MHG Casa Madrona Hotel, LLC

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re
MHG Casa Madrona Hotel, LLC, 	No. 09-12536
Debtor(s).
______________________________________/
Memorandum and Order on Application to Employ Counsel
_________________
Pursuant to Rule 2014(a) of the Federal Rules of Bankruptcy Procedure, the application by a
debtor in possession to employ a professional is an ex parte procedure, with notice only to the U.S.
Trustee. The court’s role is only to determine, pursuant to § 327(a) of the Bankruptcy Code, if the
professional is qualified, disinterested (as defined in § 101(14)), and does not represent an interest
adverse to the estate. Pursuant to § 327(c), the professional is not disqualified solely because of
representation of a creditor unless there is an objection, in which case the court must disapprove
employment if it finds an actual conflict of interest.
In this case, the Federal Deposit Insurance Corporation has filed a request for hearing, not an
objection. This is procedurally inconsistent with Rule 2014(a), and does not meet the requirements of
§ 327(c).
Proposed counsel is qualified and is disinterested. 	The representation of two banks in
unrelated cases is not representation of an interest adverse to the estate. Since there is no pending
Entered on Docket
January 21, 2010
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 09-12536 Doc# 140 Filed: 01/21/10 Entered: 01/21/10 13:48:16 Page 1 of
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1If there was a clear conflict, the court would disapprove the application sua sponte. However,
any conflict caused by the fact that the FDIC has taken over the two banks is not readily apparent. The
FDIC has made no such allegation in its request for a hearing, merely noting that employment of
counsel “poses the potential for an appearance of not being disinterested.” That is not an allegation of
an actual conflict of interest.
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objection, the court need not determine if there is an actual conflict of interest caused by the fact that
the two banks have been taken over by the FDIC.1 Accordingly, the application will be approved.
Approval shall be without prejudice to the right of any party to seek disqualification of counsel.
Dated: January 21, 2010
SAlan Jaroslovsky
U.S. Bankruptcy Judge
Case: 09-12536 Doc# 140 Filed: 01/21/10 Entered: 01/21/10 13:48:16 Page 2 of
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