 674 F.3d 65, 70-71 (1st Cir. 2012) (holding that a bankruptcy court's explanation of its fee award "need not proceed line by line through the fee application [but] need only be sufficiently detailed to allow a reviewing court to ascertain the trial court's thought processes"). Any calculation errors in this Order would not change the Court's ruling as to the reasonableness of the fees and expenses awarded herein.

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IT IS, THEREFORE, ORDERED that JW is awarded $5,226,639.60 in fees and $318,547.37 in expenses pursuant to § 330(a).²⁵⁹JW must disgorge $290,095.35 and pay that amount to EFP/EFT within 30 days of the date of this Order.²⁶⁰

IT IS FURTHER ORDERED that JW's request for a $920,000 rate restoration is denied.

IT IS FURTHER ORDERED that the Trustee is awarded the maximum statutory cap of $855,818.74 pursuant to § 326. Because the statutory cap is more than the amount paid the Trus- tee on an interim basis, the Trustee is entitled to recover $308,026.10.

IT IS FURTHER ORDERED that the Trustee is awarded additional fees of $110,100 pursu- ant to the parties' agreement in the Joint Plan.

IT IS FURTHER ORDERED that any funds held by the Trustee in excess of the amounts awarded herein shall be turned over to EFP/EFT within 30 days of the date of this Order. To the extent the Court has not addressed any of the parties' other arguments or positions, it has considered them and determined they would not alter the result.

##END OF ORDER##

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JW FEE APPLICATIONS—CHARTS A-G

The timekeepers who appear in the charts below are identified in alphabetical order as follows:

Attorneys: Paralegals:

LFA Laura F. Ashley KB Kilby M. Brabson EJA Edward J. Ashton MWG Michelle Green JRB Jeffrey R. Barber BKP B. Karan Payne SMB Stacey M. Buchanan

JFF John F. Fletcher

ASH Andrew S. Harris

SHK Shawn H. Keifer

KMJ Kristina M. Johnson

EWDL Elizabeth De Leon

SBM Stephanie B. McLarty

MAM Mark Mintz

RPV R. Patrick Vance

Some descriptions of the services provided mistakenly indicate "no charge" or "reduced by" even though an amount for that work appears in the last column, showing that the estate was billed for those services. The fees are reduced based on the amount shown in the last column regardless of the description.

1 The time entries that have not already been disallowed in the Cumulative Interim Fee Order appear in bold typeface.

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357 06/11/15 JRB WORK ON BRIEF IN OPPOSITION TO MOTION TO DISMISS. 2.90 345 1,000.50

(1.00)

357 06/11/15 KMJ REVIEW AND REVISE RESPONSE BRIEF ON MOTION TO 1.00 350 350.00

DISMISS.

358 06/12/15 JRB WORK ON BRIEF IN OPPOSITION TO MOTION TO DISMISS 4.90 345 1,690.50

RICO CASE.

358 06/12/15 LFA RESEARCHED STANDARD FOR COURT TO ALLOW 1.50 265 397.50

PLAINTIFF LEAVE TO AMEND COMPLAINT TO ASSIST WITH

OPPOSITION TO MOTION TO DISMISS.

358 06/12/15 LFA RESEARCHED STANDARD FOR ATTACHING DOCUMENTS 1.00 265 265.00

TO OPPOSITION TO MOTION TO DISMISS.

358 06/12/15 LFA DRAFTED MEMORANDUM SUMMARIZING RESEARCH 1.00 265 265.00

FINDINGS TO ASSIST WITH OPPOSITION TO MOTION TO

DISMISS.

359 06/13/15 JRB WORK ON BRIEF IN OPPOSITION TO MOTION TO DISMISS 4.40 345 1,518.00

RICO CLAIM

359 06/14/15 JRB E-MAIL EXCHANGES AND CONFERENCE CALL WITH M. .70 345 241.50

MINTZ AND K. JOHNSON RE BRIEF IN OPPOSITION TO MOTION

TO DISMISS.

359 06/14/15 JRB WORK ON BRIEF IN OPPOSITION TO MOTION TO DISMISS 2.70 345 931.50 360 06/15/15 JRB REVIEW, REVISE, AND FINALIZE OPPOSITION TO MOTION TO 9.80 345 3,381.00

DISMISS AND BRIEF IN OPPOSITION TO MOTION TO DISMISS

RICO COMPLAINT.

360 06/15/15 KMJ REVIEW AND REVISE DRAFT OF RESPONSE TO MOTIN [sic] TO 1.50 350 525.00

DISMISS RICO CASE FOR CONSISTENCY WITH PRIOR FILINGS.

360 06/15/15 SBM REVIEWING AND REVISING RESPONSE TO MOTION TO 6.90 210 1,449.00

DISMISS IN PREPARATION OF FILING.

360 06/15/15 KB WORK ON FINALIZATION OF RESPONSE BRIEF TO EFP/BHT 3.60 155 558.00

MOTION TO DISMISS IN RICO SUIT.

360 06/15/15 KB ELECTRONICALLY FILE RESPONSE AND BRIEF IN SUPPORT OF .40 155 62.00 RESPONSE TO EFP/BHT MOTION TO DISMISS IN RICO SUIT.

TOTAL 250.20 61,795.50

RICO COMPLAINT— JW THIRD FEE APPLICATION Page Date Initials Description Hours Billing Fees No. Rate

1 07/01/15 JRB E-MAIL EXCHANGE WITH S. RIPPEE RE DEFENDANTS' .20 345 69.00

REQUEST TO EXCEED PAGE LIMITS ON RICO BRIEF

1 07/01/15 JRB CONFERENCE CALL WITH M. MINTZ RE STRATEGY IN RICO .20 345 69.00

ACTION

2 07/02/15 KMJ REVIEW ISSUES RE DISTRICT COURT AND DETERMINE .70 350 245.00

STRATEGY RE EFFECT ON UPCOMING SETTINGS IN

BANKRUPTCY COURT

3 07/06/15 JRB REVIEW EFP AND BHT REPLY BRIEF ON MOTION TO DISMISS .40 345 138.00

IN RICO ACTION

7 07/09/15 MAM VARIOUS CONFERENCES REGARDING DECISIONS BY 3.50 290 1,015.00 JUDGE REEVES (3.00) (REDUCED BY 1.00); REVIEW AND

ANALYZE JUDGE REEVES DECISIONS

11 07/15/15 JRB REVIEW ORDER ON MOTION TO DISMISS RICO CASE .30 345 103.50

11 07/15/15 JRB CONFERENCE CALLS WITH TRUSTEE AND M. MINTZ RE .60 345 207.00

STRATEGY ON FEDERAL DISTRICT COURT CAUSE OF

ACTION.

11 07/15/15 RPV EMAILS FROM AND TO MS. JOHNSON, MR. MINTZ, MS .20 350 70.00

MCLARTY AND MR. BARBER REGARDING STATUS OF RICO

SUIT.

12 07/15/15 MAM CONFERENCES WITH MS. JOHNSON AND MR. BARBER 2.50 290 725.00

REGARDING DECISION FROM JUDGE REEVES ON RICO CASE.

24 07/28/15 RPV EMAILS FROM MS. JOHNSON REGARDING RESEARCH AND .10 350 35.00

STATUS OF RICO CASE

26 07/29/15 JRB ATTEND STATUS CONFERENCE BEFORE JUDGE ANDERSON 2.60 345 897.00

AND RELATED DISCUSSIONS WITH OPPOSING COUNSEL RE

MEDIATION

26 07/29/15 JRB CONFERENCE CALL WITH M. MINTZ AND K. JOHNSON RE .40 345 138.00

RESULTS OF STATUS CONFERENCE BEFORE JUDGE

ANDERSON

28 07/30/15 JRB REVIEW AND REVISE ORDER DISMISSING RICO COUNT AND .90 345 310.50

DIRECTING MEDIATION.

28 07/30/15 KMJ REVIEW AND REVISE PROPOSED ORDERS IN RICO CASE FOR .60 350 210.00

MEDIATION AND DISMISSAL WITHOUT PREJUDICE OF RICO

COUNT

Page 276 of 356

30 07/31/15 JRB REVIEW AND REVISE ORDERS ON DISMISSAL OF RICO .30 345 103.50

COUNT AND MEDIATION

35 08/05/15 JRB FINALIZE COUNT DISMISSAL AND MEDIATION ORDERS FOR .50 345 172.50

SUBMISSION TO JUDGES REEVES AND ANDERSON.

37 08/05/15 KB REVISE AND FINALIZE AGREED ORDER DIRECTING .50 155 77.50

MEDIATION IN RICO ACTION

37 08/05/15 KB REVIEW WITH J. BARBER RE FINALIZATION OF AGREED .30 155 46.50

ORDER DISMISSING COUNT 1 OF RICO COMPLAINT AND

AGREED ORDER DIRECTING MEDIATION IN RICO ACTION

AND PROCEDURES FOR SUBMITTING SAME TO JUDGE.

37 08/05/15 KB DOCKET MEDIATION DATES IN RICO ACTION. .20 155 31.00 45 08/12/15 KB REVIEW WITH K. JOHNSON RE W. DICKSON'S RESET PLEA .30 155 46.50

HEARING IN CRIMINAL ACTION AND AUGUST 20 DEADLINE

TO SUBMIT MEDIATION PAPER IN RICO ACTION.

153 11/13/15 KB REVIEW WITH J. BARBER COURT'S ISSUANCE OF DOCKET .10 155 15.50

TEXT RE RESET STATUS CONFERENCE IN DISTRICT COURT

RICO CASE.

160 11/19/15 JRB STATUS CONFERENCE BEFORE JUDGE REEVES 1.00 345 345.00 160 11/19/15 SBM STATUS CONFERENCE WITH J. REEVES ON TRUSTEE'S 1.00 210 210.00

RICO ACTION

166 11/24/15 SBM DRAFTING PROPOSED ORDER FOR DISTRICT COURT TO .80 210 168.00

REFER RICO CASE TO BANKRUPTCY COURT.

168 11/30/15 JRB REVIEW AND REVISE REFERRAL ORDER RE RICO SUIT. .20 345 69.00

172 12/02/15 JRB REVIEW AND REVISE DISMISSAL SUMMARY JUDGMENT AND .70 345 241.50

REFERRAL ORDERS IN RICO CASE AND AP 12-91

173 12/03/15 JRB FINALIZE ORDERS ON REFERRAL, RULE 12 AND RULE 56 .20 345 69.00

MOTIONS

181 12/10/15 KB REVIEW AGREED ORDER REFERRING RICO CASE TO .40 155 62.00 BANKRUPTCY COURT AND E-MAIL CORRESPONDENCE TO

JUDGE REEVES' CHAMBERS FORWARDING SAID ORDER FOR

ENTRY

368 06/22/15 JRB E-MAIL EXCHANGE WITH S. RIPPEE RE DEFENDANTS' .10 345 34.50

REQUEST FOR ADDITIONAL TIME TO REPLY ON MOTION

TO DISMISS RICO SUIT.

368 06/22/15 KB REVIEW E-MAIL CORRESPONDENCE RE EFP/BHT REQUEST .10 155 15.50

FOR ADDITIONAL TIME FOR REBUTTAL AS TO MOTION TO

DISMISS RICO SUIT.

246 02/12/16 KB REVISE AND FINALIZE AMENDED RICO COMPLAINT AND 2.20 155 341.00

EXHIBITS TO SAME.

246 02/12/16 KB TELEPHONE CONFERENCE WITH M. MINTZ RE .30 155 46.50

FINALIZATION OF AMENDED COMPLAINT IN AP 15.80.

246 02/12/16 KB ELECTRONICALLY FILE AMENDED RICO COMPLAINT .40 155 62.00

TOTAL 22.80 6,389.00

RICO COMPLAINT—JW FOURTH FEE APPLICATION Page Date Initials Description Hours Billing Fees No. Rate

31 03/29/16 SBM REVIEW MOTION TO DISMISS IN AP 15-80 .10 210 23.00 32 03/29/16 KB DOCUMENT REVIEW AND DRAFT, REVIEW AND REVISE .80 155 124.00

AGREED ORDER GRANTING EXTENSION OF TIME TO

RESPOND TO EDWARDS MOTION TO DISMISS AP 15-80 AND

GRANTING EXTENSION FOR EDWARDS REBUTTAL

33 03/30/16 SBM REVIEW MOTION TO DISMISS AP 15-80 .50 210 115.00 29 03/25/16 KB DOCKET DEADLINE TO RESPOND TO EDWARDS MOTION .10 155 15.50

TO DISMISS EDWARDS MOTION TO DISMISS RICO

ADVERSARY PROCEEDING 15-80

35 03/31/16 SBM REVIEW PRIOR PLEADINGS AND MOTIONS IN PRIOR RICO .10 210 23.00

DISTRICT COURT CASE.

43 04/11/16 LFA RESEARCHED AND REVIEWED CASE LAW REGARDING 4.00 285 1,140.00

PROVING UP CIVIL CONSPIRACY UNDER A MOTION TO

DISMISS STANDARD.

181 09/07/16 KB REVIEW DISTRICT COURT RICO DOCKET WITH TRUSTEE. .10 155 15.50

TOTAL 5.70 1,456.00

Page 277 of 356

275 04/04/15 KMJ CONTINUE RESEARCH AND DRAFT AND REVIEW AND REVISE 10.00 350 3,500.00

BRIEF IN SUPPORT OF MOTION TO WITHDRAW REFERENCE

(10.00).

2 The time entries that have not already been reduced in the Cumulative Interim Fee Order appear in bold typeface.

Page 278 of 356

275 04/04/15 MAM REVISE AND EDIT MOTION TO WITHDRAW REFERENCE. 1.50 290 435.00

290 04/13/15 KB REVIEW AND ELECTRONICALLY DOWNLOAD RECENTLY 1.50 155 232.50

FILED PLEADINGS IN VARIOUS CASES, INCLUDING

VOLUMINOUS MOTION TO INTERVENE FILED IN DISTRICT

COURT.

Page 279 of 356

292 04/14/15 KB ELECTRONICALLY FILE MOTION TO INTERVENE AND 1.20 155 186.00 BRIEF IN SUPPORT OF SAME IN TRUSTEE'S RICO ACTION.

310 04/28/15 SBM RESEARCHING FOR REBUTTAL TO RESPONSE TO WITHDRAW 1.10 210 231.00

AND CONSOLIDATE.

Page 280 of 356

311 04/28/15 KB REVIEW TRANSMITTALS OF MOTION TO WITHDRAW .70 155 108.50

REFERENCE TO DISTRICT COURT RE VARIOUS JUDGES

AND MAGISTRATES ASSIGNED TO EACH

319 05/04/15 KB E-MAIL CORRESPONDENCE FORWARDING REBUTTALS TO .30 155 46.50

ALL COUNSEL ON SERVICE LIST.

Page 281 of 356

319 05/04/15 KB DOCKET DEADLINE TO RESPOND TO EDWARDS' .20 155 31.00

OBJECTION TO MOTIONS TO INTERVENE IN DISTRICT

COURT CASES.

363 06/17/15 JRB PREPARE FOR STATUS CONFERENCE BEFORE FEDERAL 1.10 345 379.50

DISTRICT COURT ON REMOVAL/CONSOLIDATION ISSUES.

Page 282 of 356

363 06/17/15 JRB CONFERENCE WITH TRUSTEE AND CONFERENCE CALL WITH 1.20 345 414.00

MARK MINTZ RE STRATEGY ON CONSOLIDATION

WITHDRAWAL ISSUES.

363 06/17/15 KMJ ATTEND STATUS CONFERENCE SET BY JUDGE REEVES ON 2.50 350 875.00

DISTRICT COURT MOTIONS AND ARGUE TRUSTEE POSITION

ON SAME.

364 06/17/15 SBM COLLECTING AND REVIEWING RECENT DOCUMENTS FOR 1.70 210 357.00

STATUS CONFERENCE.

364 06/17/15 SBM STATUS CONFERENCE BEFORE JUDGE REEVES. 2.50 210 525.00

373 06/29/15 JRB REVIEW ORDER DENYING WITHDRAWAL OF REFERENCE. .30 345 103.50

373 06/29/15 KMJ REVIEW JUDGE REEVES ORDER DENYING WITHDRAWAL OF .50 350 175.00

REFERENCE.

374 06/29/15 KB DOCUMENT REVIEW AND REVIEW RE DISTRICT COURT'S .40 155 62.00

DENIAL OF MOTION TO WITHDRAW REFERENCE.

374 06/30/15 JRB E-MAIL TO COURT CLERK RE ENTRY OF ORDER DENYING .20 345 69.00

MOTIONS TO WITHDRAW THE REFERENCE.

374 06/30/15 KMJ DETERMINE STRATEGY RE ORDER DENYING WITHDRAWAL .50 350 175.00

OF REFERENCE AND RELATED EMAILS.

374 06/30/15 RPV EMAILS FROM AND TO MS. JOHNSON REGARDING ORDER .10 475 47.50

DENYING THE MOTION TO WITHDRAW THE REFERENCE

374 06/30/15 RPV RECEIVED AND REVIEWED ORDER DENYING WITHDRAWAL .20 475 95.00

OF THE REFERENCE AND OFFICE CONFERENCES WITH MR.

MINTZ AND MS. JOHNSON REGARDING SAME

TOTAL 285.90 81,314.00

MOTIONS TO WITHDRAW, INTERVENE & CONSOLIDATE - JW THIRD FEE APPLICATION Page Date Initials Description Hours Billing Fees No. Rate

146 11/10/15 KB REVIEW RE PREPARATION OF ORDER WITHDRAWING MOTION .30 155 37.50

TO INTERVENE IN DISTRICT COURT CASES 3:13CV587 AND

3:14CV436

146 11/10/15 KB PACER SEARCHES AND RELATED DOCUMENT REVIEW RE .70 155 87.50

PREPARATION OF ORDER WITHDRAWING MOTION TO

INTERVENE IN DISTRICT COURT CASES 3:13CV587 AND

3:14CV436

146 11/10/15 KB DRAFT, REVIEW AND REVISE ORDER WITHDRAWING MOTION 1.20 155 150.00

TO INTERVENE IN DISTRICT COURT CASES 3:13CV587 AND

3:14CV436

150 11/12/15 KB REVIEW ORDERS WITHDRAWING MOTION TO INTERVENE IN .20 155 25.00

DISTRICT COURT CASES WITH J. BARBER.

150 11/12/15 KB REVISE AND FINALIZE ORDER WITHDRAWING MOTION TO .20 155 25.00

INTERVENE IN DISTRICT COURT CASE.

150 11/12/15 KB E-MAIL CORRESPONDENCE FORWARDING ORDER .20 155 25.00

WITHDRAWING MOTION TO INTERVENE IN DISTRICT COURT

CASES TO JUDGE REEVE'S CHAMBERS

TOTAL 2.8 350.00

MOTIONS TO WITHDRAW, INTERVENE & CONSOLIDATE - JW FOURTH FEE APPLICATION Page Date Initials Description Hours Billing Fees

No. Rate

161 08/20/16 JRB CONFERENCE CALL WITH TRUSTEE RE RESPONSE TO LUKE .60 345 207.00

DOVE ON RESTITUTION AND MOTION TO TRANSFER

CONTESTED MATTERS.

174 08/29/16 KB REVISE AND FINALIZE REPLY TO EDWARDS RESPONSE TO .40 155 62.00

MOTION TO TRANSFER.

227 10/28/16 KB DOCUMENT REVIEW RE PREPARATION OF MOTION TO .30 155 46.50

REURGE CONSIDERATION OF STALE MATTERS ON DOCKET.

TOTAL 1.30 315.50

CHART C

PENALTY PLAN - JW AMENDED SECOND FEE APPLICATION Page Date Initials Description Hours Billing Fees No. Rate

229 02/26/15 JRB CONFERENCE CALL WITH MEGAN CURRAN AND M. MINTZ RE .50 345 172.50

TAX ISSUES TO BE ADDRESSED IN POSSIBLE AMENDED PLAN.

257 03/24/15 JRB CONFERENCE CALL WITH TRUSTEE AND M. MINTZ TO 1.10 345 379.50

DISCUSS STRATEGY ON PLAN AND OTHER ISSUES.

262 03/30/15 JRB CONFERENCE WITH TRUSTEE RE PLAN AND MEDIATION .50 345 172.50

ISSUES.

262 03/30/15 JRB CONFERENCE CALL WITH M. MINTZ RE PLAN AND .70 345 241.50

MEDIATION ISSUES.

262 03/30/15 JRB DRAFT NOTICE OF WITHDRAWAL OF PLAN .50 345 172.50

Page 283 of 356

264 03/31/15 JRB MULTIPLE CONFERENCES WITH TRUSTEE RE STRATEGY ON 1.60 345 552.00

COMPUTER DATA AND IMPACT OF MEEHAN AFFIDAVIT ON

PLAN.

304 04/23/15 SBM REVISING DISCLOSURE STATEMENT. .90 210 189.00

Page 284 of 356

305 04/24/15 JRB BEGIN DRAFT OF MOTION TO SET BAR DATE. 2.10 345 724.50

344 05/22/15 KB DOCKET VARIOUS DEADLINES, INCLUDING DEADLINES ON .50 155 77.50

FIRST AMENDED DISCLOSURE STATEMENT AND DEADLINE

TO REPLY TO MOTION TO DISMISS FILED IN RICO SUIT.

Page 285 of 356

345 05/27/15 KB PACER SEARCH AND DOCUMENT REVIEW RE PROCEDURES .40 155 62.00

FOR NOTICING FIRST AMENDED DISCLOSURE STATEMENT

AND PLAN.

345 05/27/15 KB TELEPHONE CONFERENCE WITH COURT RE PROCEDURES .20 155 31.00

FOR NOTICING FIRST AMENDED DISCLOSURE STATEMENT

AND PLAN.

345 05/27/15 KB DRAFT, REVIEW AND REVISE CERTIFICATE OF MAILING RE .50 155 77.50

NOTICING OF FIRST AMENDED DISCLOSURE STATEMENT AND

PLAN.

345 05/27/15 KB PRELIMINARY WORK FOR NOTICING FIRST AMENDED .80 155 124.00

DISCLOSURE STATEMENT AND PLAN.

346 05/28/15 KB CONFIRM NOTICING OF FIRST AMENDED DISCLOSURE .20 155 31.00

STATEMENT AND PLAN COMPLETED.

346 05/28/15 KB REVIEW DRAFT CERTIFICATE OF MAILING ON FIRST .20 155 31.00

AMENDED DISCLOSURE STATEMENT AND PLAN WITH J.

BARBER.

346 05/28/15 KB REVISE AND FINALIZE CERTIFICATE OF MAILING ON FIRST .30 155 46.50

AMENDED DISCLOSURE STATEMENT AND PLAN.

346 05/28/15 KB ELECTRONICALLY FILE CERTIFICATE OF MAILING ON FIRST .20 155 31.00

AMENDED DISCLOSURE STATEMENT AND PLAN.

TOTAL 169.00 44,403.40

PENALTY PLAN -JW THIRD FEE APPLICATION Page Date Initials Description Hours Billing Fees No. Rate

2 07/01/15 RPV EMAILS FROM AND TO AND OFFICE CONFERENCE WITH MR. .30 350 105.00

MINTZ REGARDING PAYMENTS AND FUNDS ON HAND

TRUSTEE IS HOLDING IN CONNECTION WITH PLAN ISSUES.

2 07/01/15 MAM E-MAIL EXCHANGE AND CONFERENCE WITH MR. VANCE 1.00 290 290.00

REGARDING STRATEGY FOR CAUSE RESOLUTION INCLUDING

PLAN CONFIRMATION, PREFERENCE LITIGATION,

ADVERSARY LITIGATION AND RELATED MATTERS

2 07/02/15 RPV OFFICE CONFERENCE WITH MS. JOHNSON REGARDING PLAN .50 350 175.00

STRATEGY AND RELATED MATTERS

2 07/02/15 RPV OFFICE CONFERENCE WITH MR. MINTZ REGARDING PLAN .30 350 105.00

AND RELATED ISSUES

13 07/16/15 MAM CONFERENCE WITH MS. JOHNSON AND CREDITORS 1.00 290 290.00

REGARDING PLAN AND DISCLOSURE STATEMENT

19 07/21/15 KMJ REVIEW EFP/BHT OBJECTION TO DISCLOSURE STATEMENT .30 350 105.00 19 07/21/15 SBM REVIEWING EFP/BHT OBJECTION TO DISCLOSURE .80 210 168.00

STATEMENT FOR COMMENTING AT REQUEST OF K. JOHNSON

20 07/22/15 SBM REVIEWING EFP/BHT OBJECTION TO DISCLOSURE .60 210 126.00

STATEMENT FOR COMMENTING AT REQUEST OF K. JOHNSON

32 08/03/15 MAM CONFERENCES WITH TRUSTEE, P. VANCE ET. AL. REGARDING 1.50 290 435.00

CASE STATUS AND STRATEGY FOR PLAN CONFIRMATION

34 08/04/15 RPV OFFICE CONFERENCE WITH MR. MINTZ REGARDING PLAN .50 350 175.00

ISSUES

34 08/04/15 MAM CONFERENCE WITH MR VANCE REGARDING PLAN (REDUCED .50 290 145.00

BY 1.00)

49 08/17/15 RPV OFFICE CONFERENCE WITH MR. MINTZ REGARDING .30 350 105.00

MEDIATION AND PLAN ISSUES

66 09/01/15 SBM BEGIN DRAFTING CHAPTER 11 PLAN AGREEMENT FOR M. 1.10 210 231.00

MINTZ.

67 09/02/15 SBM DRAFTING CHAPTER 11 PLAN SUPPORT AGREEMENT FOR M. 7.00 210 1,470.00

MINTZ.

70 09/08/15 JRB CONFERENCE WITH TRUSTEE RE DISCLOSURE STATEMENT, .60 345 207.00

MEDIATION, AND RESTITUTION ISSUE

80 09/15/15 JRB DRAFT ORDER RESOLVING OBJECTIONS TO DISCLOSURE 1.40 345 483.00

STATEMENT

84 09/16/15 JRB E-MAIL TO J. SPENCER AND M. WILSON RE DISCLOSURE .10 345 34.50

STATEMENT ORDER

105 10/07/15 JRB E-MAIL EXCHANGE WITH M. WILSON RE DEBTX REVISIONS .10 345 34.50

TO DISCLOSURE STATEMENT.

119 10/20/15 JRB E-MAILS TO J. SPENCER RE STEPHEN SMITH COMPENSATION .20 345 69.00

ORDER AND DISCLOSURE STATEMENT ORDER.

131 10/29/15 KMJ DETERMINE STRATEGY RE HEARING ON MOTION TO 2.60 350 910.00

CLARIFY AND NEED FOR RECORD UPON LEARNING HEARING

TO BE HELD IN CHAMBERS AND RELATED CORRESPONDENCE

AND RESEARCH (1.00); REVIEW AND REVISE MOTION TO RECORD HEARING (.20); REVIEW RESPONSE TO MOTION TO

Page 286 of 356

CLARIFY (.40); CONTINUE REVIEW RECEIVERSHIP

PROCEEDINGS TRANSCRIPT AND POSSIBLE ADMISSIONS BY

EFP/BHT (1.00).

131 10/29/15 MAM REVIEWED AND REVISED DRAFT TERM SHEET FOR PLAN 2.00 290 580.00

SUPPORT AGREEMENT (REDUCED BY .50)

131 10/29/15 MAM RESEARCHED, DRAFTED AND FILED MOTION TO 1.20 290 348.00 TRANSCRIBE HEARING (1.00); CORRESPONDENCE WITH MS.

JOHNSON AND MR. BARBER RE SAME (.20)

131 10/29/15 SBM PREPARING MEMORANDUM FOR K. JOHNSON, J. BARBER, 2.20 210 462.00

AND M. MINTZ ANALYZING AND COMPARING TREATMENT OF

EFP/BHT CLAIMS IN FILED CHAPTER 11 PLANS. 132 10/29/15 KB TELEPHONE CONFERENCES AND E-MAIL CORRESPONDENCE .50 155 77.50 RE COURT REPORTER FOR OCTOBER 30 ON TRUSTEE'S

EXPEDITED MOTIONS AND PREPARATION OF PLEADINGS TO

REQUEST SAME FROM COURT

132 10/29/15 KB REVISE AND FINALIZE EXPEDITED MOTION TO TRANSCRIBE .50 155 77.50

OR RECORD HEARING AND ORDER GRANTING SAME.

132 10/29/15 KB ELECTRONICALLY FILE EXPEDITED MOTION TO TRANSCRIBE .20 155 31.00

OR RECORD HEARING AND ELECTRONICALLY UPLOAD

ORDER GRANTING MOTION TO COURT FOR ENTRY

134 10/30/15 SBM FINALIZING MEMORANDUM REGARDING FILED CHAPTER 11 .20 210 42.00

PLANS AND SENDING TO K. JOHNSON, J. BARBER AND M.

MINTZ.

149 11/12/15 JRB MULTIPLE E-MAIL EXCHANGES WITH J. SPENCER RE 1.00 345 345.00

SCHEDULING ON VARIOUS MATTERS, ORDER DENYING AS

MOOT INTERVENTION IN VARIOUS DISTRICT COURT

MATTERS, DISCLOSURE STATEMENT, AND REQUEST OF

JUDGE REEVES FOR A STATUS CONFERENCE

164 11/23/15 MAM CONFERENCE WITH MR. BARBER REGARDING PLAN ISSUES .90 290 261.00 164 11/23/15 SBM DISCUSSING DISCLOSURE STATEMENT WITH J. BARBER RE .30 210 63.00

REVIEWING DISCLOSURE STATEMENT FOR POTENTIAL

REVISIONS PRIOR TO UPCOMING HEARING

168 11/30/15 JRB E-MAIL EXCHANGE WITH JIM SPENCER RE FIRST AMENDED .20 345 69.00

DISCLOSURE STATEMENT

171 12/01/15 JRB REVIEW EFP AND BHT PROPOSED CHANGES TO THE .30 345 103.50

DISCLOSURE STATEMENT

184 12/15/15 JRB REVISE DISCLOSURE STATEMENT ORDER .60 345 207.00 195 12/29/15 KB EXTENSIVE DOCUMENTS REVIEW RE PRIOR DISCLOSURE .30 155 46.50

STATEMENT AS TO EQUITY SECURITY HOLDERS

220 1/21/16 KB REVIEW ORDER RESOLVING OBJECTIONS TO FIRST AMENDED .10 155 15.50

DISCLOSURE STATEMENT.

223 1/25/16 KB ELECTRONICALLY UPLOAD ORDER RESOLVING OBJECTIONS .20 155 31.00

TO FIRST AMENDED DISCLOSURE STATEMENT TO COURT FOR

ENTRY

TOTAL 31.40 8,444.50

PENALTY PLAN - JW FOURTH FEE APPLICATION Page Date Initials Description Hours Billing Fees No. Rate

24 03/21/16 JRB PREPARE FOR STATUS CONFERENCES ON PLAN AND .30 345 103.50

ADVERSARY PROCEEDINGS

25 03/22/16 JRB ATTEND STATUS CONFERENCE ON PLAN AND PENDING 1.50 345 517.50

ADVERSARY PROCEEDINGS

27 03/23/16 KB DOCKET RE-SET STATUS CONFERENCE ON CHAPTER 11 PLAN .20 155 31.00 AND MOTION TO DISMISS AP 12-91

104 06/21/16 JRB ATTEND HEARING ON PITNEY BOWES PREFERENCE MATTER 1.00 345 345.00

AND STATUS CONFERENCE ON PLAN (1.00) (1.00 FOR 345 NO

CHARGE)

124 07/15/16 SBM REVISE AND PREPARE OBJECTION TO CONFIRMATION AND 1.50 230 345.00

RESPONSE TO OBJECTION TO CLAIM TO BE FILED IN

BORROWER'S CHAPTER 13 BANKRUPTCY CASE (1.50). (.50 FOR $31.00 - NO CHARGE).

138 08/01/16 JRB MULTIPLE CONFERENCE CALLS WITH TRUSTEE AND M. 1.80 345 621.00

MINTZ TO DISCUSS SETTLEMENT CONCEPT MADE BY

EFP/BHT.

139 08/02/16 JRB WORK ON POTENTIAL SETTLEMENT OPTIONS WITH EFP/BHT. .50 345 172.50 139 08/02/16 JRB ATTEND STATUS CONFERENCE ON AP 12-91, PLAN AND 1.30 345 448.50

MOTION TO CONVERT.

154 08/17/16 JRB CONFERENCE WITH TRUSTEE RE SETTLEMENT AND .50 345 172.50

POTENTIAL TAX ISSUES AS PART OF PLAN OF LIQUIDATION

Page 287 of 356

154 08/17/16 MAM WORK ON SETTLEMENT OFFER TO EFP/BHT. 2.50 300 750.00

260 01/03/17 KB DOCUMENT REVIEW AND BEGIN DRAFT CERTIFICATE OF .40 155 62.00

MAILING AS TO PLAN AND RELATED PLEADINGS

Page 288 of 356

260 01/03/17 KB ORGANIZE AND PLAN EXHIBIT DOCUMENTS FOR ATTORNEY .10 155 15.50

REVIEW

275 01/27/17 MAM TELEPHONE CONFERENCE WITH THE TRUSTEE AND 2.30 350 805.00

CLEARSPRING RE: PLAN (1.00); WORK ON PLAN ISSUES

INCLUDING VOTES AND CONFIRMATION ISSUES (.7)

TELEPHONE CONFERENCE WITH MR. BARBER RE: SAME (.5);

Page 289 of 356

TELEPHONE CONFERENCE WITH MR. KIEFFER RE:

INDEMNIFICATION AGREEMENT