In re Sonya D. International, Inc.

AMENDED MEMORANDUM DECISION REGARDING EMPLOYMENT OF ENTERPRISE COUNSEL GROUP ALC

The above-captioned debtors, Sonya D. International, Inc. (“SDI”) and Hazlaha, LLC (“Hazlaha”), have general bankruptcy counsel and now seek to employ additional counsel, Enterprise Counsel Group ALC (“Enterprise”), to represent them ongoing litigation known as the “Constructive Trust Litigation.” 1 That litigation is related to the divorce of Sonya Dakar *775 (“Sonya”) (Case No. 2:12-bk-25615-NB) and Israel Dakar (“Israel”). The divorce also has embroiled Sonya’s and Israel’s children, including two of their daughters, Michal (“Mimi”) and Daniella (“Donna”) Dakar.

Israel objects that Enterprise has conflicts of interest. 2 He argues that, if it is hired to argue adverse to him, then it will also be adverse to other creditors or to the debtors’ bankruptcy estates, and therefore is disqualified. If Israel is correct then the debtors will lose by default in the Constructive Trust Litigation because they will be unable to employ counsel to argue against Israel.

The principal issue is whether debtors in possession (“DIPs”) and their professionals can take positions that favor one set of stakeholders…