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L.B.R. 9010-1. Attorneys

(a)  Standards of Professional Conduct.  The Local Rules of Practice of the United States District Court for the District of Colorado, Section V - Attorney Rules will apply in this Court, except as provided by order or rule of this Court.

(b)  Admission.

(1)  Attorneys Admitted to the United States District Court for the District of Colorado.  An attorney admitted and in good standing to practice in the United States District Court for the District of Colorado is qualified to practice in this Court. 

(2)  Attorneys Not Admitted to United States District Court for the District of Colorado. 

(A) Admission to the United States District Court for the District of Colorado pro hac vice is no longer available.  An attorney must comply with the Local Rules of Practice of the United States District Court for the District of Colorado, Section V – Attorney Rules (including admission) in order to appear before this Court. 

(B) Local Counsel.  When an attorney is located outside of Colorado and does not have an office in Colorado, the Court, in its sole discretion, may impose additional requirements for practice before the Court, including that such out-of-state counsel retain local counsel qualified to practice before this Court.

(c)  Scope of Representation/Employment; Limited Unbundling.

(1)  Attorney Representation of a Debtor.  Representation of a debtor by an attorney before this Court constitutes an entry of appearance for all purposes in the debtor’s bankruptcy case, except as provided in L.B.R. 9010-1(c)(2).  While the attorney remains attorney of record for the debtor in the bankruptcy case, the attorney has a duty to advise the debtor on all bankruptcy matters that arise during the course of the bankruptcy case and to represent the interests of the debtor in connection with the bankruptcy case that may affect the debtor, the debtor’s property and, in the case of reorganization proceedings, property of the estate.  An attorney may not circumvent this Rule by limiting services in his or her client engagement letter or in the attorney’s disclosures filed in accordance with Fed. R. Bankr. P. 2016.

(2)  Limited Unbundling.

(A) Adversary Proceedings.  A debtor’s attorney may expressly exclude adversary proceedings from the scope of the engagement; however, if engaged as the attorney in an adversary proceeding, an attorney may not exclude services within that adversary proceeding.

(B) Ethical Limitations.  Nothing in this Rule requires debtor’s attorney to file a paper or advance a position contrary to the attorney’s obligations under Fed. R. Bankr. P. 9011.  In those circumstances in which debtor’s attorney has fulfilled his or her obligations to advise the debtor, but has determined not to file a responsive paper or otherwise advance a position, either in agreement with the debtor or contrary to the debtor’s wishes but in compliance with Rule 9011, then debtor’s attorney must file a Notice of Advisement in substantial conformity with L.B.F. 9010-1.1, as set forth in L.B.R. 9010-1(c)(6).

(C) Nonpayment of Fees.  If the debtor fails to pay debtor’s attorney for services rendered or to be rendered, the attorney may move to withdraw his or her appearance for the debtor in accordance with L.B.R. 9010-4, except:

(i)    An attorney for the debtor may not withdraw prior to completion of the Basic Services, as defined in L.B.R. 9010-1(c)(5), except upon a showing of good cause.

(ii)  While a motion to withdraw is pending, the attorney must continue to perform for the debtor all Necessary Services, as defined in L.B.R. 9010-1(c)(4).  These services may not be limited to the Basic Services.

(3)  Ghostwriting and BPP Services by Attorney Prohibited.  An attorney may not assist any party with the preparation of a bankruptcy petition or any document required under Fed. R. Bankr. P. 1007 for filing in a bankruptcy case, without signing the document, except an attorney may provide pro bono services and advice under a nonprofit organization or Court-approved program to an individual anticipating the filing of a voluntary petition without signing any document, entering an appearance, or continuing representation of the individual in the bankruptcy case after filing.  An attorney may not serve as a bankruptcy petition preparer, as defined under 11 U.S.C. § 110(a)(1).

(4)  Necessary Services.  Necessary Services refers to all services that are necessary to represent the interests of the debtor in a particular case.

(5)  Basic Services.  Absent a Court order to the contrary, a debtor’s attorney may not move to withdraw as attorney prior to completion of the following services (the “Basic Services”):

(A) meeting with the debtor, advising the debtor, and analyzing the needs of the case;

(B) preparing a complete filing package as required by Fed. R. Bankruptcy Rule 1007 and any necessary amendments thereto;

(C) attending the debtor’s meeting of creditors pursuant to 11 U.S.C. § 341 and any continued meetings of the same;

(D) advising and assisting the debtor with any trustee requests for turnover and any audit requests from the United States Trustee;

(E) advising the debtor regarding any reaffirmation agreements; and

(F)  in a chapter 13 proceeding, a debtor’s attorney may not exclude from his or her representation the Basic Services or any Necessary Services, whether such services are required before or after the confirmation of debtor’s plan of reorganization, except as set forth in L.B.R. 9010-1(c)(2).  However, nothing in this Rule prohibits an attorney from charging the debtor additional fees for services not contemplated by the original fee agreement between the debtor and debtor’s attorney.

(6)  Notice of Advisement.  Filing a Notice of Advisement is only permitted when the attorney cannot advance a position due to ethical constraints or because the debtor has advised the attorney that the debtor does not wish to oppose the requested relief.  When required by L.B.R. 9010-1(c)(2)(B), debtor’s attorney must file a Notice of Advisement in substantial conformity with L.B.F. 9010-1.1 and serve it on the debtor and opposing counsel on or before three days prior to the objection deadline for the pending motion or request for relief.  Such notice must advise the Court and interested parties that:

(A) after consultation with the client, no further action will be taken by the attorney as to the specific matter; and

(B) whether opposing counsel may communicate directly with the debtor concerning the matter.

(7)  Sanctions for Violations; Standing.  After notice and hearing, the Court, acting sua sponte or on a motion filed by any interested party, may impose monetary or other sanctions against an attorney for violations of L.B.R. 9010-1(c), including an award of reasonable attorney fees.  Repeated violations may be grounds for prohibiting the attorney from practicing before the Court.

(d)  Disciplinary Matters.  The bankruptcy judges of this Court may refer issues relating to professional responsibility or other disciplinary matters to the Disciplinary Panel or Committee on Conduct of the United States District Court for the District of Colorado pursuant to the Local Rules of Practice of the United States District Court for the District of Colorado, or any other grievance committee of any bar or court of which the attorney in question may be a member.

(e)  Representation of a Corporation, Partnership, Other Unincorporated Organization, or Entity.  No corporation, partnership, other unincorporated organization, or entity may file a petition under Title 11 of the United States Code, or otherwise appear in cases or proceedings before this Court, unless it is represented by an attorney authorized to practice in this Court.  Where a corporate debtor is involved, the attorney representing such an entity must sign the petition and pleadings.

(f)   Entry of Appearance.  Attorneys who enter appearances in a case will be placed on the Creditor Address Mailing Matrix for the case as a party in interest and will receive only copies of notices, orders, and other documents to which parties in interest may be entitled pursuant to Fed. R. Bankr. P. 2002 or these Rules.

 

Commentary

 

L.B.R. 9010-1(c)(1), Scope of Representation:  This subsection prohibits the debtor’s attorney from unbundling legal services except as expressly permitted by subsection (c)(2).  The Rule intends to allow debtor’s attorney flexibility in setting his or her fee arrangements.  For example, an attorney may charge a flat fee for the Basic Services (defined in subsection (c)(5)) and then charge hourly thereafter or an attorney may charge hourly for all services rendered.  What this Rule prohibits, however, is charging a set fee for the Basic Services and then refusing to provide additional services as they become necessary in the case unless the debtor agrees to pay in advance for additional services, while still remaining attorney of record.  If the debtor fails to pay for additional services, the attorney may move to withdraw, but he or she cannot remain attorney of record and refuse to provide services.  Such practices (of remaining attorney of record but refusing to represent the debtor on some matters) have prevented the debtor from being able to speak directly with opposing counsel on a matter on which debtor’s attorney is not representing the debtor, such as relief from stay motions on mortgages and car loans.  Nor may an attorney agree to perform only pre-confirmation services in a chapter 13 case and then refuse to provide post-confirmation services.  As long as the attorney remains attorney of record, the attorney must provide all Necessary Services until he or she has obtained a Court order allowing withdrawal.  Nothing in this Rule, however, is intended to require debtor’s attorney to perform legal services for the debtor that are unconnected with the bankruptcy case.  For example, this Rule does not require the attorney to advise the debtor in connection with a pending divorce proceeding or a real estate transaction, unless the debtor and the attorney have expressly contracted to expand the scope of the attorney’s services to provide such additional services.  In summary, while debtor’s attorney remains attorney of record, he or she must file either a response or a Notice of Advisement in substantial conformity with L.B.F. 9010-1.1 for every motion or application filed that may impact the debtor, debtor’s property, or, in a reorganization case, property of the estate.  Debtor’s attorney must also perform all Necessary Services.

 

L.B.R. 9010-1(c)(4), Necessary Services:  Whether a service is necessary refers to whether the circumstances of the case give rise to the need for the services.  For example, if a creditor files a motion for relief from the automatic stay, then the debtor is required to file a response if the debtor wishes to oppose the relief.  In this instance, responding to the motion is a Necessary Service.  On the other hand, if no such motion is filed, then the service of defending against a stay relief motion is not a Necessary Service in that particular case.  In some cases, the debtor’s home may be encumbered by judicial liens.  If so, then debtor’s attorney must advise the debtor and, if grounds exist, file a motion to avoid such liens.  Not every case will require lien avoidance motions, but when such services are applicable to the particular case, then they are deemed Necessary Services.  Similarly, if the debtor wishes to reaffirm a particular debt, then debtor’s attorney must advise the debtor as to whether reaffirmation is in the debtor’s best interest or would impose an undue hardship on the debtor and his or her dependents.  Nothing in the definition of Necessary Services, however, should be construed to require an attorney to perform services for the debtor that would cause the attorney to violate his or her ethical obligations.  If the attorney has ethical constraints, then the attorney should file a Notice of Advisement in substantial conformity with L.B.F. 9010-1.1 pursuant to subsection (c)(2)(B).