Service to the Estate and Ethics:
Ethics
| ID | Name | Group | Other | Code
Sec |
Cross
Ref | Problem
Referenced | Proposed
Solutions |
NBRC-
0175 | Kenneth P. Childs, on behalf of the Bankruptcy Review Committee
of the Oregon State Bar Debtor-Creditor Section | Attorney |
| 327(a) | 101(5) | When determining whether a professional is
"disinterested" under 11 USC § 327(a), every member of a
firm should not be disqualified because one of its members is not
"disinterested." Enlightened courts have held in a number of
instances that a member of a firm may be retained under such
circumstances where a "Chinese Wall" was created to screen out
nondisinterested members. | In recognition of
the realities of modern practice, the definition of
"disinterested" in 11 USC § 327(a) should be amended to
recognize that a professional firm is not disqualified solely based on
the disqualification of one of its members as long as a proper screening
mechanism is applied. |
NBRC-
0175 | Kenneth P. Childs, on behalf of the Bankruptcy Review Committee
of the Oregon State Bar Debtor-Creditor Section | Attorney |
| 327(a) | 101(14) | Definition of a "disinterested person" in 11 USC §
327(a) should not necessarily disqualify professionals who have a claim
against the estate. Often, the attorney who has been counseling the
debtor prior to the bankruptcy filing, or an accountant who is most
familiar with the debtor's books and records, has not been paid all of
her or his pre-petition fees. Where the professional is unwilling to
waive the claim for fees, most courts have held that he or she is
prohibited from representing the DIP post-petition. However, the
existence of this claim does not necessarily affect the professional's
judgment, and the court should be allowed to evaluate whether a
professional is "disinterested" on a case by case
basis. | 11 USC § 327(a) should be
amended to delete the requirement that professionals not be creditors,
but professionals should still be required to disclose their status to
the court when making application for employment. In order to screen
out non-disinterested creditor professionals, this section could be
amended to prohibit professionals from participating in the case as a
creditors, other than to file proof of claim, and from voting on any
proposed plans. |
NBRC-
0182 | Richard C. Bartel | Private
Investigator & Detective | Copy of
complaint sent to FBI |
|
| Author provides a copy of a complaint he sent to the FBI and
presented as part of his testimony at the 12/96 Open Forum. In his
complaint, he describes what he considers to be "the largest
[b]ankruptcy fraud in U.S. history." According to the author, a
bankruptcy trustee and other participants stole assets from a large
corporate bankruptcy estate "in a pattern of activity violative of
the racketeering laws..., through the unlawful disposition and transfer
of assets of a bankruptcy estate at below market and without
appraisals,...and by raw fictitious paper transfers to non-bankruptcy
subsidiaries and affiliates, and now to the former [t]rustee's personal
interests...." | Author states that
"it is incumbent upon the United States (DOJ, DOT IG) to assure a
complete formal investigation of this case, particularly due to the
actual involvement of the case [t]rustee." |
NBRC-
0193 | James V. Stanton and Richard A. Steyer, on behalf of Natl. Assoc.
of Bankruptcy Trustees | Attorneys and
bankruptcy trustees | Statement by Saul Eisen,
NABT's president |
|
| In the attached statement, the
president of the National Association of Bankruptcy Trustees
("NABT") states that trustees should be allowed to retain
themselves and their firms to represent the trustee. Otherwise, as a
NABT study indicates, a majority of trustees could not afford to remain
trustees if they did not receive payment for their professional
services. This dilemma is especially true in areas where case volume is
small, thereby diminishing profit from trustee work. The author
concludes that "there is a cost savings to the [e]state to allowing
[t]rustees to employ themselves or their
firms." | Bankruptcy Code should be
amended to allow trustees to retain themselves and their firms to
represent the trustee. |
NBRC-
0224 | Mike Salem | Bankruptcy
petitioner |
|
|
| Author alleges that the Bankruptcy Examiner in his chapter 11
case used his position to profit millions of dollars. Given that the
author's case was filed in North Carolina, and that North Carolina is
not under the jurisdiction of the U.S. Trustee system, the Inspector
General's Office does not have authority to investigate his allegations
of court officer self-dealing. | Bankruptcy
System should be revised so that an independent agency is authorized to
investigate court officer self-dealing in North Carolina. |
NBRC-
0296 | Lawrence B. Giesing | President, St.
Louis Postal Credit Union |
|
|
| Author encloses an advertisement
sent to a large number of households in the St. Louis area from a law
firm trying to drum up chapter 13 business. The ad reads "Bill
Consolidation!!!," and states "No Credit Needed! Not a loan!
Law says that no person should suffer hardship beause of debt!"
The author of the submission inquires, "When did Chapter 13 become
a bill consolidation loan Bankruptcy has become as easy as cutting out
a coupon for Taco Bell." | Bankruptcy
system should be revised to prevent attorneys who are trying to attract
chapter 13 business from actually encouraging frivilous chapter 13
filings by misrepresernting the purpose and process of this
chapter. |
NBRC-
0384 | American Bankruptcy Institute | American Bankruptcy Institute
("ABI") |
|
|
| ABI presents this "Report on the State of the American
Bankruptcy System," which is the capstone of ABI's three-year
Bankruptcy Reform Study Project. The Project's efforts culminated with
a 65-question survey covering a broad spectrum of possible areas of
reform. The study indicates that: (1) in general, the Code of 1978 is
working well; and (2) probelms of delay, excessive costs, unfairness,
and abuse need to be addressed in the current round of
reforms. | ABI recommnds: (1) strict deadlines
for dismissal or appointment of trustees to help combat abuse; (2)
reorganization of chapter 11 policy to provide stricter time limits,
elimination of non-viable debtors, and reduction of excessive
professional fees; (3) relaxing eligibility requirements for consumer
reorganizations under chapter 13, and providing time limits, limited
discharge and uniform national exemptions; (4) high standards of
integrity for all professionals; (5) a balance between creditors' and
debtors' rights, and equality of distribution; and (6) not adopting
priority classes of claimants. |
NBRC-
0419 | Albert A. Thornton | Businessman | Copy of letter to Senator
Fred Thompson |
|
| Author of letter upset that
debtor "got away". Letter refers to enclosed ad from local
newspaper presumably by a lawyer who handles bankruptcy cases (the ad
was not attached to the copy of the letter) | "I think this lawyer should have to pay off all the cases
that he handles and let the clients pay him all of the
debt." |
NBRC-
0436 | Murray S. Lubitz & Louis S. Robin | President, Commercial Law League of America and Chair, CLLA
Service, Ethics Subcommittee, respectively | Working Group Position Paper | 327(a) |
| If counsel need only disclose "materially adverse"
interest, such professional, innocently or not, may not discern or
disclose such an interest. To require all interests be disclosed takes
discretion of disclosure out of the hands of the proposed counsel and
provides the court and other parties with ample information about
possible "materially adverse" interests. | While agreeing that a lessening of the standard of
disinterestedness to a requirement that the proposed counsel not hold an
interest which is "materially adverse," authors nonetheless
encourage the Commission to include a requirement that there be the
disclosure of all interests by the professional. |
NBRC-
0460 | Vincent Germano | Private
citizen | One page Public Service Notice by
author. Multi-page booklet by author outlining his
case. |
|
| Author is displeased with the
outcome of a bankruptcy proceeding in which he lost his business, a
hotel. | "Although ourside of the duties
of your Committee, we would appreciate a referral to an exceptional
attorney to bring our legal action on a contingency fee basis."
"Should your Committee's report fail to propose reforms to insure
that the administrators of Bankrupted estates be without any hint of
conflict of interests with the bankruptor involved parties. That, the
report call for severe penalties for perjuring affidavits and
applications for appointment to positions in control of the Bankruptcy
proceeding-by other than colluding bar associations." |
NBRC-
0842 | Richard L. Haeussler | Attorney |
|
|
| Rule 9011 seems to pit the client against the attorney.
"The attorney relies on the information provided by the client to
prepare the schedules. If the client gets into trouble because of the
suppression of information, it is easy to say that the attorney did it
or failed to do it." | "I would
suggest that there be stronger provisions aimed at the debtor for
failing to disclose information. However, I do believe that there
should be some lee way because in some cases, the debtor9s0 are under a
great deal of pressure and that they may forget some items. I would
suggest that tif the items were substantial, such as real property on
which they have been making payments, etc, then it is not an items that
should be forgotten Bit if the items are some debts, then I believe
that the debtor should be able to amend." |
NBRC-
0953 | Lloyd Schade | Debtor who filed
bankruptcy |
|
|
| Author recently received a discharge in bankruptcy after four
years. He writes to complain "The Alaskan Bankruptcy is extremely
corrupt and controlled by the insiders without any check or balance.
They harrass anyone connected with the debtor, expecially [sic] those
with money which will make more work and income for
them." | "If there is anything to be
done I will be glad to help but I am afraid of these people and need
protection from them." |
NBRC-
0970 | Joseph T. Hannigan, Jr. | President,
U-File Discount Document Centers of America, Inc. | Statement of Objections of author to 11 U.S.C.
§110. | 110 |
| "As requested, I am
forwarding you a brief statement of the objections that I, and others,
have had pursuant to 11 U.S.C. §110. "Penalty for persons who
negligently for fraudulently prepare bankruptcy
petitions"." | None |
NBRC-
1062 | Joseph Fischer | citizen |
|
|
| Author contends that there was corruption in the bankruptcy case
in which he was involved. | n/a |
NBRC-
1125 | Maggie Reid | citizen | Complaint filed by Maggie
Reid in the Circuit Court of Greene County, Missouri against the trustee
in her bankruptcy; Opinion letter from James R. Jarrow of Baker Sterchi
Cowden & Rice, L.L.E. of Kansas City, Missouri concerning her
case. |
|
| Author had a bad experience with
the bankruptcy system, and submits a copy of a complaint she filed in
the Circuit Court of Greene County, Missouri against the trustee in her
bankruptcy, which outlines the wrongs she feels were committed, along
with an opinion letter from James R. Jarrow of Baker Sterchi Cowden
& Rice, L.L.E. of Kansas City, Missouri concerning her
case. | None. |
NBRC-
1183 | Robert J. Tashjian | Veterinarian,
President, American Chinese Veterinary Medical Frontiers,
Inc. |
|
|
| Author writes to add points to the material he previously
submitted to the Commission about his bankruptcy case. Author complains
of actions by his attorney and the attorneys representing the creditors
in his case, and the difficulty in getting another lawyer to represent
him. | N/A |
