GENERAL50193

• Permit No: M1977376
• IBM Index Class Name: General Documents
• Doc Name: NOTICE OF HEARING ON DEBTORS MOTION FOR AUTHORIZATION TO USE PROPERTY OF ESTATE OUTSIDE ORDINARY COU
• Media Type: D
• Archive: No

1418
BANKRUPTCY COURT DEO[S10NS
Cite as21 BCD 1 a17
of stxcific cotrn orders, 11 U.S.C. §§ 1107, 1108. However, if
in continuing the opeation of the business the debtor in possa-
stonseeks to emnlcy "professicnal persons," such employment
mus[ be apprcved by the cour_ 11 U.S.C. § 327(a) ("the
trust, with the cour.'s approval, may employ one of mote at-
torneys.... or other proiessionai pa: sons .. , w repraen[ or as-
sist the trustet in arrying out rte trustee's dudes under this
tide.'.' Hoe, we err called upon [o determine whether Ka-
wecki is a professional under I I ti.S.C. § 327(a).
The phrase "professional persons" is not defined in the
Bartlcuprcy Code. ~cweve:, in /n re Searrain Lines, Inc.. 13
BR. 980, 981 (Bttrtlc. S.D.N.Y. 1981), the coon defined pro-
fessional persons ;ts "persons in :hose occupations which play a
central role in the admtnistr4tion of the debtor proceeding." See
also In re Pacific ..°orest lndru.. Inc.. 95 BR. 740, 743 (Banlz.
C,D. Cal. 1989) ("[i;[ is only those who deal with the actual re-
organiztuon of the debtor (nthe: than the ongoing business of
the debwr) who are required to be employed under § 327 sad
whose applica[ietts for payment muse be approved by the
Court"); In re Jokrtr,~famille Carp., 60 HR. 612, 619 (Banlz.
S.D.Y.Y. 1986) ("the phrase 'professional persons,' az used in
§ 32i (a), is a term of an reserved far those persons who play an
innmare role in the reorganiztdon of a debtor's estate.'?
In Seatrain, t+ distinction waz made between the employ-
mem of p[ofessio:•tait who actually administer the estate and
those who serve mahanical functions necessary for a debtor's
opertions. 13 BR. a[ 981 ("persons in oaupatioro ordinarily
considered professions art: no[ necessarily professionals whose
re[ention by the esate requires court approval'. To distinguish
between administrative and mechanical functions, we must ex-
amine the actual dunes involved. If we ford "that [the dudes
have] a tangential relationship [o the adrtrinismation of the
[Debror's] estate .. "such duties ate notprofessional in panne.
Johns-+Nanville Corp., 60 BR. at 620 (where a debtor in pos-
session employed lawyers az lobbyists, the debrnr was sot te-
quired to seek court approval az such lobbyists were hired in dre
ordirary course of business and did not play an intimate role in
the reorganization cf a debtor's estate). On the other hand, if the
dudes involved am cent! to the adminisuation of the estate
such duties are professional in nature. Searrain, 13 BR at 981.
Such dudes would seem w include assisting in the negotiation
of the debtor's plan assisting in the adjustmen[ of the debwr!
creditor relationstcp. Cisposing of azsess of the estate and ac-
quirutgassess on d:half of [he estate. Johns-Manville Corp., 60
BR, ac 621.
Although Katvecki. az an environmental [oxicology con-
sultantwould appear to be a member of a profession, he is note
professional personas used in Section 327(x) of the Banhvptcy
Code. Kawecki is being h¢ed to [est watrr for contamination
due to an explosion in 1989. Notwirhsranding the fact that ICa-
wecki's reten[ion tray be necessary for the Debtor to comply
with Maryland law, Kawuki is not assisting the Debtor with its
plan, with [he sale or purchase of asses or with negotiating with
cr-.diton. Kawecki's tittles are no[ central to the reorgattization
process.
Although we find that Kawecki is no[ a professional per-
son under Sution .i:'~a) of the BaNaltptcy Code, the Debttn
may hire Kawe:ki in ;he ordinary course of business pursuant to
Section 1108 ei dte Bartlattptcy Cade without the prior ap-
proval of this court I1 U.S.C. § 1108 ("[ujnless the tour[, on
request of a pam• in interest and after notice and a hearing, or-
ders otherwise t:.e trustee may operate ttie debor's business'.
Section 1108 doer no[require persons employed in the ordinary
course m be "dutn[erested" az does Section 327(a). Hence the
fact that ICawecld holds a claim against [he Debtor's estate Por
52,3 i0 for srnics rendered prior to the Debtor's filing of iss
petition doer not preclude [he Debtor from retaining ICawecki
under Section 1108.
For the fat°_going reasons, the .application is denied but
the Debtor is pe-nixed [o hire Kawecki in [he ordinary course
of its business w mattimr the °roperty?
An apptnpr_[e order will be entered.
' 11 U.S.C. § I10 % gives the debtor in possession the rights and du-
ties ofthe uvsme.
s Some couru, ce•+iaring sGghdy from the Seatrain analysis. require
[her the person who :lays a cereal role in the adminiseation of the es-
tate also have "spcal knowledge and slag usually achieved try study
and educaCOnal acnmeno whether licensed err not" !n re :Nevopoli•
tan Norpital. 119 3 2.910.916 (Hanle. E.D. Pa. 1990), or have "du-
aedon or aurora-y N same pert of the debmr's amore" !n re
Frethe4n,102 B R.98,?99 (Barth. D.Cona 1989).
s Section 363(0)(1) allows a debwr in possession ro "use property of
the esrarn is the oresay course of bainesa without notice or a hear-
ing." 11 US.C. $ 363(c)(1). This allows a debtor is possession w "ea-
ereisereasonable jtd;men[ in catiyiug oo[ iu every day affairs and .. .
avoid euasive jaGcia! involvemen[ in its teorgarrizsuoa' !n re
D'Lita ofAmericx Inc.. 108 B.R. 352 355 (Barb. N.D. Ga. 1989).
Although the Baninn[cy Code doer give a debwr is possession sab•
scandal tletobiliry m r0n its btuiness, we rartind rrte Debtor thaz a
debtor in possession is a fiduciay W the estare.ln re Pacific Foust In-
dur., Lte., 95 B.R %:0.143 Ranh. CD. CaL 1989).
8t8l91 ®1391 LAP Publlcatlana