THE ETHICS OF REPRESENTING DEBTORS AND CREDITORS IN BANKRUPTCY

not uncommon, with payments frequently being made by insuranc e carriers, prepaid legal plans, employers and parents.¹

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1. Several courts have recognized that fee payment from sources other than the debtor may subject counsel to the temptation of furthering the payor's interests and deviating from the duty of undivided loyalty to the real client.¹⁶¹
2. Some courts have allowed the DIP's partners or shareholders to protect their investment by individually paying or guaranteeing the DIP's attorneys' fees,¹⁶² even if the related entity is also a creditor.¹⁶³ But one court has stricken such guarantees from fee agreements.¹⁶⁴ Other courts have terminated counsel's representation because of the appearance of conflict and potential for conflict when the motives of the retainer payor are suspect in light of