Does an attorney owe a fiduciary duty to his client to act as a creditor when his client files for bankruptcy?

MultiRegion, United States of America

The following excerpt is from Greer West Inv. Ltd. Partnership, In re, 81 F.3d 168 (9th Cir. 1995):

2 It noted, for instance, that an attorney owes a fiduciary duty to his client, which might prohibit him from acting independently as a creditor when his client files for bankruptcy. This general concern finds some support in our caselaw. See Stoumbos v. Kilimnik, 988 F.2d 949, 959 (9th Cir.) (concluding that a corporate executive's waiver of the debtor corporation's right to collateral was inequitable with respect to other creditors both because he was an insider of the corporation and because he had a fiduciary duty to it), cert. denied, 114 S.Ct. 190 (1993). We think, however, that when the alleged insider does not fit within the explicit statutory examples, the better approach is to look to the actual dealings of the debtor and the purported insider.

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