Fighting Nazgul Trolls and Orcs Is Easy Disclosing Under Rule 2014 Is Hard Disclosing Connections and Relationships Under Current Bankruptcy Rule 2014 - Part II

Journal Issue

Apr 2003

Column Name

Journal HTML Content

Two years ago, I wrote an article on the proposed
"new" Rule 2014, which was to take effect in December 2001
("Disclosing Connections and Relationships Under Rule 2014," April
2001). As part of that article, I stated that a new bankruptcy bill would
probably become law (which was wrong), but did note that "while almost
all formally proposed amendments to the Bankruptcy Rules are ultimately
enacted, all bankruptcy attorneys remember the fate of the infamous
'litigation package' of Bankruptcy Rule amendments which were
withdrawn from consideration due to wide spread protest." In light of the
failure of the new version of 2014 to become a Rule and of some recent
important case law, revisiting Rule 2014 is once again a timely and important
topic.

<h3>What Are Connections Under Rule 2014?</h3>

Under <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
U.S.C. §327(a)</a>, in order to be employed as a professional by a bankruptcy
estate, the professional must not (1) "hold or represent an interest
adverse to the estate" and must (2) be "disinterested."<a href="#2" name="2a">2</a>
Attorneys employed as special counsel to the estate under <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
U.S.C. §327(e)</a> or professionals employed under <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
U.S.C. §§1103</a> and 1104 face less stringent requirements.<a href="#3" name="3a">3</a>

However, all professionals whose employment must be approved by the bankruptcy
court are required to make full disclosure under Rule 2014<a href="#4" name="4a">4</a> of their
connections.

Currently,
Rule 2014<a href="#5" name="5a">5</a> does not provide any useful limits on the disclosure of connections
related to <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
U.S.C. §327</a> employment issues. Courts have generally applied Rule 2014
broadly and have held that professionals have little discretion in determining
what is a relevant or material connection.<a href="#6" name="6a">6</a> Rule 2014 requires disclosure of
all of a professional's connections with (1) the debtor, (2) any
creditors, (3) other parties in interest, (4) the debtors, creditors and other
parties in interest's attorneys and/or accountants, and (5) the U.S.
Trustee and persons employed by the U.S. Trustee's office (collectively "2014
parties").<a href="#7" name="7a">7</a> Currently, courts have generally recognized three broad
categories of "connections"—financial, business and
personal<a href="#8" name="8a">8</a>—that must be disclosed pursuant to Rule 2014.<a href="#9" name="9a">9</a>

<h3>Financial Connections</h3>

Perhaps the most common form of connection that professionals must disclose are
financial connections the professional may have with 2014 parties. One of the
first decisions that discussed the need for professionals to fully disclose
financial connections was In re Arlan's Dept. Stores Inc.,<a href="#10" name="10a">10</a> where estate counsel was denied all compensation
after, among other things, failing to disclose that its $125,000 retainer was
paid by taking almost all of the cash receipts from the debtor's
department stores immediately before bankruptcy.<a href="#11" name="11a">11</a>

Increasingly,
courts have used Rule 2014 to require debtors' professionals to disclose
the sources<a href="#12" name="12a">12</a> of fee payments and/or retainers<a href="#13" name="13a">13</a> paid to the professionals. The
most important case concerning the degree of disclosure of financial
connections needed to comply with Rule 2014 is In re Park Helena Corp.<a href="#14" name="14a">14</a> In Park Helena, the debtor's counsel received a $150,000
retainer from the debtor's president. While counsel disclosed the
retainer, they did not disclose the actual source of the retainer until their
first fee application. At that time, debtor's counsel disclosed that the
retainer was paid by the debtor's president, but argued that it was part
of a repayment of a loan the debtor had made to the president prior to the
bankruptcy.<a href="#15" name="15a">15</a> The Ninth Circuit found that the debtor's counsel violated <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
U.S.C. §329</a> as well as Bankruptcy Rules 2014 and 2016.<a href="#16" name="16a">16</a> In
finding a violation of Rule 2014, the Ninth Circuit held that even if the
retainer was paid from the debtor's funds, and there was no conflict of
interest, the "failure to describe the circumstances of the
payment" was a violation of Rule 2014. The Ninth Circuit ultimately
denied all requested fees.<a href="#17" name="17a">17</a>

Two
recent cases, In re Big Rivers Electric Corp.<a href="#18" name="18a">18</a> and In re Maximus Computers Inc.,<a href="#19" name="19a">19</a> demonstrate the increasing importance courts are
putting on disclosure of fee and other financial arrangements. In Big
Rivers, the court denied all compensation
to an examiner and his law firm who worked on a highly successful chapter 11
case due to the examiner's failure to formally<a href="#20" name="20a">20</a> and timely disclose a
bonus fee enhancement from the unsecured creditors in the case. The Big
Rivers court stated: "The examiner
should have known that the act of soliciting the three largest unsecured creditors...was at least
an apparent conflict of interest with the examiner's obligation of
neutrality that should have been disclosed."<a href="#21" name="21a">21</a>

In
Maximus Computers, the court reversed
the lower court's approval of the employment of a law firm as <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
U.S.C. §327(e)</a> counsel for a trustee where the law firm failed
to disclose it was being employed and paid by a creditor, which the law firm
had previously represented against the debtor, at the same time it was being
employed by the bankruptcy estate. The majority remanded the case for further
consideration after suggesting the law firm could be compensated under <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
U.S.C. §503(b)(3)(B)</a> as making a substantial contribution to the
estate by its efforts.<a href="#22" name="22a">22</a>

<h3>Business Connections</h3>

Courts have also determined that a professional's business connections to 2014
parties (i.e., working for, representing
or having a financial interest with a 2014 party) are covered by Rule 2014.
Courts have held that representation of an entity that may be able to control
or influence a bankruptcy estate must be disclosed.<a href="#23" name="23a">23</a> Courts have also held
that pre-petition work, which in and of itself was adverse to the estate, must
also be disclosed.<a href="#24" name="24a">24</a>

The
two most famous cases involving failure to disclose business connections are U.S.
v. Gellene<a href="#25" name="25a">25</a> and In re Leslie Fay
Companies Inc.<a href="#26" name="26a">26</a> In Gellene, a bankruptcy attorney failed to disclose his
representation of a large secured creditor in a chapter 11 case in which his
firm was employed as debtor's counsel and was ultimately convicted of
making false oaths in a bankruptcy proceeding.<a href="#27" name="27a">27</a> The court found the failure to
disclose this connection made the 2014 disclosure false, notwithstanding Gellene's contentions that disclosure was not
necessary.<a href="#28" name="28a">28</a>

In
Leslie Fay, the debtor's counsel
was sanctioned for failing to disclose their pre-petition representation of
board members and the debtor's outside auditors, who could be sued by the
debtor.<a href="#29" name="29a">29</a> The court rejected the professional's contention that no such
disclosure was necessary because counsel's investigation disclosed
neither party would be liable to the debtor<a href="#30" name="30a">30</a> and imposed significant sanctions
on the professional.

A
recent case highlighting the importance of full disclosure is <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=2…
re Enron Corp., 2003 WL 223455 (S.D.N.Y. Feb.
3, 2003)</a>, where the district court affirmed the bankruptcy
court's denial of a motion to disqualify counsel for the unsecured
creditors committee in that massive case.<a href="#31" name="31a">31</a> The district court found that the
committee counsel made full and complete disclosures as required by Bankruptcy
Rule 2014 in their initial application and had frequently supplemented its
disclosures in a "meaningful, forthright, continuous and sufficiently
detailed" manner. The court found that the amount of detail demanded by the
objecting party was far beyond the scope of Rule 2014.

<h3>Personal Connections</h3>

The
final important category of connections, which courts are increasingly
requiring to be disclosed, are personal connections.<a href="#32" name="32a">32</a> Although the full range
of personal connections between professionals and 2014 parties, which must be
disclosed, has not been fully developed,<a href="#33" name="33a">33</a> three recent cases illustrate the
types of connections that need to be disclosed.

In
In re El San Juan Hotel Corp.,<a href="#34" name="34a">34</a> counsel
for a successor chapter 7 trustee was denied all fees due to his failure to
disclose (1) his retention in a separate bankruptcy case by the previous
trustee of the estate, who was ultimately convicted of embezzlement from the
bankruptcy estate, and (2) his close friendship with the attorney who served as
counsel to the previous trustee in litigation with the current trustee.<a href="#35" name="35a">35</a>

In
In re Bonneveille Pacific Corp.,<a href="#36" name="36a">36</a>
counsel for the unsecured creditors' committee resigned from the case
when it was discovered that an "of counsel" attorney with the
committee and counsel were married to an insider to one of the debtor's
subsidiaries.<a href="#37" name="37a">37</a> This connection had not been previously discovered or
disclosed.

Finally,
in the Merry-Go-Round<a href="#38" name="38a">38</a> case, the
accountant for a chapter 11 debtor was forced to settle a lawsuit against it
for $185 million. One of the reasons for the settlement was an allegation that
the accounting firm had concealed, from the debtor and the court, various
relationships, including personal relationships, that members of the accounting
firm had with the debtor's counsel, which allegedly led to the
debtor's bankruptcy not disclosing the accountants alleged malpractice in
the debtor's case.<a href="#39" name="39a">39</a>

<h3>Is There Such a Thing as a de Minimis Connection?</h3>

While
cases such as In re Park-Helena Corp.<a href="#40" name="40a">40</a>
and In re Crivello<a href="#41" name="41a">41</a> contain
sweeping dicta that all connections, no matter how de minimis, must be fully disclosed, the holdings of these cases
and other decisions addressing Rule 2014 clearly indicate that the
"missing" disclosures were, in most cases, material<a href="#42" name="42a">42</a> to a
determination of whether a professional could be employed. This was recognized
by the bankruptcy court in In re Rusty Jones,<a href="#43" name="43a">43</a> where the noted ownership of a hot dog stand 20
years ago by a professional and an owner of the debtor would be so de
minimis that they need not be disclosed.<a href="#44" name="44a">44</a>

The Rusty Jones court noted that
connections that are either related to the bankruptcy proceedings or could
"reasonably have an effect on the attorney's judgment in the
case" are the types of connections that must be disclosed.<a href="#45" name="45a">45</a>
Unfortunately, neither Rusty Jones nor any other decisions clearly define what connections could "reasonably
effect" an attorney's judgment or more importantly should be
brought to a court's attention.

<h3>How to Approach Rule 2014 Disclosures, or Frodo Baggins Had It Easy Approaching Mount Doom</h3>

As
can be seen from the foregoing discussion, Rule 2014 imposes a significant
burden on attorneys seeking to be employed by either the bankruptcy estate or a
committee without giving much guidance on how or what must be disclosed.
However, there are some steps that professionals can take to make this process
less treacherous.

In
order to comply with Rule 2014, professionals should take a four-step approach
to making the required Rule 2014 disclosures both in their employment
application and throughout the case. First, professionals should describe, in
detail, what steps they have taken in investigating their firm connections,
relationships and interests for purposes of the Rule 2014 disclosure. This
should include a statement that the firm is eligible for employment under the
appropriate provision of the Code. These steps in a particularly large case may
include a direct inquiry to a professional firm describing the debtor and the
2014 parties and asking if anyone has "connections" with the 2014
parties. A detailed discussion of the nature of the inquiry will greatly reduce
the possibility that a court will later determine that a professional
"did not look very hard" for possible conflicts, as well as give
the court, U.S. trustee's office and other interested parties an
opportunity to immediately explore other relevant areas, rather than wait until
late in the case, to second-guess a professional's choices in
investigating his firm's connections, relationships and interests.

Second,
professionals must disclose any connection, interest or relationship that they
may have with the debtor or any other party that could have some possible
impact on a court's determination of
whether the professional should be employed. If there is any doubt, disclose.<a href="#46" name="46a">46</a> At worst, you will not be employed. However, in
those circumstances when disclosure was clearly required, if the
non-disclosure is discovered, all or a significant portion of your fees will be
disallowed. At best, the issue will be fully and finally resolved before
expending a great deal of time and expense in the case.<a href="#47" name="47a">47</a>

Third,
professionals are advised to describe any particular interest, connection or
relationship in some detail. Boilerplate statements that "you represent
various creditors of the debtor in other non-related matters" is in some
respects worse than no disclosure as the court and other parties' view of
what is trivial, or unimportant representations, may vary greatly from the view
of the disclosing professionals. The detail given in a disclosure under 2014
must at least be sufficient to put the court and other parties on notice as to
what ethical issues may be involved in a particular connection or
relationship.<a href="#48" name="48a">48</a> In the recent Enron decision,
the district court agreed with this line of reasoning and held there was a
limit to the amount of detail required about connections, stating:

<blockquote>
The
bankruptcy court found that Exco would require Milbank to disclose information
beyond the requirements of Rule 2014, such as every possible consequence
resulting from Milbank's connections, as well as a prediction as to the
outcome of any possible litigation that may relate to its connections. This
court agrees with the bankruptcy court that such disclosures are beyond the
scope of Rule 2014 and that Milbank's disclosures complied with Rule
2014.
</blockquote>

<a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=2…
WL 223455</a> at *6.

Finally,
a professional must update, as needed, his 2014 disclosures as the facts of the
case and the professional's business change. As noted in the Enron decision, "meaningful, forthright, continuous
and sufficiently detailed" supplements to Rule 2014 disclosures will be
well received by, if not required by, a bankruptcy court.

<h3>Conclusion</h3>

The
failure of proposed Rule 2014 to become an official Bankruptcy Rule is clearly
a blow to bankruptcy practitioners who are looking for some guidance as to the
outer limits of what connections need to be disclosed in an application for
employment under the Bankruptcy Code. However, short of either binding case
law, a new national Bankruptcy Rule or local rules addressing what disclosure
is necessary under Rule 2014, law firms will be faced, like the vertically
challenged hero of The Lord of the Rings Trilogy, with a long, hard and uncertain journey to an uncertain goal. However,
unlike our Hobbit friend, we currently do not have clear instructions as to how
to reach that goal.

<hr>
<h3>Footnotes</h3>

<a name="1">1</a> Board-certified
in business bankruptcy by the American Board of Certification. <a href="#1a">Return to article</a>

<a name="2">2</a> See <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
U.S.C. §101(14)</a> (definitions of disinterested person). <a href="#2a">Return to article</a>

<a name="3">3</a> See <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
U.S.C. §§327(e), 1103</a> and 1104. <a href="#3a">Return to article</a>

<a name="4">4</a> While
Rule 2014 implicitly contemplates that disclosures will be supplemented if
needed during the case (see <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=2…
re Granite Partners LP, 219 B.R. 22 (Bankr.
S.D.N.Y. 1998)</a>), Rule 2016(b) has an express duty to supplement
disclosures concerning compensation. See <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=2…,
Jones & Leta PC v. Segal, 220 B.R. 434 (D.
Utah 1998)</a>. <a href="#4a">Return to article</a>

<a name="5">5</a> Rule 2014. Employment of Professional Persons

<blockquote>
(a) Application for an order of employment:
An order approving the employment of attorneys, accountants, appraisers,
auctioneers, agents or other professionals pursuant to §327, 1103 or 1114
of the Code shall be made only on application of the trustee or committee. The
application shall be filed and, unless the case is a chapter 9 municipality
case, a copy of the application shall be transmitted by the applicant to the
U.S. Trustee. The application shall state the specific facts showing the
necessity for the employment, the name of the person to be employed, the
reasons for the selection, the professional services to be rendered, any
proposed arrangement for compensation and, to the best of the applicant's
knowledge, all of the person's connections with the debtor, creditors,
any other party in interest, their respective attorneys and accountants, the
U.S. Trustee or any person employed in the office of the U.S. Trustee. The
application shall be accompanied by a verified statement of the person to be
employed setting forth the person's connections with the debtor,
creditors, any other party in interest, their respective attorneys and
accountants, the U.S. Trustee or any person employed in the office of the U.S.
Trustee. <a href="#5a">Return to article</a>
</blockquote>

<a name="6">6</a> See,
generally, <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
re Crivello, 134 F.3d 831 (7th Cir. 1998)</a>;

<a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=6…
re Park-Helena Corp., 63 F.3d 877 (9th Cir.
1995)</a>; <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
v. Braunstein, 19 F.3d 54 (1st Cir. 1994)</a>. <a href="#6a">Return to article</a>

<a name="7">7</a> For
an excellent discussion of the scope of disclosure required of professionals
seeking approval of their employment by a bankruptcy court, see Rapaport, Nancy B., "Avoiding Judicial Wrath:
The Ten Commandments for Bankruptcy Practitioners," 5 J. Bankr. L. &

P. 615 (1996) [hereinafter "10 Commandments"]. <a href="#7a">Return to article</a>

<a name="8">8</a> These
categories are solely the creation of the author, and there is a great deal of
overlap between each group. Further, there are some connections that fall
outside these categories. See <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=2…
v. First NH Mortgage Corp., 200 F.3d 30, 37
(1st Cir. 1999)</a> (professional failed to disclose that it has a
possible conflict of interest under state code of professional conduct). <a href="#8a">Return to article</a>

<a name="9">9</a> See "10 Commandments" at 619-622. <a href="#9a">Return to article</a>

<a name="10">10</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=6…
F.2d 925. (2d Cir. 1979)</a>. <a href="#10a">Return to article</a>

(debtor's attorney took all of debtor's funds for retainer, which
allowed debtor's cattle herd to starve). <a href="#11a">Return to article</a>

<a name="12">12</a> See
<a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=6…
re Park Helena Corp., 63 F.3d 877 (9th Cir.
1995)</a>; <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=2…
re Smitty's Truck Stop Inc., 210 B.R. 844
(B.A.P. 10th Cir. 1997)</a>. <a href="#12a">Return to article</a>

<a name="13">13</a> See
<a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
re Downs, 103 F.3d 472, 478 (6th Cir. 1996)</a>. <a href="#13a">Return to article</a>

<a name="14">14</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=6…
F.3d 877</a>. <a href="#14a">Return to article</a>

<a name="15">15</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=6…; at 881</a>. <a href="#15a">Return to article</a>

<a name="16">16</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=6…; at 882</a>. <a href="#16a">Return to article</a>

<a name="17">17</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=6…; <a href="#17a">Return to article</a>

<a name="18">18</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=2…
B.R. 580 (W.D. Ky. 2002)</a>. <a href="#18a">Return to article</a>

<a name="19">19</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=2…
B.R. 189 (9th Cir. BAP 2002)</a>. <a href="#19a">Return to article</a>

<a name="20">20</a> In
the case, the examiner argued that during a private meeting with the bankruptcy
judge (which had been authorized by the order appointing the trustee to permit
the trustee to disclose in camera the results of aspects of his investigation
of the debtor), he disclosed his actions related to seeking a bonus payment
from the unsecured creditors. The district court found that this alleged
disclosure was inadequate and a violation of the terms of his appointment
order. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=2…
B.R. at 599-600</a>. <a href="#20a">Return to article</a>

<a name="21">21</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=2…
B.R. at 599</a>. <a href="#21a">Return to article</a>

<a name="22">22</a> The
BAP's decision to reverse the order on employment shows the seriousness
with which courts are reviewing these matters in that the court noted in its
opinion that by accepting the trustee's allegations as true, "this
appeal smacks of a 'strategic' effort by the defendants to divert
attention from the merits of the allegations they stole about $7 million by
looting a corporation." <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=2…
B.R. at 189</a>. <a href="#22a">Return to article</a>

<a name="23">23</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
re Crivello, 134 F.3d 831 (7th Cir. 1998)</a>;
<a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
re EWC Inc., 138 B.R. 276 (Bankr. W.D. Okla.
1992)</a>. <a href="#23a">Return to article</a>

<a name="24">24</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=2…
re Southern Kitchens Inc., 216 B.R. 819 (Bankr.
D. Minn. 1998)</a>; <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
re Amdura Corp., 139 B.R. 963 (Bankr. D. Colo.
1992)</a>. <a href="#24a">Return to article</a>

<a name="25">25</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
F.3d 578 (7th Cir. 1999)</a>. <a href="#25a">Return to article</a>

<a name="26">26</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
B.R. 525 (Bankr. S.D.N.Y. 1994)</a>. <a href="#26a">Return to article</a>

<a name="27">27</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
F.3d at 585</a>. <a href="#27a">Return to article</a>

<a name="28">28</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…; at 591-93</a>. <a href="#28a">Return to article</a>

<a name="29">29</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
B.R. at 553</a>. <a href="#29a">Return to article</a>

<a name="30">30</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…; <a href="#30a">Return to article</a>

<a name="31">31</a> The
bankruptcy court's unpublished decision was fully and expertly discussed
by Michael Richman, a contributing editor of Straight & Narrow, in his
article "Mega Case Conflict Issues: Enron Committee Counsel," which
appeared in the September 2002 issue of the ABI Journal and will not be addressed here. <a href="#31a">Return to article</a>

<a name="32">32</a> See
<a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
re Neuman, 138 B.R. 683-685 (S.D.N.Y. 1992)</a>
(noting that special counsel employed under 11 U.S.C. §327(e) properly
disclosed that the individual debtor was a cousin of a partner in the law
firm). <a href="#32a">Return to article</a>

<a name="33">33</a> See,
generally, <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=2…
re Bennett Funding Group Inc., 226 B.R. 331
(Bankr. N.D.N.Y. 1998)</a> (requiring disclosure of details of
clients of accounting firms for which the trustee provided regulatory and
legislative advice); <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
re Cody, 122 B.R. 520 (Bankr. N.D. Ohio 1990)</a>

(failure to disclose that the attorney shared office space with
creditors' attorney). <a href="#33a">Return to article</a>

<a name="34">34</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=2…
B.R. 635 (1st Cir. B.A.P. 1999)</a>. <a href="#34a">Return to article</a>

<a name="35">35</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=2…; at 639</a>. <a href="#35a">Return to article</a>

<a name="36">36</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
B.R. 868 (Bankr. D. Utah 1996)</a>. <a href="#36a">Return to article</a>

<a name="37">37</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…; at 879</a>. <a href="#37a">Return to article</a>

<a name="38">38</a> See,
generally, <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=2…
re Merry-Go-Round Enterprises Inc., 222 B.R.
254 (D. Md. 1998)</a>. <a href="#38a">Return to article</a>

<a name="39">39</a> See "Ernst Pact Spells Caution in
Bankruptcy," New York L.J. (May 6, 1999); "$185 Million Suit by
Former Client Could Probe Bounds of Bankruptcy Law and Legal Ethics," Legal
Times (March 20, 2000). <a href="#39a">Return to article</a>

<a name="40">40</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=6…
F.3d 877 (9th Cir. 1995)</a>. <a href="#40a">Return to article</a>

<a name="41">41</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
F.3d 831 (7th Cir. 1998)</a>. <a href="#41a">Return to article</a>

<a name="42">42</a> See,
generally, "10 Commandments" at
619-622. <a href="#42a">Return to article</a>

<a name="43">43</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
B.R. 321 (Bankr. N.D. Ill. 1991)</a>. <a href="#43a">Return to article</a>

<a name="44">44</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…; at 346</a>. <a href="#44a">Return to article</a>

<a name="45">45</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…; <a href="#45a">Return to article</a>

<a name="46">46</a> "10
Commandments" at 619-622. <a href="#46a">Return to article</a>

<a name="47">47</a> Keeping
with my running movie theme, just think how much better off the Lord of the
Rings: The Fellowship of the Ring would
have been if Gandalf had disclosed what he knew about the Mines of Morida
before they entered into them. <a href="#47a">Return to article</a>

<a name="48">48</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
re Crivello, 134 F.3d at 831</a>; <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=6…
re Park Helena Corp., 63 F.3d at 877</a>. <a href="#48a">Return to article</a>

Journal Authors

C. R. Bowles

Journal Date

Tuesday, April 1, 2003 - 12:00

Bankruptcy Rule

2003