THE ETHICS OF REPRESENTING DEBTORS AND CREDITORS IN BANKRUPTCY

⁵³⁵ Model Code of Judicial Conduct 3D(2).

⁵³⁶ 28 U.S.C. § 455; Bankruptcy Rule 5004. Disqualification from the entire case rather than a single dispute depends on whether the disqualifying circumstances are pervasive, or isolated to a single dispute

within the case. 1983 Advisory Committee Note to Bankruptcy Rule 5004.

⁵³⁷ 28 U.S.C. § 455(a).

⁵³⁸ (1) where the judge has a personal bias or prejudice concerning a party, or personal knowledge

of disputed evidentiary facts concerning the proceeding;

(2)

where in private practice, the judge served as lawyer in the matter in controversy, or a lawyer with whom he previously practiced law served during such association as a lawyer concerning the matter, or the judge or lawyer has been a material witness concerning it;

(3)

where the judge has served in governmental employment and in such capacity participated as counsel, adviser or material witness concerning the merits of the particular case in controversy;

(4)

where the judge knows that she, individually or as a fiduciary, or her spouse or minor child residing in her household, has a financial interest in the subject matter in controversy or in a party to the proceeding, or any other interest that could be substantially affected by the outcome of the proceeding;

(5)

where the judge or his spouse, or a person within the third degree of relationship to either of them, or the spouse of such a person:

(a) is a party to the proceeding , or an officer, director, or trustee of a party;

(b)

is acting as a lawyer in the proceeding;

(c)

is known by the judge to have an interest that could be substantially affected by the outcome of the proceeding;

(d)

is to the judge's knowledge likely to be a material witness in the proceeding. § 455(b). The various terms are defined in § 455(d).

⁵³⁹ 28 U.S.C. § 455(e). However, if the disqualification arises under § 455(b)(4) and the judge discovers the financial interest after spending substantial judicial on the matter, and that interest would not be substantially affected by the outcome, the judge may continue with the matter upon divestiture of the interest. § 455(f).

⁵⁴⁰ In re Apex Oil Co., 981 F.2d 302 (8th Cir. 1992). The concept has been recognized repeatedly in the context of bankruptcy appeals, and the liberal concept of finality used by the appellate courts. Id.

⁵⁴¹ In re Apex Oil Co., supra; In re Norton, 119 B.R. 332 (N.D. Ga. 1990)

⁵⁴² Matter of Johnson, 921 F.2d 585 (5th Cir. 1991); In re Continental Airlines Corp., 901 F.2d 1259 (5th Cir. 1990); In re Olson, 20 B.R. 206 (D. Neb. 1982)(appearance of possible lack of impartiality in the mind of the average person is enough to warrant recusal); In re Forty-Eight Insulations, Inc., 84 B.R. 129 (Bankr. N.D. Ill. 1988); In re Olcese, 86 B.R. 916 (Bankr. N.D. Ohio 1988). That court cites the legislative history of § 455 for the point that "Litigants ought not [to] have to face a judge where there is a reasonable question of impartiality, but they are not entitled to judges of their own choice." H.R. 1453, 93rd Cong., 1st Sess., reprinted in 1974 U.S. Code Cong. & Admin. News, 6351, 6355. 86 B.R. at 920. In re Martin-Trigona, 573 F.Supp. 1237 (D. Conn. 1983)(right to an impartial judge does not permit judge-shopping); In re Krisle, 54 B.R. 330 (Bankr. D. S.D. 1985)(same).

⁵⁴³ In re Olcese, 86 B.R. at 920. Although 28 U.S.C. § 144 does not apply to disqualification of bankruptcy judges (see numerous cases cited in In re Norton, 119 B.R. at 334), that statute's procedure for filing an affidavit stating the facts and reasons for the party's belief in grounds for disqualification is a sound one for raising disqualification concerns. In re Olson, 20 B.R. 206 (D. Neb. 1982)(finding § 144 mechanism appropriate in bankruptcy context); see In re Chandler's Cove Inn, Ltd., 74 B.R. 772 (Bankr.

E.D.N.Y. 1987)(conclusory statements and unsupported beliefs of no effect). ⁵⁴⁴ In re Olson, 20 B.R. 206 (D. Neb. 1982)(court duty bound to take affidavit allegations as true for