January 04, 2019

In this article, Jenner & Block Partners Angela M. Allen and Rich Levin discuss the potential for conflicts in representing a sponsor and its distressed portfolio company and analyze the applicability of the Rules of Professional Conduct and the requirements for disinterestedness and disclosures under the Bankruptcy Code to such representations. “A law firm that wishes to represent the portfolio company in its restructuring ... but also continue to represent the sponsor on ‘unrelated matters,’ must conclude that it can provide truly undivided loyalty to both clients, including on matters potentially adverse to the sponsor, and that its judgment will not be compromised if it must bite the hand that feeds it,” they conclude.