PULSAR PUERTO RICO INC

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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF PUERTO RICO
In re: :
:
PULSAR PUERTO RICO, INC. : Case No. 08-07557 (GAC)
:
Debtor : Chapter 11
___________________________________:
:
DECISION AND ORDER
On June 16, 2009, debtor’s counsel, Pillsbury, Winthrop Shaw
Pittman LLP (“PWSP”) filed its first application for compensation,
seeking fees of $731,861 and expenses of $60,733.29 (dkt. #268).
The Court granted parties in interest twenty days to reply and
ordered the U.S. Trustee to make a recommendation in light of the
Court’s order at the hearing of November 24, 2008, in which the
Court approved the employment, but stated that no retainers nor
interim compensation will be allowed unless the Court orders
otherwise (dkt. #270). Eurobank filed an opposition based on the
fact that the terms and conditions of the employment specifically
indicated that PWSP had agreed to defer fees until a liquidity
event occurs (dkt. #279). Westernbank filed a motion joining
Eurobank’s opposition (dkt. #287). The U.S. Trustee filed a
position which includes substantive objections to the application
and sides with Eurobank, also arguing that PWSP is not entitled to
interim compensation, based on the terms and conditions under which
the application to employ was approved.
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PWSP filed an initial response to the objections indicating
that it is not seeking payment of its fees and expenses, only their
allowance (dkt. #293). PWSP indicates that it agreed to defer
payment of fees and expenses, not allowance. PWSP also argues that
this Court has overseen this case from the beginning and is better
equipped than any other court to determine the merits of its first
fee application.
Eurobank filed a reply to PWSP’s initial response contending
that PWSP did request payment of its fees in its application for
compensation and that if it is only seeking allowance of its fees,
it is asking the Court for an advisory opinion (dkt. #295).
Eurobank contends that no fees should be allowed until the single
asset real estate is sold. Eurobank filed a second limited reply
essentially stating the same thing (dkt. #296).
PWSP filed a first supplement to it first application for fees
(dkt. #300) amending the first fee application to strike all
statements regarding payment of their fees and expenses, to the
extent that the statements were interpreted as requests for payment
prior to the occurrence of the requisite liquidity event.
The Court concludes that PWSP did seek both allowance and
payment in its initial fee application. Likewise, the Court
concludes that allowance of PWSP’s fees at this stage of the
proceedings is premature and would be advisory, since the award and
payment of fees is predicated, to a great extent, on a liquidation
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event. Moreover, the Court is unable to determine the benefit to
the estate of incurring almost $700,000.00 in legal fees and
expenses, prior to a liquidation event. Moreover, the debtor is
currently seeking a second extension of the exclusivity period and
until the occurrence of a liquidation event, the Court is not in a
position to determine the reasonableness of the fees. Accordingly,
the application, as amended, will be denied without prejudice.
ORDER
WHEREFORE IT IS ORDERED that Pillsbury, Winthrop Shaw Pittman
LLP’s first application for compensation (dkt. #268), as amended by
the first supplement (dkt. #300) shall be, and it hereby is, DENIED
WITHOUT PREJUDICE.
SO ORDERED.
San Juan, Puerto Rico, this 5th day of August, 2009.
BY THE COURT:
s/ Gerardo A. Carlo
_______________________
GERARDO A. CARLO
U.S. Bankruptcy Judge
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