Holding to a minority view among federal appeals courts, the Third Circuit has refused to apply sanctions against a law firm that, although committing “textbook unprofessional” conduct in a bankruptcy case, did not act in bad faith.
The judges, in In re David Leroy Beers , No. 09-1666, affirmed lower court rulings that seem out of sync with the current foreclosure crisis, sending a message that firms can’t be found guilty of behaving maliciously even if they act egregiously on a regular basis.
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