Question What do you think?

[BKLaw11]

So all, here is an ethics issue that I would be interested in input from attorneys and laypeople alike.

I am an attorney that practices bankruptcy law. As attorneys know, you meet with clients and some decide to go elsewhere. I had a meeting with a potential client who owned a large collection of high priced objects. Because of this large collection, they were on the verge of not being able to file a Chapter 7 case because of exemption issues. I asked him to get an appraisal of all these items to better understand how much they were worth. He signed an agreement with me and left some of his paperwork with me. During the meeting, he acted shifty and I could tell he was hesitant to tell me about this collection of items at all. A few days later, I received a call from him asking for his file of paperwork back because he "didn't want to lose his collection". I explained that he wouldn't necessarily lose his collection at all, just that I wanted to make sure we had a correct value on the collection for exemption purposes. As some of these people are, he wasn't the smartest chip and I doubt he was listening or comprehending anything I was saying. Our office returned the file and nothing was heard from him again.

Move to a few months later, I was in court attending 341 meetings with my clients and come to see him sitting there waiting for his attorney for a chapter 7 341. I highly suspect he probably lied to his new attorney about this collection of items and didn't disclose these items at all. I did not speak with him at his hearing and did not attend his hearing as I was busy with my own clients.

Now for the ethical issue, what would you do? Look up his petition to see what's on there? Talk to his current attorney to see what was disclosed? Report him for bankruptcy fraud? Do you think there's a moral responsibility here? I've been going back and forth on this issue for a few weeks now and some other perspectives would be helpful.

[tobee43]

your kidding me right???? come on bklaw...i have worked for excellent atty's and really lousy ones..and while i KNOW for a fact atty's talk amongst each other about their clients.... you are still ethically obliged to maintain this person's confidence.......or are you???? he signed an agreement with you....so you are still bound by that i would think.

you apparently scared him enough that he learned to HIDE his assets from his "next" atty.

if you want to be nasty...turn him in....the court most likely would have to assign "special" council to find out where he hid his assets...and you would cause him most likely a life full of misery....or you can let it go and get some good karma coming your way??? LOL!!!

me...i'd turn his ass in!! or at least speak with the other atty...(i'm ONLY a paralegal tho...so it wouldn't much matter.)

[chrisdfw]

I am not sure about this, I don't know about your ethical standards for attorneys.

Reviewing the situation all you know is that he switched attorneys. Nothing more. He could have sold his collection, valued it properly, hidden it, transferred it, etc. Without looking at the petition I am not sure you have enough to violate confidentiality and say anything.

Be careful about taking a look, once you do, your hands may be tied. Be prepared to deal with the hassles if you go poking around. If you don't know anything, you have no justification to break confidence, at least as far as I know.

You probably don't have a duty to investigate, but may have a duty if you find out something. So do you want to find out?

[tobee43]

I am not sure about this, I don't know about your ethical standards for attorneys.

Reviewing the situation all you know is that he switched attorneys. Nothing more. He could have sold his collection, valued it properly, hidden it, transferred it, etc. Without looking at the petition I am not sure you have enough to violate confidentiality and say anything.

Be careful about taking a look, once you do, your hands may be tied. Be prepared to deal with the hassles if you go poking around. If you don't know anything, you have no justification to break confidence, at least as far as I know.

You probably don't have a duty to investigate, but may have a duty if you find out something. So do you want to find out?

yes, i think the key here is bklaw11 didn't say if 6 months had passed..it was a "few" months....if it did i would like he or she would know it was moot anyway....

[BKLaw11]

This case has definitely not been discharged yet. He was never my client, never paid any money, simply signed the initial agreement. While what he told me is likely protected with attorney-client confidentiality if you wanted to argue about it, bankruptcy fraud is a serious issue. There is no way he would be able to sell off this collection without having significant amounts of cash on hand, again putting him above the exemptions.

My question was along the moral lines. I am an excellent attorney and I insist on all my client's cases being absolutely accurate. I do not hide assets for clients and always have proof backing up any valuations, especially for things like collections. This is to protect my client's assets. Yes, it would be "nasty" to report him, even anonymously, given that it would give him a lot of trouble. But my feelings are that if he is committing bankruptcy fraud, a serious offense, he has brought it on himself. I have been hesitant to look up his petition, just because I don't want to get into this any further. But it is nagging at me. Since he was hesitant to even tell me about the collection, I am almost positive he probably just jumped firms and hid his assets. Never a good idea to keep things from your attorney folks.

[df04527]

Morals and ethics outweigh anything else. I am very funny about that and have been known to place my entire career on the line with a fortune 12 company over just those types of issues. I would be losing sleep if I were in your shoes and would have to pull up his case to even see if there is a problem. If there is a problem then I would more than likely have to do what I had to do.

You are an officer of the court. To me there is no question.

[tobee43]

This case has definitely not been discharged yet. He was never my client, never paid any money, simply signed the initial agreement. While what he told me is likely protected with attorney-client confidentiality if you wanted to argue about it, bankruptcy fraud is a serious issue. There is no way he would be able to sell off this collection without having significant amounts of cash on hand, again putting him above the exemptions.

My question was along the moral lines. I am an excellent attorney and I insist on all my client's cases being absolutely accurate. I do not hide assets for clients and always have proof backing up any valuations, especially for things like collections. This is to protect my client's assets. Yes, it would be "nasty" to report him, even anonymously, given that it would give him a lot of trouble. But my feelings are that if he is committing bankruptcy fraud, a serious offense, he has brought it on himself. I have been hesitant to look up his petition, just because I don't want to get into this any further. But it is nagging at me. Since he was hesitant to even tell me about the collection, I am almost positive he probably just jumped firms and hid his assets. Never a good idea to keep things from your attorney folks.

well...nice to see you actual have morals!! LOL!! i mean that only in the best way.

you need to really do what you know is "right".....apparently, you are torn because, you actual "feel"...you know many atty's treat their clients like cattle, apparently, you do not, and you want to live by the letter of the law attached with this moral issue.

i believe you need to do what you feel is "right"... however, of course, posing this type of question on a forum such as this you may and will get different views or points of view. however, the final decision is yours and yours alone....do what you KNOW and THINK is right for YOU....fraud, is indeed serious...extremely, and it's because of those that committed fraud that the bk laws were revised in the first place...we don't need that happening again any time in the near future with the economic state of this country and with so many really truthfully and honestly filing within the spirit of the law of bk.

as i stated above....i would report him or at least advise his present atty.

[tobee43]

Never a good idea to keep things from your attorney folks

well, i really honestly mean no disrespect....however for me it's my accountant more than my atty...;)

[justbroke]

Now for the ethical issue, what would you do? Look up his petition to see what's on there? Talk to his current attorney to see what was disclosed? Report him for bankruptcy fraud? Do you think there's a moral responsibility here? I've been going back and forth on this issue for a few weeks now and some other perspectives would be helpful.

Unless you know that an actual fraud was committed, you have no moral, ethical, or legal obligation to report anything. If your curious and serious about bankruptcy fraud, you could look up the petition, but where is the line from an attorney-client privilege standpoint. Did the agreement not make him your client or at least gave the perception that the person was your client? Either way, it's certainly a fine line.

Unless I was in the 341 Meeting and actually heard him deny having any such property, or I decided to review his petition on CM/ECF (PACER), I would leave it where it lies. That is within the hands of the Panel Trustee and Office of the United States Trustee. I guess I'm saying that I wouldn't report this on mere speculation. I would want to "know" that there are inconsistencies. I don't think it becomes a dilemma until you actually review the petition (or had attended the 341 Meeting and heard convincingly that assets were hidden).

So, it boils down to this... should you look at the filed petition? That's the only real question. The rest is self-evident if you decide to look and find inconsistencies.

[dneil]

and I also am not trying to sound nasty, but are you sure that you aren't a little bit resentful because he didn't hire you? kidding... kidding

[meateater]

this person came to you as an attorney, he's not some random person who gave you all this information at a cocktail party. You ought to consult with the govenrment people who license attorneys as to whether you can ethically reveal what this potential client said to you because you think he may be committing fraud (didn't the john grisham novel, the firm, ultimately turn on revealing client confidences?) I always thought attorneys were required to maintain client confidences, which includes whatever the attorney is told when a person is deciding whether to become a client, and I thought attorneys just turned away potential clients who seemed to shady.

If you decide to "report' this potential client, use your name: you might be completely mistaken about what's going on, and just create a big mess for him with no way for him to resolve it if he doesn't know the source of the report. And since he didn't hire your firm, an anonymous report just seems like source grapes, if you feel morally bound to report, you should have no qualms about using your name.

[despritfreya]

I have not read any of the above posts but I can tell you this:

You, as an attorney CANNOT disclose any conversation you had with this potential client. All communication you had (even if he did not hire you) is protected by attorney-client privilege. The privilege belongs to the client not you. If you disclose, regardless of the "moral issue", you could face disbarment.

Now I will go back and read the other responses.

Des.

[tobee43]

I have not read any of the above posts but I can tell you this:

You, as an attorney CANNOT disclose any conversation you had with this potential client. All communication you had (even if he did not hire you) is protected by attorney-client privilege. The privilege belongs to the client not you. If you disclose, regardless of the "moral issue", you could face disbarment.

Now I will go back and read the other responses.

Des.

yes, but op is saying he/she was never hired??? although an agreement was signed???

don't you think des, this signed agreement would take precedence on the confidentiality issue?

maybe he/she took a different bar than you?? LOL!!

[HHM]

I briefly perused the ABA Model Rules of Professional Conduct http://www.abanet.org/cpr/mrpc/mrpc_toc.html

I don't think you run afoul by keeping your mouth shut. Suspicion is different than KNOWING. The main rules at issue are 1.6 (confidentiality), 1.18 (duties to prospective clients) and 3.3. (Candor toward the tribunal). I don't think you disclose anything; nor do you have a duty to investigate further. The issue is really the other's lawyers problem at this point. I don't think you have a duty to proactively say anything.

The thornier issue arises if you were ever called in for 2004 exam or as a witness.

[despritfreya]

yes, but op is saying he/she was never hired??? although an agreement was signed??? don't you think des, this signed agreement would take precedence on the confidentiality issue?

HHM hit on the issue by quoting the Model Rules.

I have dealt with this issue on occasion. Due to the type of practice I am involved in, many who come for a consultation do not come back after disclosing to me various, shall we say, indiscretions. On occasion I have discovered that they filed using a different attorney or, even pro se. I know (without checking) that they did not disclose, disclose, disclose. However, what they told me at the consultation is protected by the privilege and I have a duty not to violate the privilege. Sometimes this pisses me off but. . .

Des.