In this Essay, the authors explore the question of how to assess the independence of debtor’s counsel in Chapter 11. The question has arisen in recent high-profile bankruptcy cases, attracting renewed attention from commentators. The authors examine these cases and revisit the unique role that debtor’s counsel serves.
From this analysis, a few guiding principles emerge for determining independence and managing conflicts that may arise. First, consistent with the rules outside of bankruptcy, sophisticated parties are capable of waiving conflicts and should be free to do so when their interests alone are affected by the conflict. Second, the possibility of conflicts—both real and apparent—is much higher for debtor’s counsel than for attorneys in other roles. This creates a challenge for courts, which must address both the real conflicts and the weaponization of apparent conflicts to shift leverage. Conscious of this, courts should rely, whenever possible, on intermediate remedies—such as conflicts counsel and ethical firewalls—to address allegations that debtor’s counsel is not independent. Finally, one should be careful to separate the analysis of the independence of a debtor’s managers (including its directors and officers) from that of its counsel.
With this framework in mind, notwithstanding several criticisms from commentators, most of the outcomes in recent cases are easy to explain and reconcile.
Commentary:
Finding Debtor’s Counsel offers a clear-eyed and practical account of why conflicts are endemic in Chapter 11 and why courts should favor calibrated remedies—waivers, conflicts counsel, ethical walls—over the blunt instrument of disqualification. The authors’ throughline is institutional humility: in a debtor-in-possession system built on negotiated allocation among competing constituencies, courts should be wary of letting conflict allegations become leverage tools that destroy estate value rather than protect it .
But the article also underscores how sharply consumer bankruptcy diverges—and why that divergence deserves far more scholarly attention. In Chapters 7 and 13, Congress has made an explicit normative choice that debtor’s counsel is supposed to represent the debtor’s interests, even when doing so yields no benefit to the estate. Section 11 U.S.C. § 330(a)(4)(B) codifies that choice, authorizing compensation based on benefit and necessity to the debtor, without regard to estate enhancement. That is not an ethical loophole; it is the policy. (In an indirect and backhanded manner, so does Lamie v. US Trustee, which, by limiting such compensation from the bankruptcy estate, the independence of the debtor's attorney is also preserved.) Consumer debtor’s counsel is not a neutral allocator among creditors, but a necessary counterweight in a system where trustees and creditors otherwise dominate.
This contrast matters because consumer bankruptcy is not a sideshow—it is the overwhelmingly predominant form of bankruptcy relief in the United States, and thus the real bankruptcy system. Chapter 11 may generate headlines and law review ink (and adoration from tenure committees), but it is a statistical blip compared to the millions of consumer cases that define access to the fresh start. If Chapter 11 scholarship has matured into a nuanced discussion of conflicts, waivers, and institutional design, consumer bankruptcy scholarship should receive the same sustained attention. Further work—ideally by these authors and others—examining the ethics, incentives, and statutory choices governing consumer debtor representation would be a welcome and necessary next step. Understanding how and why Congress affirmatively empowered debtor-centered advocacy in consumer cases is essential, not only to avoid misapplying Chapter 11 instincts where they do not belong, but to ensure that the bankruptcy system actually functions for the people it serves most often.
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