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*This outline is adapted from Chapter 27, Ethical Responsibilities,
Norton Bankruptcy Law & Practice 2d (Thomson-West 2005)
B.R. 817 (D. Nev. 1983)(court allowed trustee to continue serving despite litigation over alleged ownership of majority of stock in the debtor and arguable preferential payment, given adamant support of creditors and postpetition lender); see also In re Indian River Homes, Inc., 108 B.R. 46 (D. Del. 1989)(lawyer was DIP officer's nephew); In re Covey, 57 B.R. 665 (Bankr. S.D. 1986)(attorney allowed to represent DIP nephew).
204 In re Intech Capital Corp., 87 B.R. 232 (Bankr. D. Conn. 1988) (4% of stock); In re Anver Corp., 44 B.R. 615 (Bankr. D. Mass 1984) (1% of stock); In re Daig, 799 F.2d 1251 (8th Cir. 1986) (stock warrant only).
205 In re Essential Therapeutics, Inc., 295 B.R. 203 (Bankr. D. Del. 2003) (ministerial role as secretary); In re Petralux Stainless, Ltd., 78 B.R. 738 (Bankr. E.D. Penn. 1987); In re Roger J. Au & Son, Inc., 65 B.R. 322, 33334 (Bankr. N.D. Ohio 1984), aff'd., 64 B.R. 600 (N.D. Ohio, 1986)(attorney position only ceremonial and uncompensated); B.E.T. Genetics, 35 B.R. at 273 (assistant secretary with no decisionmaking authority).
206 See, e.g., In re Michigan General Corp., 77 B.R. 97 (Bankr. N.D. Tex.) reh. denied, 78 B.R. 479 (Bankr. N.D. Tex. 1987); In re Michigan Interstate Railway Company, Inc., 32 B.R. 327 (Bankr. E.D. Mich. 1983); In re Leisure Dynamics, Inc., 32 B.R. 751 (Bankr. D. Minn.), aff'd. 33 B.R. 121 (D. Minn. 1983).
207 In re Weaver Potato Chip Co., Inc., 243 B.R. 737 (Bankr. D. Neb. 2000); see also In re West Delta Oil Co., Inc., 432 F.3d 347 (5th Cir. 2005); (special counsel took steps to acquire interest in debtor under plan). 208 Model Rule of Professional Conduct 1.10 (a) provides that no lawyer associated with a firm shall represent a client when the lawyer knows or reasonably should know that another lawyer associated with that firm would be prohibited from doing so by Rules 1.7, 1.8(c) or 1.9. The listed rules concern conflicts of interest. See also ABA/BNA Lawyers' Manual on Professional Conduct at 51:2006 (7-28-93) ("A lawyer's disqualification in non-conflict situations, such as where he has communicated ex parte with a party represented by counsel, probably will not result in the imputed disqualification of the lawyer's firm.") 209 See In re ZB Surfside Company, 1994 Bankr. LEXIS 1852 (Bankr. S.D.N.Y. 1994); In re Envirodyne Industries, Inc., 150 B.R. 1008 (Bankr. N.D. Ill. 1993); In re Weibel, Inc., 161 B.R. 479 (Bankr. N.D. Cal. 1993); In re Tinley Plaza Associates, L.P., 142 B.R. 272 (Bankr. N.D. Ill. 1992); In re Chicago South Shore and South Bend R.R., 101 B.R. 10 (Bankr. N.D. Ill. 1989); In re Paolino, 80 B.R. 341 (Bankr. E.D. Pa. 1987); In re Leisure Dynamics, 32 B.R. 753 (Bankr. D. Minn. 1983), aff'd., 33 B.R. 121 (D. Minn. 1983). The exception to the cases lacking analysis is In re Mortgage & Realty Trust, 195 B.R. 740 (Bankr.
C.D. Cal. 1996) which concerned an actual conflict of interest, not merely lack of disinterestedness. 210In re Keravision, Inc., 273 B.R. 614 (N.D. Cal. 2002); In re SS Retail Stores Corp., 211 B.R. 699 (9th Cir. BAP 1997); In re Capen Wholesale, Inc., 184 B.R. 547 (E.D. Ill. 1995); Vergos v. Timber Creek, Inc., 200 B.R. 624 (Bankr. W.D. Tenn. 1995)(approval of "Chinese Wall"); In re Creative Restaurant Management, Inc., 139 B.R. 902 (W.D. Mo. 1992). 211In re Kaiser Group Intern., Inc., 272 B.R. 846 (Bankr. D. Del. 2002); compare In re Mortgage & Realty Trust, 195 B.R. 740 (Bankr. C.D. Cal. 1996) (analyzing possibility of Chinese Wall in conflict-based disqualification context); In re Peck Foods, 196 B.R. 434 (Bankr. E.D. Wis. 1996)(Chinese Wall
ineffective for conflict).
212 In re Essential Therapeutics, Inc., 295 B.R. 203 (Bankr. D. Del. 2003).
213TWI International, Inc. v. Vanguard Oil and Service Co., 162 B.R. 672 (S.D.N.Y. 1994)(DIP attor
ney allowed to withdraw from representation of DIP president); In re Decor Corp. , 171 B.R. 277 (Bankr. S.D. Ohio 1994)(return fees paid within 90 days prepetition); In re Creative Restaurant Management, Inc.,
