By Thomas W. Lyons
Every year, lawyers file approximately 100-150 receiverships in Superior Court, meaning that every year the justices of the Superior Court appoint that many receivers. The receiver can have great powers and duties, subject to the supervision of the court, including the power to take possession of all assets of the estate in receivership, the power to abandon or sell property of the estate, the power to operate the estate as a business or to liquidate it, the power to prosecute and settle claims on behalf of the estate, the power to make recommendations to the court on granting or denying creditors’ claims against the estate, and the ability to have his or her fees paid from the assets of the estate.1 Receiverships may involve hundreds of thousands or millions of dollars of assets and liabilities. It is critical that the receiver be both capable and impartial.
Typically, the petition to appoint a receiver does not request a particular person be appointed. Instead, the petitioner orally suggests one or more candidates at the initial hearing or conference with the court. The appointments are made from a list of 55 court- approved receivers who are in about 40 firms or solo practices. What happens thereafter depends on the individual judge hearing the petition. Often, there is no representation on the record that the proposed receiver has no conflicts of interest, nor do many courts demand that showing nor is the proposed receiver required to disclose whether he or his firm represent any of the parties to the receivership in any capacity. As of the time this article was written, it was rare, if ever, that the creditors were informed if the receiver or his firm represents the “debtor” or one of the other creditors/claimants in other matters.
This situation occasionally presents at least the appearance of a conflict or other possible impropriety as when the receiver’s law firm lists a major creditor in the receivership as a “representative client” on its website. This raises the question of what ethical rules, if any, govern the appointment and conduct of receivers? Specifically, is a lawyer acting as a receiver governed by the Rules of Professional Conduct, The Code of Judicial Conduct, both sets of ethical rules, or no ethical rules at all? This is an important question, as the employment of a receiver with conflicts of interest arguably violates due process.2
Depending on whom you ask, you will get a variety of responses, including some combination of the four possible answers.3 Our Supreme Court has already recognized that receivers may have impermissible conflicts of interest though it did not indicate under what code or standard the conflict is analyzed and resolved. In In re Advisory Opinion to the Governor (DEPCO),4 the Court commented: “Ordinarily, only a person who is without interest in a cause and who stands indifferent between the parties may be appointed a receiver.”5 The Court said: “[T]he Superior Court retains the authority to cure any actual conflict by removing and replacing the director [of the Department of Business Regulation] as receiver or by appointing a coreceiver to prosecute or defend the claim.” Indeed, federal courts have held that even the Federal Deposit Insurance Corporation can be accused of a conflict of interest when it acts as the receiver of a failed bank.6
This article will present the arguments for all four answers listed above and will conclude that under existing law an attorney acting as a receiver is governed by both the Rules of Professional Conduct and the Code of Judicial Conduct. The upshot of this conclusion is that attorney-receivers are governed by the same rules respecting conflicts of interest and appearances of impropriety that govern judges as well as lawyers acting in any other legal capacity. This conclusion may have some significant repercussions in Rhode Island practice given the relatively small number of lawyers who act as receivers.
Superior Court Rule 66 addresses the appointment and conduct of receivers, however, it provides no guidance on this issue (unless the absence of guidance is some indication itself). The Reporter’s Notes state: “This rule departs from the Federal rule and essentially follows the practice under Superior Court Rule 96.”7 The Note then mentions some exceptions to this statement none of which seem to bear on the ethics issue.
The Rhode Island Rules of Professional Conduct do not expressly address whether they apply to a lawyer acting as a receiver. However, Paragraph (3) of the “Preamble and Scope” of the Rules states that:
a lawyer may serve as a third-party neutral, a nonrepresentational role helping the parties to resolve a dispute or other matter. Some of these Rules apply directly to lawyers who are or have served as third-party neutrals. See, e.g., Rules 1.12 and 2.4. In addition, there are Rules that apply to lawyers who are not active in the practice of law or to practicing lawyers even when they are acting in a nonprofessional capacity. For example, a lawyer who commits fraud in the conduct of a business is subject to discipline for engaging in conduct involving dishonesty, fraud, deceit or misrepresentation. See Rule 8.4. (emphasis added)
Paragraph (5) of the “Preamble and Scope” says:
A lawyer’s conduct should conform to the requirements of the law, both in professional service to clients and in the lawyer’s business and personal affairs… .While it is a lawyer’s duty, when necessary, to challenge the rectitude of official action, it is also a lawyer’s duty to uphold legal process.
Rule 1.12(a), “Former Judge, Arbitrator, Mediator or Other Third-Party Neutral,” sets forth:
Except as stated in paragraph (d), a lawyer shall not represent anyone in connection with a matter in which the lawyer participated personally and substantially as a judge or other adjudicative officer or law clerk to such a person or as an arbitrator, mediator or other third-party neutral, unless all parties to the proceeding give informed consent, confirmed in writing.
The Comments to Rule 1.12 state:
The term “adjudicative officer” includes such officials as judges pro tempore, referees, special masters, hearing officers and other parajudicial officers, and also lawyers who serve as part-time judges. Application Canons C(2), D(2), and E(2) of the Code of Judicial Conduct provide that a continuing part-time judge, periodic part-time judge or judge pro tempore may not “act as a lawyer in any proceeding in which he served as a judge or in any other proceeding related thereto.”
Thus, the Rules seem to apply to lawyers even when they are not acting on behalf of a client in their private practice. This also includes when they are acting as a receiver, as that role is at least arguably a “parajudicial officer,” “conduct[ing] a business,” or, to some extent, perhaps, a “third-party neutral.” Notably, the Rhode Island Supreme Court requires that court-appointed receivers be admitted to practice in Rhode Island for at least five years.8 This seems to be a strong indication that the Court expects receivers to abide by the Rules of Professional Conduct.
The Rhode Island Supreme Court Ethics Advisory Panel has applied the conflict of interest provisions of the Rules of Professional Conduct to a practicing lawyer who was also a part-time municipal court judge. In Opinion No. 2003-03,9 the Panel said an attorney employed as a part-time municipal judge and his firm have a conflict of interest in representing clients in property revaluation contests with the municipality even where the municipal court has no role in the contests. Under Rule of Professional Conduct 1.7(b), before the attorney’s firm can represent clients in such contests the firm’s lawyers must reasonably believe that heir representations of the municipality and the other clients will not be adversely affected and all the clients must consent after full disclosure.
Our state courts have held that a receiver has fiduciary duties to the creditors.10 Other courts have held that receivers have fiduciary duties to the court and to the estate.11 In other words, the receiver may be a fiduciary for the court, for the receivership estate and for the creditors. Numerous courts elsewhere have held that a violation of fiduciary obligations by an attorney can also constitute a violation of the Rules of Professional Conduct.12 Moreover, the Rules may establish an attorney’s standards of fiduciary obligation. 13
A receiver is analogous to an interim trustee in bankruptcy. Conflicts of interest in bankruptcy matters are generally governed by a statute that requires a showing of an “actual” conflict, not just a “potential” conflict or the “appearance” of a conflict.14 Most of the cases interpreting this provision do so in the context of an alleged conflict of a lawyer or law firm employed by the interim trustee for some specific purpose.15 There are few cases analyzing the trustee’s or interim trustee’s alleged conflict, perhaps, because trustees rarely place themselves in such situations. However, at least one bankruptcy court has applied the Rules of Professional Conduct of the forum state as well as federal bankruptcy law in determining that an attorney acting as a trustee had an impermissible conflict of interest.16
There is an argument that the Code of Judicial Conduct also applies to receivers although they are not specifically addressed in the Code. Section A of “Application of the Code of Judicial Conduct” states:
Anyone, whether or not a lawyer, who is an officer of a judicial system and who performs judicial functions, including an officer such as a magistrate, court commissioner, special master or referee, is a judge within the meaning of the code…
The Code also applies to a “Pro Tempore Part-Time Judge” which is defined as “…a judge who serves or who is expected to serve once or only sporadically on a part-time basis under a separate appointment for each period of service or for each case heard.” Arguably, both of these definitions might include a receiver.
I know of no case specifically holding that the Code of Judicial Conduct governs receivers. However, our courts have held that a receiver is an officer of the court.17 Courts in other states have made similar holdings. In State ex rel. Hatch v. Allia Health Systems,18 the appellate court said: “The district court concluded that… the special administrators were subject to the Code of Judicial Conduct, characterizing them as court personnel similar to receivers.” In Kermit Construction Corp. v. Banco Creditor Y Poncero,19 the First Circuit observed: “The district court decided that receivers are court officers who share the immunity awarded to judges. At common law this was true…” If so, then a receiver, as an officer of the judicial system, may be subject to the Code of Judicial Conduct, if he or she performs “judicial functions.”
I am not aware of any cases addressing whether a receiver performs “judicial functions,” however, there are cases respecting analogous court officials, including the Hatch decision above. The Supreme Court of Indiana has held that a lawyer who was a “court coordinator” performed judicial functions and was subject to the Code of Judicial Conduct.20 The Supreme Court of Mississippi has held that a mayor who presided over a municipal court was a judge pro tempore and subject to the Code.21 The Supreme Court of New Jersey has held that a surrogate is a judicial officer performing important judicial functions and is subject to the Code.22 And, a California appeals court has held that referees of the Workers Compensation Appeal Board are officers of the judicial system performing judicial functions and are judges for purposes of the Code.23
Another question may be whether an attorney can be subject to both the Rules of Professional Conduct and the Code of Judicial Conduct for the same conduct as a receiver? There is at least one case holding that a magistrate who engaged in ex parte communications had violated the Code but not the Rules.24 However, there are a number of decisions holding that in some circumstances certain conduct can constitute a violation of both the Rules and the Code.25 Our Ethics Advisory Panel has indicated that lawyers who are part-time judges may be subject to both the Code and the Rules.26 Because most, if not all, receivers are also practicing law at the same time, they may be deemed subject to both ethical standards.
Are there arguments that neither ethical code applies to receivers? Receivers are not explicitly mentioned in the Code of Judicial Conduct, the receiver is arguably not adjudicating the receivership and is not paid by the judicial branch so the Code of Judicial Conduct may not apply. In addition, while a receiver may have fiduciary obligations, there is arguably no “client” to whom he or she owes professional obligations. However, as we have seen, the Rules apply to lawyers even when they are not acting as lawyers, and the Code applies to “officers of the court” which seems to include receivers though they are not specifically listed like referees and special masters. Moreover, receivers do make recommendations to the court on the approval of claims, etc. As such, they are substantially the same as special masters, referees and surrogates who are subject to the Code.
What does it mean that both the Rules of Professional Conduct and the Code of Judicial Conduct apply to attorneys acting as receivers? One significant factor is the application of the rules on conflicts of interest and appearances of impropriety. Rule 1.7 of the Rules of Professional Conduct sets forth the “General Rules” on conflicts of interest for attorneys. Subpart (a) states:
A lawyer shall not represent a client
- if the representation of that client will be directly adverse to another client; or
- there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.
Subpart (b) states:
Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if:
- the lawyer reasonably believes the lawyer will be able to provide competent and diligent representation to each affect client;
- the representation is not prohibited by law;
- the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and
- each affected client gives informed consent, confirmed in writing.
The Rhode Island Supreme Court Ethics Advisory Panel applied this provision in Opinion #95-17.27 A solo practitioner who was also a city probate judge asked whether he could represent clients before the city’s zoning board. The Panel said it “questions whether the inquiring attorney can function as an effective advocate against his/her own employer or any governmental unit that has appointive authority over his/her municipal employment.”
In Opinion #94-17,28 the Ethics Advisory Panel responded to an inquiring attorney who had previously represented for many years a lending institution that was in receivership. One of the institution’s board members wanted to retain the attorney to represent him personally in a matter commenced by the receiver. The Panel concluded that Rule 1.9, “Conflict of Interest: Former Client,” was applicable and therefore the attorney had to obtain the institution’s consent before he could represent the director.
Whose interests does the receiver represent? Judge Lagueux, who sat in the Superior Court for eighteen years before becoming a United State District Judge, addressed this issue in United States v. Federal Deposit Insurance Corp.,29 a case involving a Superior Court receivership. He said:
The receiver is ‘act[ing] on the authority of the court and for the interest of general creditors, not on the authority of the secured creditors and for their particular interests.’ [citations omitted]. Therefore, [the receiver] in this case was not acting with the consent of [the secured creditors], but instead on the authority of the Superior Court for the benefit of all the creditors when he sold the receivership property even though it was all encumbered.30
Thus, the receiver represents the interests of the general creditors. As the beneficiaries of his fiduciary obligations, they are, in a sense, his “clients,” at least, for purposes of the receivership. Accordingly, the Rules of Professional Conduct would require that before the receiver acts in a matter in which there is a secured creditor, or possibly any creditor that is his or his firm’s client, he must at the very least notify the court, the estate and other creditors and obtain their consent.
It is no answer that other attorneys in the firm represent the creditor/client, not the attorney-receiver. Rule 1.10(a) of the Rules of Professional Conduct, “Imputed Disqualification,” states: “While lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rules 1.7, 1.8, 1.9 or 2.2.” Subpart (d) of the Rule provides that “a disqualification prescribed by this rule may be waived by the affected client under the conditions stated in Rule 1.7.”
What about the Code of Judicial Conduct? Part E(1) of the Code states: “A judge shall disqualify himself or herself in a proceeding in which the judge’s impartiality might reasonably be questioned, including but not limited to instances where:
(c) the judge knows that he or she, individually or as a fiduciary, or the [judge’s family] has an economic interest in the subject matter in controversy or in a party to the proceeding or has any other more than a de minimus interest that could be substantially affected by the proceeding;
The Rhode Island Supreme Court Ethics Advisory Panel generally declines to comment on the ethical rules applicable to judges. However, it did so in Opinion 93-17 31 with respect to the Canons of Judicial Ethics then in effect. In that matter a lawyer who served as a part-time municipal court judge requested an opinion as to whether he or his law firm’s partners could represent clients whose interests were adverse to the municipality’s. The Panel noted that Canon 3E provided that a judge should disqualify himself in matter in which the judge or a lawyer with whom the judge practiced when the judge was in private practice. The Panel also mentioned Canon 2 which states judges should avoid the appearance of impropriety. The Panel ultimately declined to interpret the Canons of Judicial Ethics and said:
[T]he Rules of Professional Conduct do not otherwise impose black letter
restrictions on the judge’s law firm’s representation of clients with interests adverse to Municipality X. The law firm should, however, avoid the appearance of impropriety or the suggestion that it can influence the court on which its member sits.32
Courts have applied a variety of factors in deciding whether a judge can properly hear a matter involving a former client. For example, in Matter of Edwards,33 the Indiana Supreme Court said:
We therefore hold that it is not improper per se for a judge to preside over a case involving a former client. Rather, the inquiry should focus on whether the facts are such that the judge’s impartiality might reasonably be questioned. Jud.Canon 3 (E)( 1). The test for determining whether a judge should recuse himself or herself under this particular Canon is whether an objective person, knowledgeable of all the circumstances, would have a reasonable basis for doubting the judge’s impartiality. [Citations omitted]. In the context of a judge who has previously represented a party in an unrelated matter, there are several factors which are relevant to determining whether there exists a reasonable basis for doubting the judge’s impartiality. Relevant considerations would include the nature of the prior representation, the duration of the attorney-client relationship, the extent to which the prior representation might in some limited way be related to the current case, and the lapse of time between the prior representation and the appearance of the former client before the judge. [Citation omitted].
We further note that the commentary to the Code of Judicial Conduct also states: “A judge should disclose on the record information that the judge believes the parties or their lawyers might consider relevant to the question of disqualification, even if the judge believes there is no real basis for disqualification.” Jud.Canon 3(E)(1) (commentary, in part). This commentary reveals a separate obligation to disclose that is broader than the duty to disqualify.
Presumably, this is a closer inquiry when the “judicial officer,” or his firm, currently represent a client that is also in the litigation. In Beauregard v. Dailey,34 the Massachusetts Supreme Judicial Court held that where a relationship of attorney and client existed between a master and one of the parties to the litigation which was to be heard before the master, that was grounds for his disqualification where at time of the suit the master was attorney of record for the party in two cases not related to cause at bar.
Comparing receivers to special masters does not absolve receivers from conflict restrictions. As we have seen, the courts have recognized that special masters are subject to conflict of interest rules, as well.35 However, at least one court has said that the conflict rules may be applied more flexibly for special masters.36
A receiver is analogous to a bankruptcy trustee or interim trustee. Under the Bankruptcy Code, a trustee or interim trustee must be a “disinterested person.” The Code says:
“disinterested person” means a person that–
- is not a creditor, an equity security holder, or an insider;
- is not and was not, within 2 years before the date of the filing of the petition, a director, officer, or employee of the debtor; and
- does not have an interest materially adverse to the interest of the estate or of any class of creditors or equity security holders, by reason of any direct or indirect relationship to, connection with, or interest in, the debtor, or for any other reason. (emphasis added).37
Accordingly, decisions respecting a bankruptcy trustee may provide insight on whether receivers can be subject to conflicts of interest. The short answer is that trustees must report potential conflicts of interest to the court and can be disqualified for such conflicts.38 In In re Keller Financial Services,39 the court held the scope of disclosure required of a professional person employed by a bankruptcy trustee is much broader than the question of disqualification. The court said a professional person employed by bankruptcy trustee must disclose all facts that bear on his or her disinterestedness, and cannot usurp the court’s function by unilaterally choosing which connections impact on his or her disinterestedness and which do not.
In addition, the situation presents problems with respect to attorney-client privilege. The attorney-receiver may know confidential information about a creditor during his firm’s representation of the creditor. Moreover, information known by other lawyers in the firm may be imputed to him. The attorney-receiver may learn confidential information about the entity or person in the receivership. These two competing sets of confidential knowledge impose great pressures on the attorney. He cannot use the confidential information to the detriment of the client. However, he cannot pretend he does not know this information when zealously representing the other entity.
For example, what if the attorney-receiver learns that one of these entities has defrauded the other? Under the Rules of Professional Conduct he cannot reveal the fraud. The Supreme Court Ethics Advisory Panel addressed an analogous situation in its Opinion #93-84.40 An attorney had learned during the representation of a client that the client had allegedly forged a signature on a document that released the client from liability in a matter and that the client had allegedly forged a signature on contractual documents relating to a civil lawsuit. The attorney had withdrawn from representing the client and asked whether he could disclose the client’s actions. The Panel concluded the attorney could not disclose these actions even though he no longer represented the client. However, consider if the attorney was appointed a receiver for a business against which the former client had made a claim related to these documents? Under Rule 1.9(b), the attorney would presumably be barred from disclosing his knowledge about these documents and using that knowledge in the receivership litigation.41
The application of the conflict rules of bankruptcy may be helpful to the extent those rules are similar to the provisions of the Rules of Professional Responsibility or the Code of Judicial Conduct. However, it appears the federal courts have differing interpretations of the bankruptcy rules. At one end of the spectrum, there is a line of cases such as In re Paolino,42 holding that a trustee can be removed:
where it holds an interest adverse to the estate whether or not it acts to advance that interest. The definition of disinterestedness is the Code covers not only actual impropriety but the appearance of impropriety as
Paolino involved the disqualification of a trustee when he became affiliated with a law firm that represented interests adverse to the debtor in a different action. The court held the trustee was no longer a “disinterested person.”44 It disallowed his application for fees following that date.45 In In re Micro-Time Management Systems,46 the court disqualified an interim trustee following the United State’s Trustee’s allegation that the interim trustee agreed to a favorable settlement with a major creditor because of the interim trustee’s desire to obtain additional accounting work from the creditor. The court found the interim trustee had a conflict of interest and also disallowed his application for fees.47
At the other end of the spectrum, there are decisions that hold the trustee can be removed only upon a showing of fraud or actual injury to the estate.48 These cases reject disqualification based on “nebulous accusations…that the Trustee’s actions were not in the ‘best interests of the estate’ or had the ‘appearance of impropriety.'”49 One court has summarized the advantage of this position:
[F]orcing accusers to quickly come forward with evidence which proves fraud or actual harm to the estate protects Trustees from the threat of specious and tenuous claims for removal which are merely part of a tactical maneuver to force the Trustee not to perform his statutory duties. A more concrete standard also has the benefits of preserving the orderly administration of the estate by not allowing creditors to remove a Trustee who had merely made them unhappy.50
The Third Circuit has discussed these interpretations in In re BH & P Inc. 51 and in the context of its case, adopted what it called a middle position. In this bankruptcy matter, one debtor, the Bank of New York, objected to the fee requests of Maggio, the interim trustee, and RGZ, the law firm the trustee retained, on the grounds they had conflicts of interest and should be disqualified. There were three related bankruptcies, one filed by the corporation and two filed by its principals. The trustee appointed Maggio interim trustee for all three bankruptcies and Maggio retained RGZ as counsel for all three. On behalf of the interim trustee in the corporate bankruptcy, RGZ asserted claims against the two principals in their bankruptcies. Maggio and RGZ did not disclose to the court that they had asserted the claims. The Bank of New York argued that they had conflicts because in asserting these claims on behalf of the corporation they might reduce the assets available for recovery by the debtors in the principals’ bankruptcies.
The bankruptcy court found that Maggio and RGZ did have conflicts and that they had failed to disclose them to the court. The court disqualified them and denied their fee applications. The district court affirmed. On appeal, the Third Circuit affirmed though it disagreed with some of the lower courts’ reasoning. In doing so, the court relied heavily on a First Circuit decision, In re Martin.52
The Third Circuit first considered whether the interim trustee was a “disinterested person” as defined by the Bankruptcy Code.53 The court initially said that it was “personal interests,” such as those considered in Paolino and Micro-time Management Systems, that raise a per se impermissible conflict, not an alleged interest that arose from the trustee’s actions in his fiduciary capacity, citing O.P.M. Leasing Services, Inc.54 However, the Third Circuit rejected the line of cases that required a showing of fraud or “actual injury” before disqualifying a trustee.55 The Third Circuit said:
Strict application of this standard would not permit the bankruptcy court to remove a trustee from service where the circumstances presented do not implicate fraud or result in actual injury to the estate but are, nonetheless, highly suggestive of irregularity. Arguably, the standard also prevents a court from taking prophylactic action where the likelihood of injury is great but no harm is manifest.56
The court said the best standard was set forth in In re Martin:
The test must be an objective one. The question is not necessarily whether a conflict exists-although an actual conflict of any degree of seriousness will obviously present a towering obstacle-but whether a potential conflict, or the perception of one renders the [trustee’s] interest materially adverse to the estate or the creditors.57
The court said: “There must be at a minimum full and timely disclosure of any given arrangement. Armed with knowledge of all the relevant facts, the bankruptcy court must determine, case by case, whether [the situation] can be tolerated under the particular circumstances.”58 The Third Circuit rejected Maggio’s and RGZ’s argument that they had made adequate disclosures of the pertinent facts when they were appointed. “The ‘subjective good faith efforts’ of the parties involved are ‘irrelevant.’ [citation omitted]. Rather, once a potential conflict is identified…it must be disclosed to the court.”59 In other words, the potential conflict must be disclosed even if it arises after the trustee’s appointment.
The Third Circuit observed that the term “actual conflict of interest” is not defined in the Code and has been given meaning by the courts.60 The court affirmed the district court determination that the “actual” conflict was “the possibility that the parties would favor one estate over the other in their attempt to serve all of them.” (emphasis added).61
In conclusion, a request to appoint a particular person as a receiver should represent in writing that either that the receiver and his or her firm do not represent the estate or any known creditors or debtors of the estate or others with a significant relationship to the entity or person in receivership, or it should identify those related businesses or entities the proposed receiver does represent. Moreover, during the pendency of the receivership, the receiver should disclose when such a relationship arises or becomes known. The other parties may then evaluate whether they believe there is a significant conflict of interest or other ethical issue and object to the receiver’s involvement. The court will also have the appropriate information upon which to make a determination under the Rules of Professional Conduct and the Code of Judicial Conduct. Decisions interpreting federal bankruptcy standards may provide helpful insights.
1 See, e.g., R.I.G.L. §6-13.1 -5 (deceptive trade practices); §6-16-7 (fraudulent transfers); §§7-1.2-1316, 7- 1 .2-1323 (business corporations generally); §7-11-603 (securities violations); §10-5-42 (attachments of property); §19-12-1, et seq. (financial institutions); §23-17.11-1, et seq. (nursing facilities); Super.R.Civ.P. 66.
2 See, Edwards v. Balisok, 520 U.S. 641, 117 S.Ct. 1584 (1997); In re Advisory Opinion to Governor (DEPCO), 593 A.2d 943 (R.I. 1991); Davis v. Wood, 427 A.2d 332 (R.I. 1981).
3 The author asked the Supreme Court’s Ethics Advisory Panel to provide an opinion on this issue. By a letter dated November 13, 2008, the Panel declined to render an opinion because the request was outside its jurisdiction.
4 593 A.2d 943 (R.I. 1991).
5 Id. at 952-53, quoting, 65 Am.Jur.2d, “Receivers,” §133 at 963 (1972).
6 See, e.g., FDIC v. Haynes, 3 F.Supp.2d 155 (D.Conn. 1997); Branch v. FDIC, 825 F.Supp. 384 (D.Mass. 1993).
7 Superior Court Rule 96 no longer exists.
8 Links no longer available.
9 Links no longer available.
10 Francis v. Buttonwood Realty Co., 765 A.2d 437 (R.I. 2001) (receiver has a fiduciary duty to creditors); In re Hoffman, 65 B.R. 985 (Bkrtcy.D.R.I. 1986) (receiver is a fiduciary).
11 See, also, Fleet National Bank v. H&D Entertainment, Inc., 926 F.Supp. 226 (D.Mass. 1996)(“receivers are bound by fiduciary obligations to the court appointing them and to the estates they serve”); American Bridge Products, Inc., 328 B.R. 274 (Bkrtcy.D.Mass. 2005) (receiver of a corporation is a fiduciary); Ames v. American National Bank of Portsmouth, 163 Va. 1, 176 S.E. 204 (1934) (Proceeds that a receiver of a corporation collects from a stockholder are held by him as trustee for creditor and the stockholder, not for the benefit of the corporation).
12 See, e.g., Handy v. Pelland, 73 F. 3d 397 (D. C. Cir. 1996); In re Vebeliunas, 231 B.R. 181 (Bkrtcy.S.D.N. Y. 1999); Ulico Casualty Co. v. Wilson, Elser, Moskovitz, Edelman & Dicker, 56 A.D. 3d 1, 865 N. Y.S.2d 14 (N. Y.A.D. 2008); contra, In re Owens, 144 Ill.2d 372, 581 N.E.2d 633 (1991).
13 See, Avianca v. Corriea, 705 F.Supp. 666 (D.D. C. 1989); Matter of Green Charitable Trust, 172 Mich.App. 298, 431 N. W.2d 492 (Mich.App. 1988).
14 11 U.S.C. §327(c).
15 See, e.g., Tri-State Financial LLC v. Loval, 525 F.3d 649 (8 Cir. 2008).
16 In re Grieb Printing Co. Inc., 297 B.R. 82 (Bkrtcy. W.D. Ken.th 2003) (attorney-trustee required to disgorge trustee’s fee for conflict of interest). See, also, In re Vebeliunas, 231 B.R. 181 (Bkrtcy.S.D.N. Y. 1999) (bias of Chapter 7 trustee’s counsel against debtor constituted a lack of disinterestedness under the Bankruptcy Code, was impossible to reconcile with his fiduciary obligations to the debtor as well as his duty under the Code of Professional Responsibility to avoid even the appearance of impropriety).
17 See, State v. Fiore, 497 A.2d 298 (R.I.1985) quoting, Manchester v. Manchester, 94 R.I. 400, 181 A.2d 235 (1962) (“Courts in general accept the view that a receiver appointed by a court of equity is an officer thereof…”); South County Sand & Gravel Co. v. Bituminous Pavers Co., 108 R.I. 239, 274 A.2d 927 (1971) (receiver is an officer of the court); Rhode Island Hospital Trust Co. v Rhode Island Covering Co., 95 R.I. 30, 182 A.2d 438 (1962) (same).
18 679 N. W.2d 400 (Minn.App. 2004).
19 547 F.2d 1 (1st Cir. 1976).
20 State ex rel. Kaufman v. Lake Circuit Court, 768 N.E.2d 431 (Ind. 2002).
21 Mississippi Judicial Performance Commission v. Thomas, 549 So.2d 962 (Miss. 1989).
22 Clark v. DeFino, 80 N.J. 539, 404 A.2d 621 (1979).
23 Fremont Indemnity Co. v. Workers Compensation Appeals Board, 153 Cal.App.3d 965, 200 Cal.Rptr. 762 (Cal.App. 1984).
24 People v. Gilbert, 173 P.3d 1113 (Colo. O.P.D.J. 2007).
25 Bishop v. Albertson ‘s, Inc., 806 F.Supp. 897 (E.D. Wash. 1992)(law clerks bound by both Rules and Code); Stretton v. Disciplinary Board of the Supreme Court of Pennsylvania, 763 F.Supp. 128 (E.D.Pa. 1991); In re Gaudet, 922 So.2d 477 (La. 2006); In re Breslin, 171 N.J. 235, 793 A.2d 645 (N.J. 2002); Matter of White, 330 S.C. 505, 499 S.E.2d 813 (1998).
26 See, Opinion #93-17, infra, n.31.
27 Links no longer available.
28 Links no longer available.
29 899 F.Supp. 50 (D.R.I. 1995).
30 Id. at 56.
31 Links no longer available.
32 This Opinion seems inconsistent with the Panel’s Opinion in #95-17 issued two years later.
33 694 N.E.2d 701 (Ind. 1998).
34 294 Mass. 315, 1 N.E.2d 481 (1936).
35 In re Joint Eastern and Southern Districts Asbestos Litigation, 737 F.Supp. 735 (E.D.N. Y. and S.D.N. Y. 1990) (In general, a special master or referee should be considered a judge for purposes of judicial ethics rules); Deland v. Township of Berkeley, 351 N.J.Super. 1, 824 A.2d 185 (N.J. Super. 2003).
36 Venetian Casino Resort, LLC v. Eighth Judicial District Court of the State of Nevada, 118 Nev. 124, 41 P.3d 327 (2004) (Because special masters are frequently attorneys, accommodation regarding conflicts of interest is required to account for the likelihood that special masters will be engaged as advocates in matters other than those in which they serve as special masters).
37 11 U.S.C. §101 (1 4).
38 See, In re Grieb Printing Co., Inc. 297 B.R. 82 (Bkrtcy. W.D. Ken. 2003); In re Keller Financial
Services of Florida, Inc., 243 B.R. 806 (Bkrtcy.M.D.Fla. 1999).
39 Supra, n.38.
40 Links no longer available.
41 See, Ethics Advisory Panel Opinion #94-17, supra, n.28.
42 80 B.R. 341 (Bankr.E.D.Pa. 1987).
43 Id. at 345 (Bankr.E.D.Pa. 1987); see, also, In re Micro-Time Management Systems, 102 B.R. 602, 605 (Bankr.E.D.Mich. 1989); In re O.P.M. Leasing Services, 16 B.R. 932, 937 (Bankr.S.D.N. Y. 1982).
44 80 B.R. at 345-46.
45 Id. at 347.
46 Supra, n.43.
47 102 B.R. at 608.
48 See, e.g., Tri-State Financial LLC v. Loval, 525 F.3d 649 (8th Cir. 2008); In re Freeport Italian
Bakery, Inc., 340 F.2d 50 (2nd Cir. 1965); In re Acadiana Electrical Service, Inc., 60 B.R. 164, 165
(Bankr. W.D.La. 1986).
49 In re Peckinpaugh, 50 B.R. 865, 867 (Bankr.N.D. Ohio 1985).
51 In re BH & P Inc., 949 F.2d 1300 (3rd Cir. 1991); see, also, In re AFI Holding, Inc., 530 F.3d 832 (9th Cir. 2008).
52 817 F.2d 175 (1st Cir. 1987).
53 11 U.S.C. §101 (1 4).
54 16 B.R. 932, 938 (Bankr.S.D.N.Y. 1982)
55 See, e.g., In re Acadiana Electrical Service, Inc., 66 B.R. 164 (Bankr. W.D.La. 1986).
56 949 F.2d. at 1312.
57 Id. at 1312, quoting Martin, 817 F.2d at 181-83.
59 Id. at 1317 quoting In re BH & P, Inc., 119 B.R. 35, 44 (D.N.J. 1990).
60 Id. at 1315.