On August 2, 2024, Justice Cohen of the New York County Commercial Division issued a decision in Law Off. of Mark S. Helweil v. Karambelas, 2024 NY Slip Op. 32693(U), holding that a receiver’s fees were capped by CPLR § 8004(a) despite s court order allowing payment at the receiver’s usual rate, explaining:
A receiver, except where otherwise prescribed by statute, is entitled to such commissions, not exceeding five per cent upon the sums received and disbursed by him, as the court by which he is appointed allows. The predecessor statute was construed not to entitle a receiver to rents of 5 per cent of sums received and disbursed by him as a matter of right, but only to such commissions not exceeding five per centum as the court in the exercise of its judgment may allow. Similarly, the CPLR provides a maximum allowable fee but the receiver must earn his fee and it is his burden to demonstrate that he has in fact earned it. The Court has discretion to fix a lesser commission as the facts and circumstances of any particular case indicate.
The sums received and disbursed by a receiver are typically the same amount, and where it is not, a commission is payable as a percentage of what the court decided was the value of the assets which came into the hands of the receiver, and which were disbursed or transferred by the receiver. Some courts have fixed amounts greater than the statutory maximum if the 5% allowable by statute would be manifestly unfair. A receiver is sometimes entitled to an allowance for the attorneys’ fees of outside counsel, but the Court must evaluate whether the attorneys’ fees are reasonable in light of the legal services rendered.
On June 25, 2021, this Court entered an order appointing Robert Abrams as Receiver, allowing Abrams to recover a commission which shall be based upon his usual and customary hourly billable rate for all services rendered in connection with all of his duties. . . .
The Court is constrained to apply CPLR § 8004(a). There are no extraordinary circumstances warranting a higher amount. Accordingly, Abrams himself cannot earn a commission of more than 5% of the $1.5 million he received and distributed, and his commission is capped at $75,000.00. The Court had previously exercised its discretion and ordered that he would be compensated in accordance with his usual and customary billable hour rate for all services rendered, though this must be subject to the statutory maximum. Therefore, given the complexity of the sale, the maximum allowable amount is appropriate in this circumstance.
Katsky Korins is also entitled to recover attorneys’ fees. Abrams correctly asserts Karambelas disputes no line item of either his billed hours nor of his counsel. The Court finds the requested rates for counsel to be reasonable. Thus, the total amount authorized to be distributed to the Receiver’s commission is $75,000.00. The total amount authorized to be distributed to Katsky Korins LLP is $23,231.07.
(Internal quotations and citations omitted).