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*This outline is adapted from Chapter 27, Ethical Responsibilities,
Norton Bankruptcy Law & Practice 2d (Thomson-West 2005)
to reorganization); In re Mahoney, Trocki & Associates, Inc., 54 B.R. 823, 82728 (Bankr. S.D. Cal. 1985)(can represent DIP and, in state court actions on guarantees, its shareholders, since that representation furthers reorganization and DIP ability to collect its claim against shareholder); In re International Oil Co., 427 F.2d 186 (2d Cir. 1970); In re Guy Apple Masonry Contractor, Inc., 45 B.R. 160 (Bankr. D. Ariz. 1984); See also In re Harold & Williams Development Co., 977 F.2d 906 (4th Cir. 1992)(court should be flexible in exercising discretion to the extent not restricted by absolute Code provisions).
154Model Rules 1.13, 1.7. In dealing with the entity's constituents, counsel is to explain the identity of his client, the organization, when it is apparent that the interests are adverse. Model Rule 1.13(d). 155In re Grabill, 113 B.R. 966, 969 (Bankr. N.D. Ill. 1990), aff'd 135 B.R. 835 (N.D. Ill. 1991), aff'd 983 F.2d 773 (7th Cir. 1993). 156In re Global Marine, Inc., 108 B.R. at 1004; In re Chicago South Shore and South Bend R.R., 101
B.R. 10 (Bankr. N.D. Ill. 1989); In re Jartran, Inc., 78 B.R. 524 (Bankr. N.D. Ill. 1987); In re Hurst Lincoln Mercury, Inc., 80 B.R. 894 (Bankr. S.D. Ohio 1987); In re O'Connor, 52 B.R. 892 (Bankr. W.D. Okla. 1985); but see In re Amdura Corp., 121 B.R. 862 (Bankr. D. Colo. 1990)(relationship of firm to party adverse to debtor, and adverse party's role in the case, may be so important special counsel cannot relieve the problem). Special counsel need be disinterested only with respect to the matter on which such attorney is to be employed. 11 U.S.C. § 327(e); see In re RPC Corp., 114 B.R. 116 (M.D. N.C. 1990)(special counsel can represent DIP and former CEO and creditor of estate in lender liability action where interests are identical).
157In re Occidental Financial Group, Inc., 40 F.3d 1059 (9th Cir. 1994); In re W.F. Development Corp.,
905 F.2d 883 (5th Cir. 1990)(cannot represent limited and general partners in bankruptcy); In re Big Mac Marine, Inc., 326 B.R. 150 (8th Cir. BAP 2005); In re Westwood Homes, Inc., 157 B.R. 182 (Bankr. D. Me. 1993); In re Churchfield Management & Investment Corp., 100 B.R. 389 (Bankr. N.D. Ill. 1989)(insider was power behind the debtor, although not named as an officer or director; In re Parkway Calabasas, 89 B.R. 832 (Bankr. C.D. Cal. 1988); In re Lee, 94 B.R. 172 (Bankr. C.D. Cal. 1988); In re Al Gelato Continental Desserts, Inc., 99 B.R. 404 (Bankr. N.D. Ill. 1989).
158See In re Condor Systems, Inc., 302 B.R. 55 (Bankr. N.D. Cal. 2003) (financial advisor negotiating transaction with debtor shareholders while advising debtor on sale beneficial to shareholders but inadequate for estate); In re Keller Financial Services of Florida, Inc., 248 B.R. 859 (Bankr. M.D. Fla. 2000); In re Argus Group 1700, Inc., 199 B.R. 525 (Bankr. E.D. Pa. 1996)(goals shared with jointly represented principals and management, but interests not shared); In re Neidig Corp., 113 B.R. 696 (D. Colo.
