Bankr. WDNC: In re Pacific Avenue, L.L.C- Requirement of Disinterestedness for Representation of Chapter 11 Debtor

Summary: The Debtor sought to employ James McElroy & Diehl, P.A. ("JMD"), as counsel  under 11 U.S.C. §  327(a) for representation in various other matters, including litigation and other "future, discrete matters" in the bankruptcy cases.   Because JMD had received substantial compensation from two equity owners of the Debtor, who were also substantial creditors, the Court found that JMD could not be deemed to be disinterested as required under 11 U.S.C. § 327(a) and could not be approved.  Nor could JMD be approved under 11 U.S.C. §  327(e) for "a specified special purpose, other than to represent the trustee in conducting the case" as even that  more limited representation was within the scope of representing the Debtor.   In re Pacific Avenue, L.L.C- Requirement of Disinterestedness for Representation of Chapter 11 Debtor.PDF