Enron Corp., Bethlehem Steel Corp. and Planet Hollywood International are a few of the latest bankruptcy casualties. As late as Nov. 30, 2001, a staggering 231 public companies with assets exceeding $182.5 billion filed for bankruptcy relief this year, a 30 percent increase over all of last year. See www.BankruptcyData.com.
The attorney fees generated in large bankruptcy cases are also staggering, easily exceeding seven figures and sometimes even eight for the law firm representing the debtor. The competition among law firms hoping to represent debtors is intensifying as the size of the cases and the potential for enormous attorney fees increase. Yet how can a larger law firm assure the court that its attorneys do not represent any interest contrary to the debtor’s and that the firm is not biased? Conversely, how does a lawyer assure his law firm that the court will not order the disgorgement of fees already earned because a conflict was not disclosed?
