In re Maxus Energy Corp.

Maxus Energy Corporation filed for bankruptcy. Thereafter, Maxus Liquidating Trust (trust) (plaintiff) sued Maxus’s parent companies—YPF S.A., YPF International S.A., YPF Holdings, Inc., and CLH Holdings, Inc. (collectively, YPF) (defendants)—asserting alter-ego and fraudulent-conveyance claims. White & Case (White) represented the trust. Sidley Austin LLP (Sidley) represented YPF. Jessica Boelter was a Sidley partner who represented YPF in the proceeding. Boelter then left Sidley and began working at White while the proceeding was ongoing. White conducted a standard conflicts-screening procedure before Boelter started. On Boelter’s first day, White implemented a screen to ensure that Boelter did not work on or have access to files on the YPF matter. Boelter agreed to comply with the screen and periodically confirmed her compliance. White gave YPF written notice of Boelter’s employment when Boelter joined the firm. White explained the screen, confirmed compliance with the applicable rules, and notified YPF that review might be available before a tribunal. White agreed to respond to inquiries and, in fact, provided additional information after receiving questions from YPF’s counsel. Boelter did not receive any portion of the fees White earned from the YPF proceeding. Nevertheless, YPF moved to disqualify White. Both parties agreed that Boelter was personally barred from representing the trust and that Boelter had not attempted to represent the trust. Nevertheless, YPF argued that Boelter’s conflict was imputed to the entire White firm such that the firm should be disqualified. The bankruptcy court denied YPF’s motion. YPF appealed to the Third Circuit.