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In re Pan American Hospital Corporation

312 B.R. 706 (2004)

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In re Pan American Hospital Corporation

United States Bankruptcy Court for the Southern District of Florida

312 B.R. 706 (2004)

Facts

Pan American Hospital Corporation and Pan American Medical Center, Inc. (Pan American) (debtors) were affiliated medical organizations. Both Pan American entities filed for bankruptcy, and the cases were jointly administered. Pan American filed an application with the bankruptcy court to employ attorneys from Kluger, Peretz, Kaplan & Berlin (Kluger) as bankruptcy counsel. Pan American sought court approval for two different risk-minimizing devices to secure payment for Kluger over the course of the bankruptcy. The first was a retainer that would remain in place throughout the bankruptcy proceedings. The retainer was meant to serve as security against Kluger’s final fee application. The second was a shortened fee-application period, reduced from 120 days to 60 days. The court approved both devices. The United States trustee objected to the retainer, arguing that the retainer was unnecessary to protect Kluger from the risk of nonpayment. The trustee argued that Kluger was sufficiently protected by the shortened fee-application period, and that Pan American needed access to the retainer funds to successfully pursue reorganization.

Rule of Law

Issue

Holding and Reasoning (Cristol, J.)

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