DOUGLAS TICE, Chief Judge, Bankruptcy
Hearing was held on October 10, 2003, on two motions regarding the representation of the chapter 11 trustee Keith L. Phillips by Hunton Williams LLP. In the first motion filed July 16, 2003, Hunton Williams sought to withdraw as counsel for the trustee with respect to the trustee's objection to the administrative claim of CITGO Petroleum Corporation. In the second motion filed August 26, 2003, CITGO Petroleum sought to disqualify Hunton Williams as counsel for the trustee. At the conclusion of the hearing, the court granted the motion of Hunton Williams to withdraw, denied the motion of CITGO to disqualify Hunton Williams, and requested that counsel submit a proposed order. This opinion supplements the court's bench ruling.
Hunton Williams LLP had a relationship with CITGO Petroleum Corporation prior to the filing of this bankruptcy case on March 9, 2001. On May 20, 2002, Hunton Williams filed its application for employment as counsel to the chapter 11 trustee Keith L. Phillips. As required by Rule 2014(a), the application included a verified statement from the firm that it would not take a position directly adverse to CITGO while representing the trustee. This court approved the application to employ Hunton Williams as counsel for the trustee on June 3, 2002. The trustee, through its counsel Hunton Williams, filed an omnibus objection to certain administrative claims, including that of CITGO, on June 25, 2003. Upon discovering its mistake, Hunton Williams moved to withdraw as counsel to the trustee with respect to CITGO's administrative claim. Thereafter CITGO moved to disqualify Hunton Williams as counsel to the trustee.
Upon consideration of the papers, the testimony at hearing, and oral argument, the court finds that the disqualification of Hunton Williams at this stage in the case would be very detrimental to the debtors. The court also finds that because Hunton Williams promptly sought to withdraw following the discovery of its mistake in representing the trustee with regard to CITGO's administrative claim, there has been no prejudice to CITGO.
Accordingly,
IT IS ORDERED that the motion of Hunton Williams LLP for leave to withdraw as counsel to the trustee with respect to the trustee's objection to CITGO's administrative claim is GRANTED.
IT IS FURTHER ORDERED that the motion of CITGO Petroleum Corporation to disqualify Hunton Williams LLP as counsel for the trustee is DENIED.