THE ETHICS OF REPRESENTING DEBTORS AND CREDITORS IN BANKRUPTCY

conveyance, or comparable distinction. Similarly, representation of several creditors wholly secured by separate assets would ordinarily be appropriate. But an unsecured creditor may well be adverse to a secured creditor, for example, especially if the secured creditor is also extending postpetition financing with the usual imposition of crosscollateralization requirements, security interest acknowledgements, etc.³⁴⁶ The bankruptcy court may prevent an attorney from representing a creditor when the firm already represents another client in the same case and the two clients have a conflict of interest.³⁴⁷ Bankruptcy courts have the power and responsibility to enforce professional responsibility requirements over all attorneys appearing before them, whether or not their employment is court-approved.³⁴⁸

1. The client consultation required for meaningful consent should include an agreement that counsel can withdraw whenever she believes it unethical to continue, without disclosing the reasoning for that belief. Information learned from one client about bases for disqualifying its claim would privileged.³⁴⁹ There must be some agreement in advance as to continued representation of one or the other, or withdrawal from representation of both, in the event the creditors' interests diverge. It is only sensible that such an agreement be clearly documented in advance, and signed by the creditor clients.
2. Bankruptcy Rule 2019 requires that counsel representing more than one creditor or equity security holder file a verified statement identifying them, the nature and amount of their claims or interests, the pertinent facts and circumstances of counsel's employment, and other details.³⁵⁰ Any material changes are to be disclosed in supplemental