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2006 NORTON BANKRUPTCY LAW SEMINAR MATERIALS

THE ETHICS OF REPRESENTING DEBTORS AND CREDITORS IN BANKRUPTCY

By Susan M. Freeman

*This outline is adapted from Chapter 27, Ethical Responsibilities,
Norton Bankruptcy Law & Practice 2d (Thomson-West 2005)

 

Sealy Mattress Mfg. Co. v. Kaplan, 90 F.R.D. 21 (N.D. Ill. 1980).

489 In re Madison Management Group, Inc., 212 B.R. 894 (Bankr. N.D. Ill. 1997).

490Model Rule 2.2(a).

491Model Rule 2.2 Official Comment.

492 See Model Rule 3.1 (lawyer shall not bring or defend any action or assert or controvert an issue without nonfrivolous basis for doing so including good faith argument for any position contrary to existing law); Model Rule 3.2 (make reasonable efforts to expedite litigation consistent with client interests); Model Rule 3.3 (lawyer shall not knowingly make false statement of material or fact or law, fail to disclose material fact except as required by law, or fail to disclose legal authority in controlling jurisdiction); Model Rule 3.4 (lawyer shall not willfully obstruct another party's access to evidence; make a frivolous discovery request or fail to make reasonably diligent efforts to comply with proper discovery, allude to irrelevant material at trial, or obstruct others from giving relevant information to another party in most cases).

493 But see Regensteiner Printing Co. v. Graphic Color Corp., 142 B.R. 815 (N.D. Ill. 1992)(bankruptcy court lacks jurisdiction to impose sanctions under § 1927 since it is not a "court of the United States").

494 See In re TCI Ltd., 769 F.2d 441 (7th Cir. 1985)(discussing Rule 9011 and 28 U.S.C. § 1927.

495 In re Start the Engines, Inc., 219 B.R. 264 (Bankr. C.D. Cal. 1998); In re Powers, 135 B.R. 980 (Bankr. C.D. Cal. 1991); Midwest Properties No. 2 The Big Hill Investment Company, 93 B.R. 357, 36263 (N.D. Tex. 1988); In re Cohoes Industrial Terminal, Inc., 103 B.R. 480 (Bankr. S.D.N.Y. 1989), on

rehearing, 105 B.R. 243 (Bankr. S.D.N.Y. 1989); In re Little Creek Development Company, 779 F.2d

1068, 1073 (5th Cir. 1986); Matter of King, 83 B.R. 843, 847848 (Bankr. N.D. Ga. 1988).

496 In re Computer Dynamics, Inc., 252 B.R. 50 (Bankr. E.D. Va. 1997); In re Tarasi & Tighe, 88 B.R. 706, 70809 (Bankr. W.D. Pa. 1988); In re General Homes Corp. and FGMC, Inc., 181 B.R. 870 (Bankr.

S.D. Tex. 1994), reconsideration denied, 181 B.R. 898 (Bankr. S.D. Tex. 1995). 497 FE & B v. Charter Technologies, Inc., 57 F.3d 1215 (3d Cir. 1995)In re Peoro, 793 F.2d 1048 (9th Cir. 1986); In re Chronopoulis, 36 B.R. 364 (Bankr. N.D. Ill. 1984), aff'd. sub nom., In re TCI, Ltd., 769 F.2d 441 (7th Cir. 1985); In re Excello Press, Inc., 967 F.2d 1109 (7th Cir. 1992)(before pursuing prefer

ence action, counsel ordinarily should examine whether any obvious defenses bar case, but no per se rule). 498 Citicorp Venture Capital v. Creditors Committee, 323 F.3d 228 (3d Cir. 2003); In re SMS, Inc., 15

B.R. 496 (Bankr. D. Kan. 1981). 499 In re Arkansas Communities, Inc., 827 F.2d 1219 (8th Cir. 1987); In re Edmonds, 110 B.R. 38 (D. Kan. 1989); In re Webre, 88 B.R. 242 (9th Cir. BAP 1988). 500 In re Eisen, 14 F.3d 469 (9th Cir. 1994); McLaughlin v. McPhail, 707 F.2d 800 (8th Cir. 1983); Dreamlite Holdings Ltd. v. Kraser, 890 F.2d 1147 (Fed. Cir. 1989); In re Cloud, 107 B.R. 156 (N.D. Ill. 1989); In re B-K of Kansas, Inc., 98 B.R. 549 (D. Kan. 1989); see Townsend v. Holman Consulting Corp., 914 F.2d 1136 (9th Cir. 1990)(non-bankruptcy case, upholding sanctions for filing frivolous claims within pleadings containing non-frivolous claims). 501 Matter of MacMeekin, 722 F.2d 32 (3d Cir. 1983); In re Rubin, 769 F.2d 611 (9th Cir. 1985); In re Victor Intern. Inc., 278 B.R. 67 (Bankr. D. N.J. 2002); In re Dubrowsky, 206 B.R. 30 (Bankr. E.D.N.Y. 1997); In re Bernard, 85 B.R. 864, 865 (Bankr. D. Colo. 1988). 502 See In re St. Johnsbury Trucking Co., Inc., 184 B.R. 446 (Bankr. D. Vt. 1995), motion for stay denied, Winthrop, Stimson v. St. Johnsbury Co., 186 B.R. 53 (D. Vt. 1995); In re French Bourekas, Inc., 175 B.R. 517 (Bankr. S.D.N.Y. 1994), sanctions order, 183 B.R. 695 (Bankr. S.D.N.Y. 1995); In re Talmo,

185 B.R. 637 (Bankr. S.D. Fla. 1995); In re Marathon Home Loans, 101 B.R. 216, 222 (Bankr. S.D. Cal. 1989) (sanctioning harassment in the form of "a procedural war of scorched-earth attrition," even though

 

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