Thanks to Professor Nancy Rapoport for her nod to Trip in the Dark on her blog. Nancy is the preeminent authority on lawyer’s professional ethics. (yes, that’s not an oxymoron).
Trip in the Dark presents an ethical challenge for its hero, so it’s appropriate that the heroine, Beth Nielsen, is based in part on Nancy. Beth’s character honors several women– Nancy, Elizabeth Warren (I suppose we need to address her as Senator now) and Evelyn Biery, retired partner at Fulbright Jaworski – all women I greatly admire. Hopefully the book will be available on Amazon and Barnes & Noble shortly.
The moral dilemma that faces Tom Nielsen – the hero-involves a set of tape recordings that Jake McCarty (based on Governor Connally) stole from Richard Nixon. Nixon stole them himself, from the White House. He planned to use the recordings, that incriminated Lyndon Johnson, J Edgar Hoover and several other prominent politicians, to save his Presidency. McCarty convinced him not to, but then removed the tapes as Nixon was giving his resignation speech.
When McCarty has to file bankruptcy he decides to give the tapes to the University of Texas (his alma mater) and uses Tom Nielsen as the carrier. Of course, since McCarty is in a bankruptcy the tapes belong to his bankruptcy trustee. McCarty simply ignores this inconvenience, but Tom and especially Beth his wife realize the moral dilemma.
To deliver the tapes to the trustee is to assure they will fall into the hands of a group of criminals, who already plan to buy them at the bankruptcy auction. To deliver the tapes to the University is to aid and abet a theft of property of a federal bankruptcy estate – a felony.
What to do? Tom and Beth come up with a creative solution (probably not one Nancy would have thought of). But what would you do?
In the book, Tom is McCarty’s protégé, but is unable to represent him because of a conflict of interest – Tom’s firm represents McCarty’s largest creditor. Would the moral/ethical considerations be different if Tom were McCarty’s lawyer?
Perhaps Professor Rapoport can comment on this issue?
The issue is not as far fetched as you might think. In this recession, as in the one that plagued Houston in the 1980’s, many prominent people have had to file bankruptcy. Their first thought is generally not how they can pay their creditors but how they can protect their assets. They frequently confess this wish to their attorneys even before they file. The question arises in several ways. First, most states (and the Bankruptcy Code) permit an individual to claim property of a certain type and value as “exempt”. The property includes things like household furnishings, personal clothing, cars, etc. There is also a “wild card” exemption – property less than a certain value, regardless of the type.
Of course, the exemption all depends on how property is valued. If household furnishings include an antique armoire, how is it valued? How closely does the lawyer have to check their client’s evaluation?
The issue can also arise after the bankruptcy filing, when the lawyer spots his client cruising around town in a Jaguar that was not listed as one of the Debtor’s automobiles.
In better times, the debtor’s truthfulness would be double checked by the bankruptcy trustee. But in these days, with thousands of bankruptcies being filed, trustees are overwhelmed. They depend on the bankruptcy attorneys to be the watchdogs.
Is this appropriate? How diligent must the lawyer be in checking the client’s list and value of assets? If the lawyer has a client they know is trying to hide something, what should they do? Doesn’t attorney client privilege protect the lawyer? Can the client sue the lawyer if he tattles?
What do you think?