Application for Retention of Accountants — In re Central Texas Medical Specialists, PLLC
Summary
An Application for Retention of Accountants Pursuant to 11 U.S.C. § 327(a) and § 328, filed April 22, 2024 as Doc#45 in In re Central Texas Medical Specialists, PLLC, Case No. 24-10011-smr, in the United States Bankruptcy Court for the Western District of Texas, Austin Division. Chapter 7 Trustee Randolph N. Osherow asks to retain Whitley Penn LLP to prepare the estate's tax returns and to submit and prosecute an Employee Retention Credit Claim, which the Trustee states could bring as much as $2,279,823.00 into the Estate. Under the Employee Retention Credit Contract the Accountants would receive $182,400.00 for a full recovery, or up to 8% of a smaller one. The Trustee also seeks interim compensation procedures and authority to pay estate taxes.
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“Application for Retention of Accountants — In re Central Texas Medical Specialists, PLLC.”
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, SHA-256 8092b15e5bdb4690035801a67ea16bc64e751cb9fe6031dbad048aebaa30f1ec.Full text
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UNITED STATES BANKRUPTCY COURT
WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION
In Re: § Chapter 7
§
CENTRAL TEXAS MEDICAL § Case No. 24-10011-smr
SPECIALISTS, PLLC, §
§
Debtor. §
APPLICATION FOR RETENTION OF ACCOUNTANTS PURSUANT TO
11 U.S.C. § 327(a) AND § 328 AND FOR RELATED RELIEF
This pleading requests relief that may be adverse to your interests.
If no timely response is filed within 21 days from the date of service, the relief
requested herein may be granted without a hearing being held.
A timely response is necessary for a hearing to be held.
TO THE HONORABLE SHAD M. ROBINSON, U.S. BANKRUPTCY JUDGE:
COMES NOW Randolph N. Osherow, Trustee, the duly appointed and acting trustee in
the above-captioned bankruptcy case, and files this his Application for Retention of Accountants
Pursuant to 11 U.S.C. §327(a) and §328 and for Related Relief (the “Application”), and in support
thereof would respectfully show the Court as follows:
I. SUMMARY
1. The Trustee was appointed Chapter 7 trustee in the above-styled and numbered case
(the “Bankruptcy Case”). The Trustee herein requests to authority to retain Whitley Penn LLP (the
“Accountants”) to be his accountant pursuant to 11 U.S.C. § 327(a) and §328, in particular to
prepare tax returns for the bankruptcy estate and to submit and prosecute an Employee Retention
Credit claim (the “Employee Retention Credit Claim”), for authority under 11 U.S.C. § 503(b) to
pay any taxes that may be due as a result of any filed tax returns, and for authority to utilize interim
compensation procedures with respect to Accountants. The employment will be bifurcated into
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an hourly fee component and a success/contingency fee component based on two distinct scopes
of work.
II. BACKGROUND AND REQUEST FOR RELIEF
1. On January 3, 2024 (the “Petition Date”), this case was filed under Chapter 7 of
title 11 of the United States Code and the Trustee appointed as Chapter 7 trustee.
2. Included in the Estate is the Employee Retention Credit Claim. Based upon initial
estimates, the Trustee has reason to believe that the Employee Retention Credit Claim could result
in as much as $2,279,823.00 coming into the Estate.
3. The Trustee seeks to employ Whitley Penn LLP (the “Accountants”) pursuant to
11 U.S.C. §§ 327(a) and 328 as his certified public accountants to prepare tax returns for the
bankruptcy estate (the “Estate”), to submit and prosecute the Employee Retention Credit Claim,
and to handle any accounting issues that may arise during this case, including but not limited to
preparation of tax returns. The Trustee further requests that he be authorized under 11 U.S.C. §
331 to utilize interim compensation procedures with respect to Accountants.
4. It is in the best interest of the Estate that the Accountants be employed to advise the
Trustee regarding accounting matters affecting the Estate, to prepare all necessary income tax
returns for the Estate and to submit and prosecute the Employee Retention Credit Claim.
5. Prior to the filing of this Bankruptcy Case, Accountants handled preparing tax
returns for the Debtor. Debtor paid Accountants a retainer of $19,025.00 to be applied to work
done by Accountants. Prior to the Petition Date, Accountants applied $16,775.00 of that retainer
to amounts owed them by Debtor; thus, Accountant remains in possession of $2,250.00 (the
“Bankruptcy Retainer”). As part of the retention of Accountants, the Trustee proposes that
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Accountants remain in possession of the Bankruptcy Retainer, with the same to be applied to
amounts accruing post-Petition Date.
6. The Accountants represent no interest adverse to the Bankruptcy Estate. Attached
hereto as Exhibit 1 and Exhibit 2, respectively, are the Disclosure of Compensation under 11
U.S.C. §329 and Bankruptcy Rule 2016(b) and the declaration of Jon Karp that the Accountants
have no interest adverse to the Bankruptcy Estate.
7. No other professionals in the same profession have been previously employed
pursuant to Court order in this case.
8. The Accountants will be compensated pursuant to the employment contracts
attached hereto as Exhibit 3 (the “Tax Return and General Work Contract”) and Exhibit 4 (the
“Employee Retention Credit Contract”). Under the Tax Return and General Work Contract,
Accountants will charge their normal hourly rates for preparing tax returns and handling any other
matters for the Estate not specifically governed by the Employee Retention Credit Contract. The
hourly rates charged are as follows: Senior Manager is $425.00, Senior Associate is $290.00, and
Associate is $225.00. The Accountants will also be entitled to reimbursement for reasonable and
necessary out-of-pocket expenses. Under the Employee Retention Credit Contract, the
Accountants will receive $182,400.00 if they successfully recover for the Estate $2,279,823.00 in
the form of an Employee Retention Credit Claim, or up to but not exceeding 8% in the event that
the amount recovered on the Employee Retention Credit Claim is less than $2,279,823.00.
Accountants’ compensation for work done under the Employee Retention Credit contract will be
under section 328 of the Bankruptcy Code.
9. The Bankruptcy Estate has substantial unencumbered cash on hand. In order to
facilitate timely payment of invoices from Accountants without the cost of preparing potentially
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numerous interim fee applications, the Trustee proposes that he be authorized to make interim
payment of such interim invoices as Accountants may provide him by filing a Notice of Interim
Accountant Fees on the Court’s docket in substantially the form submitted herewith as Exhibit 5.
Pursuant to this proposal by the Trustee, if no response to a Notice of Interim Accountant Fees is
filed with the Court or served on the Trustee within twenty-one days of the filing of such Notice
of Interim Accountant Fees, the Trustee shall be deemed to be authorized to make the interim
payment provided for in the Notice of Interim Accountant Fees. Any such payments shall remain
subject to disgorgement and shall not excuse Accountants from the requirement of obtaining final
approval for their fees pursuant to 11 U.S.C. § 330.
10. No final compensation will be allowed or paid until a fee application has been filed
and approved by the Court, pursuant to 11 U.S.C. §330 and the requirements of any other
applicable case law.
4. Pursuant to 11 U.S.C. §503(b), the Trustee requests permission from the Court
authorizing and approving the payment of any Estate taxes that may be due as a result of any filed
tax returns.
5. The Accountants have their offices 8343 Douglas Avenue, Suite 400, Dallas, Texas
75225, telephone number 469.776.3558, fax 214.363.9303.
WHEREFORE, Randolph N. Osherow, Chapter 7 Trustee, prays that he be authorized to
retain certified public accounts Whitley Penn, PLLC as his accountants in the above Chapter 7
proceeding, and for such other relief as is just.
Respectfully submitted,
[SIGNATURE BLOCK ON FOLLOWING PAGE]
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GRAVES, DOUGHERTY, HEARON & MOODY, P.C.
401 Congress Avenue, Suite 2700
Austin, TX 78701
Telephone: 512.480.5626
Facsimile: 512.536.9926
bcumings@gdhm.com
By:/s/ Brian T. Cumings
Brian T. Cumings
State Bar No. 24082882
COUNSEL FOR RANDOLPH N. OSHEROW,
CHAPTER 7 TRUSTEE
CERTIFICATE OF SERVICE
I hereby certify that on this the 22nd day of April, 2024, I electronically filed this Application with
the Clerk of Court using the CM/ECF system which will send notification of such filing to those
receiving electronic service, or service was made by email as reflected below. The attached Notice
of Employment is being served within two business days as reflected on the Service List appended
to this Application.
Office of the United States Trustee Randolph N. Osherow, Chapter 7 Trustee
615 E. Houston ST., Suite 533 342 West Woodlawn, Suite 100
San Antonio, TX 78295-1601 San Antonio, TX 78212
Central Texas Medical Specialists, PLLC Mark Taylor
9715 Burnet Rd. Holland & Knight LLP
Building 7, Suite 200 100 Congress Ave.
Austin, TX 78758 Suite 1800
Debtor Austin, TX 78701
Debtor’s Counsel
Whitley Penn, LLP
c/o Kevin McGowan
8343 Douglas Avenue, Suite 400
Dallas, Texas 7522
By:/s/ Brian T. Cumings
Brian T. Cumings
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