2007 NORTON BANKRUPTCY LAW SEMINAR MATERIALS
THE ETHICS OF REPRESENTING DEBTORS &
CREDITORS IN BANKRUPTCY
By Susan M. Freeman
B. Representation of Multiple Creditors.
responsibility requirements over all attorneys appearing before them, whether or not their
employment is court-approved.
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The client consultation required for meaningful consent should include an agreement that counsel can withdraw whenever she believes it unethical to continue, without disclosing the reasoning for that belief. Information learned from one client about bases for disqualifying its claim would privileged. There must be some agreement in advance as to continued representation of one or the other, or withdrawal from representation of both, in the event the creditors' interests diverge. It is only sensible that such an agreement be clearly documented in advance, and signed by the creditor clients.
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Bankruptcy Rule 2019 requires that counsel representing more than one creditor or equity security holder file a verified statement identifying them, the nature and amount of their claims or interests, the pertinent facts and circumstances of counsel's employment, and other details. Any material changes are to be disclosed in supplemental statements. Failure to comply may result in inability to be heard in the case, and invalidity of reorganization plan ballots or other documents filed on behalf of the creditors by the attorney.
C. Fiduciary Duties of Creditors' Committee Members.
1. Committees have fiduciary duties to the constituent creditors or equity they represent, with obligations of fidelity, undivided loyalty, and impartial service in
the interests of all their constituents. They are not fiduciaries for the debtor or the
This outline is adapted from Chapter 27, Ethical Responsibilities, Norton Bankruptcy Law & Practice 2d (Thomson-West 2005)
