In re Oatka Restaurant and Lounge, Inc.
Decision Date | 27 April 1987 |
Docket Number | Bankruptcy No. 87-20181. |
Citation | 73 BR 84 |
Parties | In re OATKA RESTAURANT AND LOUNGE, INC., Debtor. |
Court | U.S. Bankruptcy Court — Western District of New York |
Chamberlain, D'Amanda, Oppenheimer & Greenfield by Brian F. Curran, Rochester, N.Y., for debtor.
Fix, Spindelman, Turk, Himelein & Shukoff by Igor Shukoff, Rochester, N.Y., appeared in opposition to motion.
MEMORANDUM AND DECISION
This is an application by the Chapter 11 debtor, Oatka Restaurant and Lounge, Inc., for authorization to employ counsel pursuant to 11 U.S.C. § 327. The debtor has already deposited $2,500.00 with the law firm of Chamberlain, D'Amanda, Oppenheimer & Greenfield as a retainer. A Motion to employ the firm was on for a hearing March 9, 1987. At the hearing, opposition to the employment was raised by a creditor on the ground that the retention of the Chamberlain firm as counsel for the debtor would create an actual conflict of interest. The Court reserved decision on the matter, exhorting the Chamberlain firm to withdraw its application and defuse the conflict. Instead, the Chamberlain firm has submitted an affidavit stating that no actual conflict exists.
The facts of the case, as they have been vaguely outlined for the Court, are these. At some time prior to the bankruptcy filing, a State Court action was commenced against the debtor, pursuant to the New York Dram Shop Act, N.Y.Gen.Oblig.Law § 11-101 (Consol.1977). The lawsuit alleges that the debtor served alcoholic beverages to an intoxicated person who, as a result of his further intoxication, caused the death of Margaret Zona. The plaintiff in the lawsuit, the estate of Margaret Zona, is a creditor in the bankruptcy case and has objected to the employment of the Chamberlain firm. The debtor, as defendant in the lawsuit, impleaded and named as a third-party defendant the estate of Thomas Zona, husband of Margaret Zona. The debtor, as third-party plaintiff, theorizes that Thomas Zona's intoxication was the supervening cause of the plaintiff's death and that if the debtor is found liable in damages to the plaintiff, then the third-party defendant should be found liable to the debtor in an action over for contribution or indemnification. The third-party defendant is being represented against the debtor by the Chamberlain firm who now seek to represent the debtor in bankruptcy. The only question presented is whether such dual representation constitutes an actual conflict of interest.
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