Trustees: When Retaining Counsel, Don’t Forget About Special Counsel

Robert Feinstein & Shirley Cho

While trustees are well familiar with section 327(a) of the Bankruptcy Code, which governs the retention of bankruptcy professionals, trustees should bear in mind that special legal counsel may be retained as well under section 327(e). Special counsel will often have historic corporate knowledge that may lead to increased recoveries for the case, or may bring specialized legal knowledge to the table, or serve to overcome a disabling conflict on the part of general bankruptcy counsel. And, because the retention thresholds are less stringent than for retention of general bankruptcy counsel, trustees should consider the retention of special counsel as part of his or her professional team.