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In re Bodenheimer, Jones, Szwak, & Winchell L.L.P.

Because the bankruptcy court failed to consider how the provided services and expenses met the terms of 11 U.S.C. �543(a) and benefitted the bankruptcy estate when determining whether they qualified as an administrative expense, the court committed legal error in approving the settlement. 5th U.S. Circuit Court of Appeals, No. 09-30360, 12-29-2009

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Published opinion

Before REAVLEY, CLEMENT, and SOUTHWICK, Circuit Judges.

Appellant David Szwak appeals the district court’s order affirming the bankruptcy award to Appellee Dale Earwood of $45,227.53 for his services and expenses as a state-law liquidator and later as a federally superseded custodian of a now-bankrupt law firm. Because the bankruptcy court failed to consider how Earwood’s services and expenses met the terms of 11 U.S.C. § 543(a) and benefitted the bankruptcy estate when determining whether they qualified as an administrative expense, we hold the award to be error and an abuse of the bankruptcy court’s discretion. Accordingly, we REVERSE and REMAND for further proceedings.

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