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April 16, 2025

In Sub V, No Compensation for a Rehearing Motion Contrary to Circuit Authority

After the court had denied contract assumption, there was no compensation for keeping assumption alive pending appeal.

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Opinion Link

View Opinion

https://abi-opinions.s3.us-east-1.amazonaws.com/Pinnacle+re+fees.pdf

Case Details

Case Citation

In re Pinnacle Foods of California LLC, 24-11015 (Bankr. E.D. Cal. April 4, 2025)

Case Name

In re Pinnacle Foods of California LLC

Case Type

Business

Court

9th Circuit

California

California Eastern District

Bankruptcy Tags

Plan Confirmation

Professional Compensation/Fees

Business Reorganization

Small Business

Comments

Submitted by Steven Cowen on April 16, 2025

Perfect example of why it is very important to, to the fullest extent possible, forum shop. Taking a Subchapter V, where in the typical case DC only gets paid their hourly rate through the Plan 1-3 years after Petition Date (wo even interest), is often a very bad "business" decision to begin with. The Pinnacle Foods decision makes it even more difficult. Aren't lawyers ethically obligated to pursue meritorious appeals? In Sub V, in the Fresno district, you do so at huge risk.

Submitted by Charles King on April 16, 2025

Pursuing appeals where there is a clear circuit split to be resolved seems different from a hail-Mary appeal against controlling authority in hopes that the circuit court will change its mind. But on a practical level, in the face of the controlling circuit authority conversion was probably appropriate. The other option would have been to keep the case stumbling along for however many years the appeals took to go up the ladder, holding the franchisor hostage. But I'd think that would moot the appeal---the conversion bell can't be un-rung. Under those circumstances, it's tough to see how the appeal wasn't ultimately doomed as long as the franchisor objected.