Ethics and Professional Compensation

Professional Malpractice Claims Based on Representation Rendered Pursuant to a Bankruptcy Petition Are Subject to Bankruptcy Court's Original but Not Exclusive Jurisdiction

In a per curiam decision, the Second Circuit recently joined other circuits in holding that “claims of professional malpractice based on services rendered pursuant to a bankruptcy petition are subject to the bankruptcy court’s original but not exclusive jurisdiction under Section 1334(b) of title 28.”[1] In 2001, Aston Baker (the debtor) filed a chapter 7 petition, then it was converted to a chapter 11 case.[2] The bankruptcy court appointed Charles Simpson and his law

N.M. Court Declines to Dismiss Cause of Action Personally against Lawyer Who Misstated the Identity of the Principal

In July 2010, the U.S. Bankruptcy Court for the District of New Mexico declined to dismiss a cause of action by a chapter 7 trustee against a lawyer who had submitted an offer from a third party to purchase estate property, leaving for trial whether the lawyer may be held personally liable on the contract. The opinion in Gonzales v.

The Forbidden Methods of "Real-Time Electronic Contact"

American Bar Association (ABA) Model Rule 7.3 prohibits a lawyer from soliciting professional employment in person, by live telephone or real-time electronic contact where pecuniary gain is a significant motive and the prospective client is not a lawyer and does not have a family, close personal or prior professional relationship with the lawyer.[1] Under the rule, where pecuniary gain is the motive and no relationship exists, Rule 7.3’s prohibition is an absolute, categorical ban based on method of contact, but what are these forbidd

Dismissed Involuntary Petition Filed in Bad Faith Subjects Creditor Firm to Sanctions

In today’s economic climate, it is not uncommon for law firms to encounter trouble collecting outstanding legal fees. Although not preferred, law firms may ultimately have no choice but to commence collection actions against former clients. It is uncommon, however, for law firms to commence involuntary bankruptcies against former clients to recover unpaid fees.

Avoiding Ethical Pitfalls in Flat Fee Arrangements - The D.C. Bar Legal Ethics Committee Weighs In

It is hard to open a law periodical these days without hearing about the shift from hourly billing to alternative fee arrangements such as flat fees. It may be premature to mourn the demise of the billable hour, but it is nevertheless imperative for lawyers to become familiar with the ethical pitfalls inherent in alternative billing arrangements.

New Decision Bars Debtor's Choice of Counsel Despite the Retention of Conflicts Counsel

In a recent decision in the chapter 11 case of Project Orange Associates LLC,[2] the court confronted an important issue that often arises in bankruptcy cases: whether the use of conflicts counsel is sufficient to permit court approval under § 327(a) of the Bankruptcy Code of a debtor’s choice for general bankruptcy counsel that also represents an important creditor of the debtor in unrelated matters. Here, the conflict involved the debtor's largest unsecured creditor and an essential supplier.

It's in the Contract: Allowance of Post-Petition Claims for Attorneys' Fees by Unsecured Creditors

Recent Second and Ninth Circuit opinions highlight the dispute over whether the Bankruptcy Code authorizes allowance of claims for post-petition legal fees incurred by unsecured creditors. Specifically, while not all circuits agree, in the wake of the 2007 U.S. Supreme Court decision, Travelers Casualty & Surety Co. of North America v. Pacific Gas & Electric Co., 549 U.S.

Caveat Creditor: Section 506(b) Limits Recoverable Fees, Costs and Charges

You have been hired to represent a secured lender in a bankruptcy case. Thankfully, the lender took a lien on collateral with a value greatly exceeding the amount of the debt, and the loan documents provide coverage for legal fees and expenses. It looks as though this gives you plenty of room to participate in this case and have your fees and expenses reimbursed out of the proceeds of the collateral.

Nondischargeability for Nondisclosure: The Perils of Attorneys Borrowing from Clients

In a nondischargeability action under 11 U.S.C. §523(a)(2)(A) against an attorney by his client, the Tenth Circuit Court of Appeals held that attorney Harold Riebesell could not discharge a loan made to him by his client in his chapter 7 case where he failed to disclose his perilous financial condition to his client. Johnson v. Riebesell (In re Riebesell), 586 F.3d 782, (C.A.10 2009). In In re Riebesell, Riebesell, a Colorado attorney, had a continuing attorney-client relationship with client W.A.

Swords to Plowshares: Let Us War No More

Cases—like seasons—come and go. What remains is the indelible mark left by the professional footprint of counsel. Long after the mediation is concluded, the plan confirmed, the jury discharged, the defendant sentenced, the loan closed, the adoption granted and file retired, there will remain both intended and unintended impressions and appreciations of the parties and their counsel.

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