NORTH SPORTS v. KNUPFER
The Ninth Circuit Court of Appeals today released an opinion in NORTH SPORTS v. KNUPFER, No. 05-56254, a bankruptcy appeal. The panel consisted of Cynthia Holcomb Hall and Consuelo M. Callahan, Circuit Judges, and Lyle E. Strom, Senior District Judge.
HALL, Circuit Judge:
Pursuant to Bankruptcy Code Section 503(b)(4), Appellant creditors petitioned the bankruptcy court to recover legal fees incurred in connection with filing an involuntary Chapter 7 petition against the debtor. The bankruptcy court denied the fees, but the Bankruptcy Appellate Panel of the Ninth Circuit (”BAP”) reversed. It granted the creditors’ attorneys compensation for their services in connection with the involuntary petition, though it denied them compensation for their work in appealing the bankruptcy court’s denial of a fee award. The creditors have appealed, arguing that Section 503(b)(4) entitles them to attorney fees for the successful appeal of the lower court’s decision. We agree. 28 U.S.C. § 158(d) grants us jurisdiction to hear this appeal. We REVERSE the BAP’s denial of the fee award and REMAND to the BAP to award reasonable compensation in accordance with the statute. FACTUAL BACKGROUND AND PROCEDURAL HISTORY2 In December 1999, Salomon North America, Inc., North Sports, Inc., and NITRO (collectively the “Petitioning Creditors”) filed an involuntary Chapter 7 petition against the debtor, Wind N’ Wave. An Order for Relief was entered by the Bankruptcy Court in March of the next year, and a Trustee was appointed. In April 2000, the attorneys for the Petitioning Creditors, the Law Offices of David Bloom, filed an applicaUnless otherwise noted, all chapter and section references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1330. For a more in-depth discussion of the facts of this litigation, see the BAP’s decision, In Re: Wind N’ Wave, 328 B.R. 176, 177-79 (9th Cir. BAP 2005). . . .