In Re Lee

94 B.R. 172 (1989)

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Nature of the Case

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Facts

Chile and Hae Sook Lee filed Chapter 11 on August 23, 1988. They are the sole shareholders of Seoul Corporation, which filed Chapter 11 on August 16, 1988. Seoul Corporation is engaged in the sale of general merchandise and costume jewelry at wholesale. Both of the petitions were signed by Jang W. Lee, as counsel for debtors. There is a substantial overlap of creditors between the individuals and the corporation. The debtors in each case have filed an application for the appointment of the law firm Lee, Scott & Young (LSY), in which Jang W. Lee is a partner, as general counsel for the debtors. Jang has received a retainer of $2,500 to represent Chile and his wife and he has received no retainer for representing Seoul Corporation. The employment applications also make no disclosure of the relationship between these two cases, or that LSY is seeking employment in both of them, notwithstanding the conflicts that such employment could raise. Jang's employment application in each case states: 1. To the best of my knowledge, I am not connected with the debtors, their creditors, or any other party in interest except that I am the attorney for the debtors in this Chapter 11 case . . . . 2. No member or associate of this law firm represents any interest in this estate, adverse or otherwise, except the interest of the applicants. The court discovered the parallel applications. The court issued an order to show cause why LSY should not be disqualified in both cases because of its failure to disclose the parallel employment applications.