A judge kicked Pillsbury Winthrop Shaw Pittman off a bankruptcy case for a conflict that may end up costing the firm its $4 million in fees.
Citing a “complete breakdown of creditor confidence” due to a conflict the firm had failed to disclose, U.S. Bankruptcy Judge Marilyn Morgan in San Jose, Calif., granted a motion Monday to disqualify Pillsbury in the bankruptcy case of SonicBlue, an electronics maker that went belly up in 2003. She also ordered the appointment of a Chapter 11 trustee, but put off any discussion of disgorging the fees Pillsbury has earned as debtor’s counsel.
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