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In re Michigan Interstate Railway Co.

Citations: 38 B.R. 363; 10 Collier Bankr. Cas. 2d 1077; 1983 Bankr. LEXIS 5475; 11 Bankr. Ct. Dec. (CRR) 984Docket: Bankruptcy No. 83-00054

Court: District Court, E.D. Michigan; September 7, 1983; Federal District Court

Narrative Opinion Summary

In this case, the successor trustee for the Michigan Interstate Railway Company, Inc., sought court approval to appoint a specific law firm as counsel. The application was filed after prior counsel appointments were vacated and denied, with no appeal filed against these decisions. The primary legal issue revolved around the ethical implications under Bankruptcy Rule 5002, which addresses potential conflicts of interest in counsel appointments. The court emphasized the importance of avoiding any appearance of impropriety and preventing actions that could be seen as 'judge-shopping.' Despite acknowledging the competence of the law firm, the court denied the application solely on ethical grounds, underscoring the necessity of upholding judicial ethics. As a result, the trustee's request to appoint Honigman, Miller, Schwartz, Cohn as counsel was ultimately rejected, maintaining the court's commitment to ethical practice and judicial integrity.

Legal Issues Addressed

Appointment of Counsel under Bankruptcy Rule 5002

Application: The trustee's application to appoint a specific law firm as counsel was evaluated under Bankruptcy Rule 5002, which addresses potential conflicts of interest and the appearance of impropriety.

Reasoning: The trustee's application raised concerns under Bankruptcy Rule 5002, which addresses potential conflicts of interest regarding appointments of counsel.

Judicial Ethics and Appearance of Impropriety

Application: The court denied the trustee's application to appoint counsel due to the importance of maintaining judicial ethics and avoiding any appearance of impropriety.

Reasoning: The judge emphasized the importance of avoiding any appearance of impropriety, irrespective of whether he had directed or suggested the trustee retain his former firm.

Prohibition of Judge-Shopping

Application: The court underscored the need to prevent actions that could be perceived as 'judge-shopping,' reinforcing the court's commitment to ethical standards.

Reasoning: The court expressed that it could not allow any action that could be perceived as 'judge-shopping' and reiterated that the policy considerations regarding judicial ethics precluded him from sanctioning the appointment...