In re Licking River Mining, LLC

(Bankr. E.D. Ky. Dec. 14, 2016)

The bankruptcy court grants the U.S. Trustee’s motion to disqualify the law firm from representing the trustee in certain adversary proceedings. The firm was retained pursuant to 11 U.S.C. § 327(e). However, after the court approved the firm’s employment, the firm supplemented its initial disclosures, stating it had previously represented certain parties adverse to the trustee in the adversary proceedings. The court finds that the prior representation created a conflict of interest and thus the firm must be disqualified in those actions. Opinion below.

Judge: Wise


Author: Matt Lindblom

In re Romano

(N.D. Ind. Sept. 14, 2016)

The district court affirms the bankruptcy court’s ruling that denied appellant’s (Jones) application for post facto appointment as special counsel to debtor and his administrative expense motion. Debtor filed a routine chapter 7 case and obtained a discharge; however, she failed to disclose an employment discrimination action she filed in federal district court prior to filing her bankruptcy case. She eventually reopened her case and disclosed the lawsuit. The chapter 7 trustee filed an application to employ his law firm, which was granted, and quickly settled the case. Jones sought compensation for representing debtor in her employment discrimination case. Since he did not pursue any argument pursuant to § 327(e), the district court focused solely on § 327(a) and found that Jones’s claim failed because the trustee did not request or consent to his employment. Likewise, Jones’s attempt to obtain an administrative expense priority failed because § 330(a)(1) does not authorize compensation to attorneys not employed under § 327(a).

Judge: Springmann

Attorney for Debtor: Richard Busse

Attorney for Trustee: Kenneth Manning

Attorney for Appellant: Stuart Jones

Author: Robert K. Imperial


In re Licking River Mining, LLC

(Bankr. E.D. Ky. Sep. 22, 2015)

The bankruptcy court approves the trustee’s employment applications over the lender’s objections. The lender argued that the professionals sought to be employed were not disinterested for reasons including that they were involved with the case before conversion to chapter 7 and potentially had a conflict with accepting payment from a collateral carve-out. The court approves the applications, except for the provision of a retainer to one of the professionals. Opinion below.

2015-09-22 – in re licking river mining

Author: Matt Lindblom

In re Clinton County Hospital, Inc.

(Bankr. W.D. Ky. Sep. 3, 2015)

The bankruptcy court denies the debtor’s motion to employ the law firm as special counsel nunc pro tunc. The debtor sought to employ the firm for its expertise in a particular area of law. However, the motion was filed eight months after the bankruptcy was commenced. Thus, while the motion met many of the factors necessary to employ a professional under 11 U.S.C. § 327, the delay in filing the motion was not satisfactorily explained to the court. Thus, the motion is denied. Opinion below.

2015-09-03 – in re clinton county hospital

Author: Matt Lindblom