2005 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit 7-14-2005 

# In Re: Mine rs P r e c e de nt i al or N on-P r e c e de nt i al : N on-P r e c e de nt i al D ocke t N o . 04-3849

F o llow thi s and a dd it ion al work s at : http://d i git alc ommon s .l a w . vi ll anova . e du/thir dc ir c uit_2005

Thi s de c i sion i s br ou ght t o you for f r e e and ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i ll anova U nive r sity S choo l of L a

w Di git al Reposit ory

. It h as be e n a c c ept e d for inclusion in 2005 D e c i sion s b y an author i z e d a dmini s tr at or of V i ll anova U nive r sity S choo l of L a

w Di git al Reposit ory

. F or mor e inform at ion, p le as e c ont a ct Be n j amin . C arl s on@l a

w . vi ll anova . e du . Re c omme nde d C it at ion
" In Re: Mine r s " (2005). 2005 D e cisio n s . P ape r 844. http://d i git alc ommon s .l a

w . vi ll anova . e du/thir dc ir c uit_2005/844NOT P RE CE DE NT I AL

U N IT E D S T A T E S C O U R T O F A P P E A L S F O R T H E T H IR D C IR C U IT N o. 04- 3849 

### IN RE: MINERS FUEL COMPANY, INC. andIN RE: MINE RS OI L C OM PANY an dINRE : M IN E R S EN V IR O N M EN T A L , IN C .,

Debtors W I LLI AM G. SCHWAB, Appe l l ant

v. M IC H A E L F IO R IL L O , E S Q .,
O n A p p ea l from the U n it ed S tat es D istri ct C o u rt f o r th e M id d le D istric t o f P e n n sy lv a n ia ( D . C . N o. 03- cv- 01836) D istric t Ju d g e : H o n o ra b le T h o m a s I. V a n a sk ie Subm i t t ed U nderT hi r d C i r cui tL A R 34. 1( a)

J ul y11, 2005 B efor e: SL O V I T E R , M cK E E , C i r cui tJ udges , and FU L L A M , D i s t r i ctJ udge * ( Fi l ed: J ul y14, 2005 ) OP I NI ON

____________ * H on. J ohn P. Ful l am, Seni orJ udge, U ni t ed St at es D i s t r i ctC our tforthe East ern D i s t r i ctof Penns y l vani a, s i t t i ng bydes i gnat i on.2

SL O V I T E R , C i r cui tJ udge. B e f o r e u s i s a n a p p e a l b y W i l l i a m G . S c h w a b , T ru s t e e f o rM i n e r s F u e l C o m p a n y, I nc. , fr om t he D i s t r i ctC our t ’ s or deraff i r m i ng the or derof the B ankrupt cyC our tgr ant i ng t h e m o t i o n o f

M i c h a e l F i o r i l l o t o w i t h d r a w a s c o u n s e l t o D e b t o r , M i n e r s F u e l C o m p a n y, I nc. and i t s r el at ed corpor at i ons , M i ner s O i l C om panyand M i ner s E nvi r onm ent al , I nc. ( col l ect i vel yt he “M i ner s Fuel C om pani es ”) . T hos e compani es w er e the s ubj ectof an in v o lu n ta ry b a n k ru p tc yp ro c e e d in g u n d e r C h a p te r 7 . A tt he r eques tof the M i ner s Fuel C om pani es , Fi or i l l o, w ho had an i nt er es ti n a c o m p a n yth a t re n ted o f

f ice sp a c e a n d e q u ip m e n t f ro m M in e rs F u e l C o m p a n y , ag re e d to re p re se n t th e m a t th e Ju n e 2 6 , 2 0 0 3 in v o lu n tar ye m e rg e n c yb a n k ru p tcy he a rin g . P rio r to t he hea r i ng, Fi or i l l o had advi s ed M i ner s Fuel C om pani es thatbeca us e of thi s pot ent i al confl i ctof i nt er es tt heyw oul d have t o fi nd s ubs t i tut e couns el i m m edi at el yaft erthe
emer gencypr ocee di ngs . A tt he hea r i ng, Fi or i l l o, as r eques t ed bythe M i ner s Fuel C o m p a n ies , m o v e d th a t th e p ro c e e d in g s b e c o n v e rte d to C h a p ter 1 1 . B e f o re su b stitu te couns el w as appoi nt ed, al l of the off i cer s and di r ect or s of the M i ner s Fuel C om pani es re s ig n e d , le a v in g F io ri llo u n a b le to c o m m u n ic a te w ith th e c o m p a n ie s . F iori ll o then fil ed a M o ti o n to W ith d raw as c o u n sel, w h ich th e B an k rup tcyC o u rt gr ant ed. O n appea l , t he D i s t r i ctC our taff i r m ed, not i ng that“Fi or i l l o i nform ed the D ebt or s t hathe w as onl yr epr es ent i ng thei ri nt er es ton an emer gencybas i s , ” that“[t ] he
re sig n a tio n o f

th e o f f ice rs a n d d ire c to rs a f

f o rd e d A tty . F io rillo a m p le ju stif ica tio n to3

w i t hdr aw as couns el , ” and that“[t ] he Trus t ee ha s nots how n s ubs t ant i al pr ej udi ce by all o w ing A tty . F iori ll o to w ith d raw . ” A p p . at 7. F inally , b ec au se “ F iori ll o ’s
r epr es ent at i on of the D ebt or s w oul d have be en meani ngl es s beca us e i t s offi cer s and d ire c to rs h a d re sig n e d ,” th e C o u rt c o n c lu d e d th a t “[ a ]llo w in g A tto rn e yF io rillo to
w ith d ra w w o u ld n o t a d v e rs e ly af f e c t th e e f f ic ie n t a d m in is tr a tio n o f ju s tic e .” A p p . a t 8 . T h e A p p e llan t, T ru ste e S c h w a b , is c o n c e rn e d th a t if F io rillo is a llo w e d to
w i t hdr aw , t he bankrupt cycas e w i l l be di s m i s s ed bec aus e corpor at i ons m us tbe rep rese n ted b yco u n sel i n all tr ial p roc ee d ing s. S ee , e.g., R o w land v . C ali fo rnia M en ’s C o lo n y , 5 0 6 U .S . 1 9 4 , 2 0 2 (1 9 9 3 ) (“ a c o rp o ra tio n m a ya p p e a r in th e f e d e ra l co u rts o n ly thro u g h li ce n sed co u n sel”); U n it ed S tat es v . C o cive ra, 10 4 F . 3 d 5 6 6 (3d C ir . 1 9 9 6 ); W R S , Inc . v . P laza E n tm ’t , Inc . , 4 0 2 F . 3 d 4 2 4 , 4 2 6 (3d C ir . 2 0 0 5 ) T he s i tuat i on i s unus ual . T he corpor at i ons w i l l be unr epr es ent ed notbeca us e of F io rillo’ s a c tio n s, b u t b e c a u se th e re sig n a tio n o f th e d ire c to rs a n d o f

f ice rs le a v e s F io rillo
n o th in g to re p re se n t. M o re o v e r, F io rillo a lleg e s a p o ten tial c o n f lict o f in ter e st, a s h is p a ym e n t o f

re n t to th e D e b to rs m a yb e a t is s u e . W e w i l l aff

i r m . W i t hdr aw al of Fi or i l l o w i l l notpr ej udi ce a nypart y . T he D i s t r i ct C o u rt c o n c lu d e d , in a g re e m e n t w ith th e B a n k ru p tcy Ju d g e , tha t th e f o rm e r o f f ice rs c o u ld b e su b p o en ae d at th e re q u est o f th e T rustee u n d er F ed era l R u le of B an k rup tcyP roc ed u re 2004( c) i n or dert o pr oduce bus i nes s r ecor ds and otherr el evanti nform at i on. T he Trus t ee can t es t i fyfort he D ebt or s atanypr ocee di ngs governed by11 U . S. C . § 341. N ot i ce c anbe pr oper l ys erved on the corpor at i ons thr ough t he s ecr et aryof s t at e. T hus , none of the

p a rties w ill b e w ith o u t re p re se n tatio n a n d th e a d m in istra tiv e p ro c e ss w ill n o t b e u n d u ly b u rd e n e d b yF io ri llo ’s re s ig n a tio n . T he or derof the D i s t r i ctC our tw i l l be af fi r m ed forthe r eas ons s etfor t h bythe D istric t C o u rt a n d th e B a n k ru p tcy C o u rt.