THE ETHICS OF REPRESENTING DEBTORS AND CREDITORS IN BANKRUPTCY

139 B.R. 902 (Bankr. W.D. Mo. 1992)(law firm member resigned as assistant secretary; his disqualification not imputed to firm); Matter of Federated Department Stores, Inc., 20 B.C.D. 973 (Bankr. S.D. Ohio 1989)(investment banker's director was director of debtor prepetition); In re Quakertown Glass Co., 73

B.R. 468 (Bankr. E.D. Pa. 1987)(representation of insider ceased); Cle-Ware Industries, Inc. v. Sokolsky,

493 F.2d 863 (6th Cir. 1974); In re PHM Credit Corp., 110 B.R. 284 (E.D. Mich. 1990); see also In re Firstmark Corp., 132 F.3d 1179 (7^th Cir. 1997)(committee counsel received minimal sanction when it withdrew from creditor representation after discovery of conflict during bankruptcy case).

²¹⁴In re Blinder, Robinson & Co., 131 B.R. 812 (D. Colo. 1991); In re Lee Way Holding Co., 102 B.R. 616 (S.D. Ohio 1988); In re Decor Corp., 171 B.R. 277 (Bankr. S.D. Ohio 1994). See also In re EToys, Inc., 331 B.R. 176, 192 (Bankr. D. Del. 2005)(DIP counsel should have promptly filed disclosure affidavit and let another, disinterested professional handle matter involving creditor client); In re Brennan, 187 B.R. 135 (Bankr. D.N.J. 1995) where the court noted the creditors committee and any examiner were the ones to investigate debtor conduct and financial condition, not the DIP and its counsel. See In re Andover Togs, Inc., 199 B.R. 4 (Bankr. S.D.N.Y. 1996)(retention of accountants to complete audit under § 327(e)). But see In re Cook, 223 B.R. 782 (10^th Cir. BAP 1998)(special counsel too limited and too late). ²¹⁵Resignation from office and directorship and sale of stock postpetition not held not to salvage representation. Michigan Interstate Ry. Co., 32 B.R. 327, 32930 (Bankr. E.D. Mich. 1983); In re Guy Apple Masonry Contractor, Inc., 45 B.R. 160 (Bankr. D. Ariz. 1984). See also In re Amdura Corp., 139 B.R. 963 (Bankr. D. Colo. 1992)(magnitude of relationship between firm and creditor may be so great that special counsel cannot cure); In re Weibel, Inc., 161 B.R. 479 (Bankr. N.D. Cal. 1993)(law firm partner's resignation from directorship of debtor prepetition did not prevent disqualification).

²¹⁶In re Princeton Medical Management, Inc., 249 B.R. 813 (Bankr. M.D. Fla. 2000)(subordination of claim insufficient); In re Brennan, 187 B.R. 135 (Bankr. D.N.J. 1995); In re Watervliet Paper Co., 111 B.R.131 (W.D. Mich. 1989); Matter of PMH Credit Corp., 110 B.R. 284 (W.D. Mich. 1990)(bankruptcy judge has § 105 authority to adopt curative measures to resolve non-disinterestedness); In re Adam Furniture Industries, Inc., 158 B.R. 291 (Bankr. S.D. Ga. 1993); In re Roberts, 46 B.R. 815 (Bankr. D. Utah 1985) rev'd in part, 75 B.R. 402 (D. Utah 1987). ²¹⁷In re TMA Assoc., Ltd., 129 B.R. 643, 646 n.6 (Bankr. D. Colo. 1991).
²¹⁸In re Heatron, 5 B.R. 703 (Bankr. W.D. Mo. 1980); In re Best Western Heritage Inn Partnership, 79 B.R. 736 (Bankr. E.D. Tenn. 1987); see In re Sharon Steel Corp., 154 B.R. 53 (W.D. Pa. 1993) rev'd, U.S. Trustee v. Price Waterhouse, 19 F.3d 138 (3d Cir. 1994) (accountant not required to waive claim, but agreed not to participate as creditor or vote on plan).

²¹⁹E.g. In re THC Financial Corp., 837 F.2d 389 (9th Cir. 1988); Matter of Triangle Chemicals, 697 F.2d 1280 (5th Cir. 1983); In re Land, 943 F.2d 1265 (10th Cir. 1991); In re Arkansas Co., 798 F.2d 645 (3d Cir. 1986); F/S Airlease II, Inc. v. Sunon, 844 F.2d 99 (3d Cir.) cert. denied, 109 S.Ct. 137 (1988) (standard not met); In re Mehdipour, 202 B.R. 474 (9th Cir. BAP 1996). See In re Fleming Companies, Inc., 305 B.R. 389 (Bankr. D. Del. 2004) (failure of bankruptcy counsel to file application is not excusable, extraordinary circumstance).

²²⁰In re Keren Ltd. P'ship, 189 F.3d 86 (2d Cir. 1999); In re Simpson, 41 F3d 316 (7^th Cir. 1994); In re Occidental Financial Group, Inc., 40 F.3d 1059 (9th Cir. 1994); In re Land, 943 F.2d 126 (10th Cir. 1991); In re Weibel, 176 B.R. 209 (9th Cir. BAP 1994); In re Kroeger Properties and Development, Inc., 57 B.R.