4th Circuit: Rahmi v. Trumble (In re Bon-Air Partnership)- Trustee Conflict of Interest

Summary: Many months after the trustee’s sale of the partnership’s sole asset had already occurred and been approved by the court, Rahmi, an owner of the debtor, asserted as a reason to invalidate the sale that a conflict of interest had previously arisen, as the Trustee’s law firm was involved in a separate debt collection action against Rahmi. The 4th Circuit rejected this, holding that, pursuant to 11 U.S.C. § 327, Trustees may, with the court’s approval, to employ attorneys “that do not hold or represent an interest adverse to the estate, and that are disinterested persons, to represent or assist the trustee in carrying out the trustee’s duties.” The debt collection was against Rahmi individually, whereas the assets sold were solely the property of the partnership. See W.Va. Code § 47B-2-3. Accordingly, there was no conflict of interest. For a copy of the opinion, please see: Rahmi v. Trumble (In re Bon-Air Partnership)- Trustee Conflict of Interest.pdf