United States Court of Appeals Second Circuit.: No. 252. Docket 23469
United States Court of Appeals Second Circuit.: No. 252. Docket 23469
2d 811
These are appeals of Austin C. Glasser and Frederick Thompson from orders
granting them final allowances in a reorganization of Samson United
Corporation under Chapter X of the Bankruptcy Act, 11 U.S.C.A. 501 et seq.
Each appellant complains that the final allowance made to him provides
unreasonably low compensation for services rendered.
On the record we are unable to say that $12,000 is such small compensation for
this work as to be arbitrary or patently unfair. Appellant is an accountant. Until
the institution of this reorganization proceeding he was treasurer of the debtor
corporation. His annual salary was $10,000. The contested order provides
compensation for his work as trustee at a rate slightly less than what he was
earning at the time of his appointment. True, his responsibility as trustee was
larger than his responsibility as treasurer. Had the corporation itself promoted
him from treasurer to principal executive the promotion undoubtedly would
have been attended by some substantial increase in pay. But the appointment as
trustee was for the administration of an enterprise financially embarrassed to
the point of insolvency. Despite what appears to have been good management
of the reorganization and the completion of an advantageous plan of
reorganization, general creditors will receive somewhat less than half of the
amounts owed them.
Appellant Glasser makes one other point that is troublesome. He was one of
two co-trustees. Each was granted the same allowance, $12,000. This would be
improper if it were clearly established that on a quantum meruit basis one had
earned substantially more than the other. Coskery v. Roberts & Mander Corp.,
3 Cir., 1952, 200 F.2d 150.
In this case, appellant Glasser devoted many more hours to the business of the
reorganization than did his co-trustee. However, the co-trustee was an
experienced lawyer. Although the trustees had counsel, he brought the
advantage of his professional knowledge and skill to decisions,
recommendations and negotiations involved in the administration of the
reorganization. For example, one of the crucial matters confronting the trustees
was the negotiation for the reduction of a very large tax claim against the
debtor. Both trustees and their attorney devoted themselves to this problem. The
district judge was in a position to determine, and we are not, how important the
professional knowledge and judgment of the lawyer trustee were in
accomplishing a settlement of this obligation for some $600,000 less than had
originally been claimed. Many other matters arise in the normal course of a
reorganization where the professional ability and experience of a lawyer
serving as trustee are of great value not subject to precise calculation.
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Moreover, no appeal has been taken from the allowance to the co-trustee.
Perhaps, considering the matter in first instance, we would have given him
somewhat less and the appellant somewhat more. But the bases of judgment in
this case include imponderables which make it impossible to say that the trustee
who worked the greater number of hours must be given greater compensation.
For these reasons we will not disturb the allowance to appellant Glasser.
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