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 IN THE UNITED STATES BANKRUPTCY COURT FOR THE 

 EASTERN DISTRICT OF VIRGINIA 

 ALEXANDRIA DIVISION 

IN RE: ) 

) CASE NO. 16-10556-BFK 

TERENCE MICHAEL HYNES, ) 

KATHRYN WILSON HYNES, ) 

) Chapter 11 

Debtors. ) 

UNITED STATES’ OPPOSITION TO DEBTORS’ 

APPLICATION TO EMPLOY SPECIAL TAX COUNSEL 

The United States of America, on behalf of the IRS, hereby opposes Debtors’ 

application to employ Burton J. Haynes (“Applicant”) as special tax counsel and 

accountant (ECF No. 27) and represents as follows. 

STATEMENT OF FACTS 

Debtors filed a bankruptcy petition seeking relief under Chapter 11 on or about 

February 18, 2016. 

The Disclosure of Compensation filed with the Petition indicates that the 

Applicant provided the $2,400 received by Debtors’ counsel and the $1,717.00 filing fee. 

These amounts came “from money paid to [the Applicant] by the Debtors.” ECF No. 1 at 

13. 

According to Debtors’ Form 107 (Statement of Financial Affairs), within 1 year 

before this bankruptcy petition was filed, Debtors paid the Applicant $4,800 in “Legal fees 

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in connection with IRS collection matters.” ECF No. 17, at 34. The dates of these 

payments to the Applicant are not disclosed. Id. 

At the 341 Meeting of Creditors, Debtor Terrence Hynes (who is an attorney 

himself) was not able to explain whether this money from the Applicant was a gift or a 

loan, or whether it was Debtors’ own money that the Applicant held in trust. The 

Applicant is not listed as a creditor on Debtor’s schedules. 

The Applicant’s declaration in support of the motion to employ does not specify in 

any detail his prior relationship with the Debtors except that he “represented the Debtors 

prior to the filing of their bankruptcy.” ECF No. 27-1. 

ARGUMENT 

Applications for employment are governed by 11 U.S.C. § 327 and Fed. R. Bankr. 

P. 2014. The applicant must provide a verified statement setting forth the person's 

connections with the debtor, creditors or any other party in interest, their respective 

attorneys and accountants, the United States trustee or any person employed in the office 

of the United States trustee. Rule 2014(a). This disclosure is necessary to allow all parties 

and the court to review any conflicts, competency, and necessity of the services. In re 

Arkansas Co., 798 F.2d 645, 648 (3d Cir. 1986) (court required to review competency, 

experience and integrity); Farinash v. Vergos (In re Aultman Enters.), 264 B.R. 485, 490 

(E.D. Ten. 2001) (purpose of approval is not just to control costs but also to "prevent 

unscrupulous individuals from taking advantage of the bankruptcy process"). 

In this case, in the 12 months prior to the bankruptcy being filed, Debtors paid the 

Applicant $4,800 for legal services, and then the Applicant paid (or lent, or made a gift of) 

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around $4,200 to Debtors to cover their bankruptcy expenses. The circumstances of these 

transfers, without further explanation, create an appearance of impropriety and make it 

impossible to evaluate whether the Applicant should be employed by the estate. 

The appearance of impropriety is strengthened by Debtors’ inability to explain 

whether this money was a gift or a loan from the Applicant and by the Applicant’s failure 

to disclose the transfer on his application. 

The United States has no opposition to the estate obtaining competent and 

disinterested tax advice and accounting help. However, the circumstances surrounding 

Debtors’ financial relationship with the Applicant, and lack of adequate disclosure, 

indicate that this application should not be approved. 

CONCLUSION 

For the foregoing reasons, the United States respectfully requests that the 

application to employ Mr. Haynes as special tax counsel and accountant (ECF No. 27) be 

denied. 

Dated: April 26, 2016 

CAROLINE D. CIRAOLO 

Acting Assistant Attorney General 

/s/ Boris Kukso 

BORIS KUKSO 

Trial Attorneys, Tax Division 

U.S. Department of Justice 

P.O. Box 310 

Washington, D.C. 20044 

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202-353-1857 (v) 

202-307-0054 (f) 

Boris.Kukso@usdoj.gov 

Of Counsel: 

DANA J. BOENTE 

United States Attorney 

 

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CERTIFICATE OF SERVICE

I hereby certify a copy of foregoing UNITED STATES’ OPPOSITION TO 

DEBTORS’ APPLICATION TO EMPLOY SPECIAL TAX COUNSEL will be filed with 

the United States Bankruptcy Court electronically in the CM/ECF system. Notice of this 

filing will be sent to all parties by operation of the Court's electronic filing system. Parties 

may access this filing through the Court's system. 

Date: April 26, 2016 

/s/ Boris Kukso 

 BORIS KUKSO 

Trial Attorney 

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