Bankruptcy judges discuss how they handle potential conflicts of interest. Three sitting bankruptcy judges shared their protocols for handling potential conflicts of interest during a panel discussion on Saturday at the American Bankruptcy Institute’s Annual Spring Meeting in Washington D.C.
Judges Martin Glenn, Deborah Thorne and Mary Walrath with the U.S. Bankruptcy Courts in New York, Chicago, and Wilmington, Del., respectively, spoke about the steps that they have been taking to ensure the integrity of the courts as they oversee bankruptcy proceedings that often involve a large number of parties, including creditors and their advisers.
Judge Glenn said he believes having a connection with a creditor or its advisers alone doesn't disqualify him from presiding over the case. But when a creditor with a connection with him got involved in a contested matter, another judge had to step in to handle the matter, he said. His routine is to keep the parties informed of whatever connections he has with those parties involved in a specific case before him, he said.
How to deal with their former colleagues is also part of the code of conduct. The judges said former law clerks of the judges can’t appear in their courts for at least a year or two. Judge Thorne said she has an agreement with one of her former clerks not to appear in her court at all because the judge and the former clerk have an ongoing mentor-mentee relationship.
If connections involve families or relatives, they require a more stringent approach, and Judge Walrath has firsthand experience. Four years after she became a bankruptcy judge in 1998, she married a lawyer and adopted a set of rules, she said. Her husband won’t appear in her court, but his law firm could if he filed a written agreement saying that he would not share any fees earned in that case, she said. His firm’s retention and fee applications are reviewed by a different judge even though her husband won’t share the fees, Judge Walrath said.
The panel discussion was held on the heels of the resignation of Judge David Jones from Houston's court last fall after the appellate court that appointed him found probable cause that he committed misconduct by failing to disclose his romantic relationship with a local bankruptcy lawyer. —Akiko Matsuda
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