Ethics: Disclosure and Disinterestedness; Carve-outs; Disgorgement of Professional Fees; Rules of Professional Conduct
by Richard M. Meth
Day Pitney LLP,
Florham Park, N.J.
Jeffrey L. Tarkenton
Womble Carlyle Sandridge & Rice, PLLC;
Washington, D.C.
Case law continues to address issues dealing with the consequences of retained professionals not being “disinterested” or otherwise failing to satisfy all of the requirements of applicable Bankruptcy Code provisions. One of the most recent decisions in this area includes: In re Baron’s Stores, Inc., 2007 WL 1120296 (Bankr. S.D. Fla., April 12, 2007)
The debtor, i.e., Baron’s Stores, Inc., filed a chapter 11 petition and retained Sonya Salkin, Esq. as its counsel. Prior to the debtor’s bankruptcy filing, Ronald C. Kopplow, Esq., of Kopplow & Flynn, P.A., and Marc Cooper, Esq., of Cooper & Wolfe, P.A., served as counsel for the debtor in a state court lawsuit seeking to recover damages for professional malpractice against its former accounting firm. Id. at *. After filing for bankruptcy relief, the debtor retained Kopplow and Cooper as its special counsel, on a contingent fee basis, to continue the malpractice case. Post-confirmation of Baron’s bankruptcy case, and three months prior to entry of the final decree closing the debtor’s case, the Lansons, who were officers of the debtor and its sole shareholders, and Baron’s (collectively the “claimants”), (filed a legal malpractice action against Kopplow, Cooper and, later, Salkin in Florida state court, in which they contended that Salkin, Kopplow and Cooper (collectively the “attorneys”) had perpetrated a fraud on the bankruptcy court with respect to their applications to be retained as general and special counsel, respectively.
Read the full outline. (Materials from "Views from the Bench 2007")
Choose Me! Ethical Considerations in Solicitation of Creditor Committee Engagements
by Kelly Beaudin Stapleton
U. S. Trustee for Region 3;
Philadelphia
Edward T. Gavin, CTP
NachmanHaysBrownstein, Inc.;
Wilmington, Del.
Mark A. Gittelman
PNC Bank, N.A.;
Philadelphia
Steven K. Kortanek
Womble Carlyle Sandridge & Rice, PLLC;
Wilmington, Del.
Lawrence E. Oscar, Esq.
Hahn Loeser & Parks LLP;
Cleveland
Norman L. Pernick, Esq.
Saul Ewing LLP;
Wilmington, Del.
Kenneth A. Rosen, Esq.
Lowenstein Sandler;
Roseland, N.J.
A chapter 11 case is filed, and the debtor identifies its 20 largest unsecured creditors. Prior to the meeting to form the official committee of unsecured creditors (and, by extension, any committee appointment), a financial advisor that is not representing any parties in interest and is otherwise unconnected with the case contacts creditors identified on the “top 20 ” list to see if they wish to participate on a conference call prior to the formation meeting to discuss the case. The financial advisor makes this contact with the intent of building a relationship with creditors and (hopefully) being selected as the financial advisor for the to-be-formed committee.
Read the full outline. (Materials from 2007 Mid-Atlantic Bankruptcy Workshop)