ROBERT G. MAYER, Bankruptcy Judge.
This case is before the court on the motion of H. Jason Gold for a stay pending appeal. Mr. Gold is the chapter 7 trustee in this case. He requested a trustee's fee of $17,254.61. The court allowed a trustee's fee in the reduced amount of $8,020.00 because Mr. Gold did not properly or timely complete his duties as trustee. 11 U.S.C. § 704(a)(1). Mr. Gold appealed to the district court asserting that he is entitled to the full trustee's fee requested because a trustee's fee is a fixed commission. 11 U.S.C. § 330(a)(7). Hopkins v. Asset Acceptance LLC (In re Salgado-Nava), 473 B.R. 911 (9th Cir. BAP 2012). The question presented here is whether a stay pending appeal should be granted so that Mr. Gold may withhold from distribution to creditors the additional amount he seeks as compensation while the appeal is pending. Fed.R.Bankr.Proc. 8005.
The applicant must meet a four-pronged test to obtain a stay pending appeal: (1) likelihood of success on the merits, (2) irreparable injury if the stay is not granted, (3) absence of substantial harm to the other parties from granting the stay, and (4) service to the public interest from granting the stay. Long v. Robinson, 432 F.2d 977, 979 (4th Cir.1970); Hunt v. Bankers Trust Co., 799 F.2d 1060, 1067 (5th Cir.1986); Commonwealth of Virginia v. Shenandoah Realty Partners, L.P. (In re Shenandoah Realty Partners, L.P.), 248 B.R. 505, 510 (W.D.Va.2000). See also Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008) and Blackwelder Furniture Co. of Statesville v. Seilig Manufacturing Co., 550 F.2d 189 (4th Cir.1977)
Likelihood of Success on the Merits. Mr. Gold's prospects for success on the merits are poor. His argument is one of entitlement, that the 2005 amendment to § 330(a)(7) of the Bankruptcy Code entitles him to a fee computed in accordance with § 326(a).
Id. at 921. It continues by matching the compensation to the trustee's duties under § 704:
Id. at 921.
Hopkins treats fees computed in accordance with § 326 as presumptively reasonable in consideration of the duties undertaken by chapter 7 trustees. However, extraordinary circumstances, which include not performing trustee duties, performing them negligently or inadequately, will result in a lesser fee.
In this case, the trustee did not properly discharge his duties. He did not administer the estate expeditiously and in a manner compatible to the best interests of the parties in interest. The trustee administered two properties. All estate receipts, with the exception of nominal interest paid by the bank on the estate funds, were rents or proceeds of sale from two properties. The trustee received the proceeds from the second sale on May 3, 2011. They were followed by two small trailing receipts from the settlements on May 25, 2011 and June 13, 2011, of $202.24 and $45.32, respectively. The trustee filed his final report on June 25, 2012, more than a year after receipt of the last trailing receipt. Nothing was done nor was there anything of substance to be done during that twelve-month period. Fourteen claims were filed, but distribution will be to three priority claims, one of which, a
Counsel for the trustee was unable to explain the delay in the administration of the case at the hearing on the trustee's final report and application for compensation. The time records of the trustee and his law firm do not cast any light on this either. The trustee's last time entry for work he performed was February 17, 2011. There were three time entries for his staff in May and June 2011 concerning receipt of the sales proceeds. The last time entry for the trustee's law firm was June 3, 2011, also relating to the last funds from the sale. The trustee simply put the case aside for a year and did nothing to bring it to a conclusion.
Creditors were injured by the trustee's delay. Creditors always prefer distributions earlier than later. Here, one of the three creditors who will receive a distribution is the debtor's former spouse. Congress made clear the importance of spousal claims in 2005 by altering the priority status and the ability to discharge spousal claims, and requiring special notice with respect to such claims. The remaining two distributions are to taxing authorities. Interest unnecessarily continued to accrue on the tax accounts on the amount that will be paid by the trustee, and the debtor will be required to pay it. Finally, during the period of delay, the trustee's bank charged the trustee $903.01 in fees.
The second issue is the trustee's supervision of the case. Two lawyers and one legal assistant expended 90.3 hours on the case as counsel to the trustee.
The trustee's fee in this case was reduced because of the trustee's failures in
In consideration of the foregoing, the court will grant a stay pending appeal effective upon posting an appeal bond.