Jim Cossitt was a featured speaker at the 31st Annual Spring Meeting of the American Bankruptcy Institute (ABI), held April 18 – 21 in National Harbor, Maryland, where he participated as member of the Consumer Bankruptcy/Ethics & Professional Compensation Committee joint presentation. The subject of this education session was “Nothing Is Impossible: The Complex Requirements and Ethical Duties of Representing Chapter 11 and/or Chapter 13 Consumer Debtors.”
Jim also participated as a panel member of the ABI Ethics Task Force that presented their findings and recommendations on Sunday, April 21 at the Annual Spring Meeting of the ABI. The report provides recommendations for both consumer and business practitioners for uniform ethical standards in bankruptcy practice. Funded by ABI’s Anthony H.N. Schnelling Endowment Fund, the Task Force formulated a set of uniform ethical standards on a variety of bankruptcy-related matters, including use of conflicts counsel, employment of counsel and necessary disclosures, competency standards, and fiduciary duties of counsel for the debtor in possession (DIP).
The Ethics Task Force was established in 2011 by then-ABI President Geoffrey L. Berman of Development Specialists Inc. (Los Angeles) to address ethics problems encountered by bankruptcy professionals and judges as state ethics rules do not always fit with the realities of bankruptcy practice. Chaired by Judith Greenstone Miller of Jaffe Raitt Heuer & Weiss, P.C. (Southfield, Mich.), with Profs. Nancy B. Rapoport of the UNLV William S. Boyd School of Law (Las Vegas) and Lois R. Lupica of the University of Maine School of Law (Portland, Maine) serving as reporters, the Task Force formed committees, surveyed bankruptcy professionals, academics and judges, and examined recent case law to focus on seven recommendations:
1. proposed amendments to Bankruptcy Rule 2014 governing the hiring of bankruptcy professionals, including greater disclosure provisions for conflicts and connections;
2. duties of counsel for a debtor-in-possession as fiduciary and responsibilities to the estate;
3. framework for pre-approval of terms for retention and compensation under 11 U.S.C. § 328 to provide efficiency and clarity to courts in bankruptcy professional employment applications
4. use of conflicts counsel in business reorganization cases, especially in large or complicated cases that may present significant conflicts;
5. best practices for limited services representation in consumer bankruptcy cases;
6. competency for debtors’ counsel in business and consumer cases; and
7. report on best practices on creditors’ committee solicitation.
About the ABI Ethics Task Force
The mission of the Ethics Task Force is to consider ethics issues in bankruptcy practice and make recommendations for uniform standards, where appropriate.
A recent federal option (In re Nguyen) also helped bring about the committee’s formation: “Furthermore, the ABA Standards, which were developed primarily for non-federal, non-bankruptcy courts by unelected and nonjudicial parties, are ill-adapted to federal bankruptcy proceedings. The ABA Standards were not drafted to address the distinctive context of bankruptcy where, as here, administrative matters rather than litigation may be the focus of an attorney’s work.”
The Task Force is comprised of noted experts in professional ethics, including academics, judges, former ABI ethics co-chairs, leaders in ethics education and representatives from the US Trustee Program. The task force meets regularly via live meetings and teleconferences to discuss their findings and make recommendations. The committee’s areas of focus (subcommittees) include: conflicts of interest, disclosure/retention/fees, committee solicitation, discipline, sanctions and competence, and consumer bankruptcy. The final report and discussion was presented on April 21 at the Gaylord National Resort and Convention Center, National Harbor, Maryland.
View the complete report HERE.
ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes more than 13,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals providing a forum for the exchange of ideas and information.