Maxus Liquidating Trust v. YPF S.A.

Summary

The Third Circuit held that under Model Rule 1.10(a)(2), a properly implemented ethical screen prevents imputation of a conflict when a lawyer moves from one firm to another, rejecting any "exceptional circumstances" exception or multifactor test not found in the rule's text. The court affirmed the bankruptcy court's denial of disqualification, finding White & Case's timely screen satisfied the rule, and that the fee apportionment requirement applies only to the disqualified lawyer, not her spouse. This precedential opinion clarifies standards for screening and disqualification in bankruptcy proceedings where local rules incorporate the ABA Model Rules.

Holdings

1. Yes, if the firm complies with the conditions of Model Rule 1.10(a)(2) (timely screen, no fee allocation, notice, etc.), the conflict is not imputed to the entire firm. There is no additional 'exceptional circumstances' requirement or multifactored test beyond the rule's text.
2. No, the Bankruptcy Court did not abuse its discretion because it correctly found that White & Case complied with Model Rule 1.10(a)(2) to the letter.

Questions Presented

1. Whether a timely screen under Model Rule 1.10(a)(2) is sufficient to prevent imputation of a conflict when a lawyer moves from one firm to another representing an adverse party.
2. Whether the Bankruptcy Court abused its discretion in denying the motion to disqualify.

Disposition

affirmed