Court Rejects Lender’s Objection to Payment of Debtor’s Counsel’s Fees and Expenses from Pre-Petition Retainer

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In a decision rendered on December 30, 2016, the bankruptcy court for the Southern District of Florida (the “Court”) addressed the debtor’s counsel’s interim application for an award of fees and expenses for services rendered to the debtor and its bankruptcy estate, as well as a secured creditor’s objections to the same. The debtor’s counsel sought to apply a pre-petition retainer held in her firm’s trust account in payment of her fees and expenses. The debtor’s lender raised no objection to the amount of the request, but objected to the payment of any court-approved compensation using the retainer on the grounds that the retainer represented the bank’s cash collateral in which the bank maintained a superior interest. Therefore, the bank argued, it was entitled to adequate protection for the use of its funds.

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