How Attorneys Can Avoid Big Claims Over Bankrupt Clients

Legal Ethics

How Attorneys Can Avoid Big Claims Over Bankrupt Clients

Posted Apr 23, 2008, 01:46 pm CDT
By Martha Neil

When struggling companies go under in a big way, bankruptcy trustees today are increasingly looking to their accountants and lawyers to ante up at least some of the missing money

So professionals should keep a wary eye out for red flags that should warn them, early in the representation, that something may be amiss, reports the National Law Journal.

For example, are there signs of self-dealing? Are the numbers on financial documents outdated or suspiciously low? Are relevant factors not discussed in a fairness opinion?

"If these or other indications of problems exist, the lawyers need to stop and ask questions, if not as a matter of law, then at least as a matter of prudence and good loss prevention," the article advises.

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Legal Ethics