In re Lee

94 B.R. 172 (1989)

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In re Lee

United States Bankruptcy Court for the Central District of California
94 B.R. 172 (1989)

Facts

Chile and Hae Sook Lee (the Lees) (debtors) were the sole shareholders and operators of the Seoul Corporation (Seoul) (debtor), a merchandise and jewelry wholesaler. Seoul filed for reorganization under chapter 11 of the bankruptcy code, and then the Lees a filed a second chapter 11 case on their own behalf. The Lees and Seoul had a number of overlapping creditors, and the two debtors shared joint liability on many debts. Both the Lees and Seoul sought to be represented by the same law firm. The law firm filed parallel applications with the bankruptcy court for appointment as counsel to both chapter 11 cases but intentionally withheld the related nature of the filings. The law firm affirmed in both cases that it was not connected with any other interested party except for the debtor. The bankruptcy court became aware of the parallel applications and issued an order to show cause as to why the law firm should not be disqualified from representing both parties.

Rule of Law

Issue

Holding and Reasoning (Bufford, J.)

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Debtors and Creditors

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