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Judge Rodriquez of the U.S. Bankruptcy Court for the Southern District of Texas issued an opinion in December 2024 which reinforced the axiom that actions have consequences.[1]In re Garcia Grain Trading Corp. v. Plascencia.[2] Specifically, Judge Rodriquez determined that the bad faith of a defendant movant justified fee-shifting and directed the plaintiff’s counsel to submit a fee application for their related work, which remains under advisement.
Professionals seeking to be retained in bankruptcy cases understand the importance of disclosing and avoiding conflicts as a retention condition.[1] A recent unpublished decision by the United States Bankruptcy Court for the Northern District of Texas[2] highlights that even after a professional is retained in a bankruptcy case, professionals must closely monitor and disclose potential conflicts, as post-petition conflicts can result in a reduction or denial of fees.[
This panel discusses ethical concerns relating to employing professionals in bankruptcy matters, including disclosure obligations under ethics rules, the Bankruptcy Code and U.S. Trustee guidelines.
Recently, Hon. Christopher G. Bradley, sitting in the U.S. Bankruptcy Court for the Western District of Texas (Austin), explored the scope of the bankruptcy court’s oversight when a chapter 11 debtor in possession (DIP) needs to retain counsel to pursue its own interests separate from those of the bankruptcy estate.[1]
The first step you take as an attorney may be to bring in a new matter, but the essential second step is to ensure that the representation is proper.[1] Accordingly, it is important to understand the requirements of the Bankruptcy Code and other guidelines relating to disclosures, conflicts and, ultimately, retention.
This session will provide an overview of recent high-profile cases, including those of FTX, Kenneth Chesebro, Rudy Giuliani and Judge David R. Jones, and discuss the ethical issues raised, including the limits of advocacy, responsibility of the profession, duty of candor and truthfulness, prohibition on assisting in criminal activity, and the duty to report professional misconduct.
The Ethics and Professional Compensation Committee had another successful year in 2024. Our activities continued to keep our members and the insolvency community apprised of relevant recent developments and hot topics while also offering fun and beneficial social and networking opportunities.
This panel will consider ethical issues in real estate bankruptcies involving candor to the court as to out-of-court happenings, considerations for debtor’s counsel and advisors in parsing entity vs. guarantor, and other insider issues.
