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Secured Cr. claiming high post petition atty's fees
Under the Meritor v. Salazar Test (82 B.R. 538) there are four elements under section 506(b) that must be met in order to recover attorney's fees when bringing a motion to lift the automatic stay (you'll have to see if this applies to other postpetition attorney fees which I believe it does): 1) it is an allowed secured claim; 2) the creditor is "oversecured"; 3) the fees are "reasonable" under the circumstances; and 4) the fees are provided for under the agreement.
The U.S. Supreme Court held in the Travelers v. PGE case (549 U.S. 443, 127) that nothing precluded an undersecured creditor from filing an unsecured claim for postpetition attorney fees.
The creditor might try to rely on US v. Ron Pair Enterprises to support its request for fees. However, that case, involves an "oversecured" creditor. Even if the creditor attorney fees are reasonable, an award of fees still does not meet the Meritor v. Salazar Test (82 B.R. 538) if the property is undersecured.
Link Schrader, Attorney
Law Office of Link W. Schrader
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Secured mortgage lender has filed a Notice of Postpetition mtg fees as a supplement to a prior POC, expenses etc seeking a high amount of post petition atty's fees.
As per 506(b), it is my understanding that they can only do this if their claim is 'over-secured'. Property herein is under-secured.
Would this be correct basis of an objection to the post-petition legal fees?
I know there was 9th Circuit case in 2009 allowing post petition atty's fees to Unsecured creditors, but not with respect to secured one.
Am I missing anything else?
Thank you.
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