In re White Glove, Inc.

Anthony Baker was the chief executive officer of White Glove, Inc. (Inc) (debtor) and White Glove Enterprises (Enterprises) (debtor), entities that operated car washes. Baker owned the land on which Inc’s car washes were located and was Inc’s landlord. Inc and Enterprises each commenced chapter 11 bankruptcy cases and sought orders authorizing the retention of Robert Cohen’s law firm (Cohen). Baker also wanted Cohen to represent Baker’s personal interests in the bankruptcy proceedings. Cohen had previously represented Inc, Enterprises, and Baker in various legal matters, and Inc owed Cohen $39,000 in legal fees. Baker had guaranteed payment of the $39,000 at Cohen’s request, but this arrangement was not disclosed in Inc’s application to retain Cohen. The bankruptcy trustee and the unsecured-creditors committee objected to the applications to retain Cohen. The objectors asserted that (1) Cohen was not disinterested in either bankruptcy case given Cohen’s representation of Baker, (2) Cohen was not disinterested in Inc’s case because it was Inc’s creditor for the $39,000 legal-fee claim, and (3) Inc and Enterprises had claims against each other and had recently transferred money to each other, which could raise a potential conflict of interest if Cohen represented both entities. Baker contended, among other things, that Inc and Enterprises might present a joint reorganization plan, which would make having one lawyer desirable.