How have the courts disqualified counsel that has a conflict of interest with the estate?

MultiRegion, United States of America

The following excerpt is from AroChem Corp., In re, 176 F.3d 610 (2nd Cir. 1999):

Appellants' citation to Roger J. Au & Son v. Aetna Ins. Co., 64 B.R. 600 (N.D.Ohio 1986), is unavailing. There, the court disqualified counsel that had an actual conflict with the estate. The court opined that any counsel that failed the "disinterested" test because it had an interest adverse to the estate automatically failed the section 327(a) adverse interest test, and thus, for the purpose of such an inquiry, " 'having' an interest adverse to the estate, and 'holding or representing' an interest adverse to the estate are identical considerations." Id. at 604.

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