In re Bruce Lee Jennings, No. 05-15212 (11th Cir. October 4, 2006). 

Eleven related debtors filed Chapter 11 petitions in the Middle District of Florida and the cases were administratively consolidated.  The Debtors’ Law Firm filed a single application for employment pursuant to Rule 2014, purportedly revealing all of its connections with the Debtors.  The application was approved.  However, a creditor subsequently moved to disqualify the Law Firm based upon its alleged failure to comply with Rule 2014 and the existence of actual and potential conflicts of interest.  The Bankruptcy Court disqualified the Law Firm, denied all fees, and required disgorgement of prepetition fees.  The District Court affirmed, and the Firm appealed.

The Eleventh Circuit affirmed.  It is the responsibility of the Law Firm to fully comply with Rule 2014 and disclose all relevant facts and connections with the debtors.  Bankruptcy Courts are not required to "hunt around and ferret through" documents in search of the basic disclosures required by Rule 2014.   

Further, the court found that the conflicts of interest supported disqualification.  An actual conflict existed where one debtor depleted assets despite another debtor’s security interest in the assets.  This forced the firm to assert "two diametrically opposed goals."  One of the debtors also wiped away a $500,000 loan to another debtor with no money changing hands, and there were real estate transactions between the debtors that may have produced administrative claims.