THE ETHICS OF REPRESENTING DEBTORS AND CREDITORS IN BANKRUPTCY

B.R. 531 (Bankr. D. Mont. 2000); In re Cent. Florida Metal Fabrication, Inc., 207 B.R. 742 (Bankr. N.D. Fla. 1997); In re Anolik, 207 B.R. 34 (Bankr. D. Mass. 1997); In re R. Kaufman Jewelers, Inc., 171 B.R. 905 (Bankr. S.D. Fla. 1994); In re Barrie Reed Buick-GMC, Inc., 164 B.R. 378 (Bankr. S.D. Fla. 1994); In re Amstar Ambulance Service, Inc., 120 B.R. 391 (Bankr. N.D. W. Va. 1990); see In re Rocky Mountain Helicopters, Inc., 186 B.R. 270 (Bankr. D. Utah 1995) (must be evidence to show attorney was aware or should have been aware of lack of benefit to the estate). ⁶⁵See In re Crown Oil, Inc., 257 B.R. 531 (Bankr. D. Mont. 2000); In re Office Products of America, Inc., 136 B.R. 983 (Bankr. W.D. Tex. 1992); In re Moffitt, 146 B.R. 364 (Bankr. S.D. Tex. 1992); In re Walter, 83 B.R. 14 (9th Cir. BAP 1988); In re E. Paul Kovacs and Co., Inc., 16 B.R. 203 (Bankr. D. Conn. 1981); In re Grabill Corp., 110 B.R. 356 (Bankr. N.D. Ill. 1990); In re Crouse Group, Inc., 75 B.R. 553 (Bankr. E.D. Pa. 1987); In re Wells, 71 B.R. 554 (Bankr. N.D. Ohio 1987); see also In re Alderson, 114

B.R. 672 (Bankr. D. S.D. 1990)(fees generated after attorney should have known conversion was foregone conclusion denied).

⁶⁶See In re Pro-Snax Distributors, Inc., 157 F.3d 414 (5^th Cir. 1998) (counsel should have known from outset that any plan would fail); In re JLM, Inc., 210 B.R. 19 (2d Cir. BAP 1997); In re Rancourt, 207 B.R. 338 (Bankr. D.N.H. 1997); In re New England Metal Co., Inc., 155 B.R. 38 (Bankr. D. R.I. 1993); In re Bonneville Pacific Corp., 147 B.R. 803 (Bankr. D. Utah 1992) and 196 B.R. 868 (Bankr. D. Utah 1996) (proper representation by DIP counsel would have obviated need for examiner investigation of postpetition fraud and mismanagement) rev'd in part Hansen, Jones & Leta v. Segal, 220 B.R. 434 (D. Utah 1998); In re Rusty Jones, Inc., 134 B.R. 321 (Bankr. N.D. Ill. 1991)(attorneys' fees disgorged for assisting insiders in actions detrimental to creditors); In re Kendavis Industries International, Inc., 91 B.R. 742 (Bankr. N.D. Tex. 1988)(same); In re Sharon Steel Corp., 86 B.R. 455 (Bankr. W.D. Pa. 1988), aff'd. 871 F.2d 1217 (3d Cir. 1989) (court questioned whether DIP counsel met its fiduciary duties in defending against a motion for appointment of a trustee, where the DIP was accused of gross mismanagement, self-dealing, and substantial diminution of estate assets). But see In re Spanjer Bros., Inc., 191 B.R. 738 (Bankr. N.D. Ill. 1996)(opposing and losing motion to appoint trustee does not prove DIP counsel acted for benefit of insiders).

⁶⁷In re Coones Ranch, Inc., 7 F.3d 740 (8th Cir. 1993); In re Lederman Enterprises, Inc., 997 F.2d 1321 (10th Cir. 1993) and cases cited therein; compare In re DN Associates, 3 F.3d 512 (1st Cir. 1993)(value provided and fiduciary duties met despite creditors' plan being confirmed and three DIP plans rejected); In re Universal Factoring Co., Inc., 329 B.R. 62 (Bankr. N.D. Okla. 2005) (time spent on plan and disclosure statement for Ponzi scheme debtor not compensable; court had advised counsel it would not facilitate reorganization of debtor's Ponzi scheme, plans and disclosures assuming unsupported and unrealistic projections were of no benefit to the estate); In re Berg, 268 B.R. 250 (Bankr. D. Mont. 2001)(failure to exercise "professional control" over client); In re American Metallurgical Products, Inc., 228 B.R. 146 (Bankr.

W.D. Pa. 1998)(evaluate from perspective of when services were performed, were they reasonably likely to benefit estate); In re Anolik, 207 B.R. 34 (Bankr. D. Mass. 1997)(when professional has reason to believe goal is unachievable but still continues to amass fees, disgorgement may be appropriate). But see In re Pow Wow River Campground, Inc., 296 B.R. 81 (Bankr. D. N.H. 2003) (fees allowed although plan did not meet absolute priority rule when only U.S. Trustee objected to fees).

⁶⁸Matter of Taxman Clothing Co., 49 F.3d 310 (7th Cir. 1995); In re Kitchen Factors,Inc., 143 B.R. 560 (9th Cir. BAP 1992); In re Bean, 251 B.R. 196 (E.D.N.Y. 2000)(breach of duty for trustee to pursue avoidance action without prior cost-benefit analysis); In re New Boston Coke Co., 299 B.R. 432 (Bankr.

E.D. Mich. 2003); In re Concrete Products, Inc., 208 B.R. 1015 (Bankr. S.D. Ga. 1996); In re Keene Corp., 205 B.R. 690 (Bankr.S.D.N.Y.1997); In re Henson, 182 B.R. 588 (Bankr. N.D. Okla. 1995); In re Witts, 180 B.R. 171 (Bankr. E.D. Tex. 1995); In re Arnold, 162 B.R. 775 (Bankr. E.D. Mich. 1993); see also In re Big Rivers Elec. Corp., 233 B.R. 768 (Bankr. W.D. Ky. 1999)(no value from services in pursuit of sale agreement with "no shop" clause; collecting cases); see In re Ames Dep't. Stores, Inc., 76 F.3d 66