11 U.S. Code § 327 - Employment of professional persons
Section 327(a) of the House amendment contains a technical amendment indicating that attorneys, and perhaps other officers enumerated therein, represent, rather than assist, the trustee in carrying out the trustee’s duties.
Section 327(c) represents a compromise between H.R. 8200 as passed by the House and the Senate amendment. The provision states that former representation of a creditor, whether secured or unsecured, will not automatically disqualify a person from being employed by a trustee, but if such person is employed by the trustee, the person may no longer represent the creditor in connection with the case.
Section 327(f) prevents an examiner from being employed by the trustee.
This section authorizes the trustee, subject to the court’s approval, to employ professional persons, such as attorneys, accountants, appraisers, and auctioneers, to represent or perform services for the estate. The trustee may employ only disinterested persons that do not hold or represent an interest adverse to the estate.
Subsection (b) is an exception, and authorizes the trustee to retain or replace professional persons that the debtor has employed if necessary in the operation of the debtor’s business.
Subsection (c) provides a professional person is not disqualified for employment solely because of the person’s prior employment by or representation of a secured or unsecured creditor.
Subsection (d) permits the court to authorize the trustee, if qualified to act as his own counsel or accountant.
Subsection (e) permits the trustee, subject to the court’s approval, to employ for a specified special purpose an attorney that has represented the debtor, if such employment is in the best interest of the estate and if the attorney does not hold or represent an interest adverse to the debtor of the estate with respect to the matter on which he is to be employed. This subsection does not authorize the employment of the debtor’s attorney to represent the estate generally or to represent the trustee in the conduct of the bankruptcy case. The subsection will most likely be used when the debtor is involved in complex litigation, and changing attorneys in the middle of the case after the bankruptcy case has commenced would be detrimental to the progress of that other litigation.
Subsection (c) is an additional exception. The trustee may employ as his counsel a nondisinterested person if the only reason that the attorney is not disinterested is because of his representation of an unsecured creditor.
1986—Subsec. (b). Pub. L. 99–554, § 257(e)(1), which directed the insertion of “, 1202,” after “section 721,” was executed by making the insertion after “section 721” to reflect the probable intent of Congress.
Subsec. (c). Pub. L. 99–554, § 257(e)(2), which directed the insertion of “, 12,” after “section 7,” was executed by making the insertion after “chapter 7” to reflect the probable intent of Congress.
Pub. L. 99–554, § 210, inserted “or the United States trustee” after “another creditor”.
1984—Subsec. (c). Pub. L. 98–353 substituted “In a case under chapter 7 or 11 of this title, a person is not disqualified for employment under this section solely because of such person’s employment by or representation of a creditor, unless there is objection by another creditor, in which case the court shall disapprove such employment if there is an actual conflict of interest.” for “In a case under chapter 7 or 11 of this title, a person is not disqualified for employment under this section solely because of such person’s employment by or representation of a creditor, but may not, while employed by the trustee, represent, in connection with the case, a creditor.”
Effective date and applicability of amendment by section 210 of Pub. L. 99–554 dependent upon the judicial district involved, see section 302(d), (e) of Pub. L. 99–554, set out as a note under section 581 of Title 28, Judiciary and Judicial Procedure.
Amendment by section 257 of Pub. L. 99–554 effective 30 days after Oct. 27, 1986, but not applicable to cases commenced under this title before that date, see section 302(a), (c)(1) of Pub. L. 99–554.
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