Professional Ethics & Standards Flashcards
7 cards from real CBA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Professional Ethics & Standards flashcards as text
A bankruptcy professional who simultaneously serves as both a creditors' committee member and a purchaser of estate assets would violate which core ethical principle?
Answer: The prohibition against self-dealing
Purchasing estate assets while serving as a fiduciary for creditors constitutes self-dealing because personal financial interests conflict with the duty to maximize recovery for creditors.
When a debtor fails to disclose a significant asset on Schedule A/B, the responsible professional who prepared the schedules has an obligation to:
Answer: File amended schedules immediately and notify the trustee
Professionals who discover omissions in court filings must amend the documents and notify the trustee to correct the record and fulfill duties of candor and competence.
Under what circumstances may a bankruptcy trustee employ a professional who has a connection to a creditor without ethical violation?
Answer: If the connection is fully disclosed, found not to impair judgment, and approved by the court
11 U.S.C. § 327 allows employment of professionals with connections if they are 'disinterested' or the connection does not impair independence, provided full disclosure and court approval.
A bankruptcy administrator must maintain client confidences except when:
Answer: Disclosure is required to prevent substantial financial harm to the estate
Confidentiality yields when disclosure is necessary to prevent substantial financial harm, as protecting the estate and creditors is a paramount competing obligation in bankruptcy proceedings.
Which action by a debtor's attorney would most clearly violate professional responsibility rules in a bankruptcy case?
Answer: Filing a voluntary petition for a corporation without board authorization
Filing a petition for a corporation without proper board authorization is an unauthorized act that violates both corporate governance rules and professional responsibility standards.
A Chapter 13 trustee who routinely recommends the same financial counseling service owned by the trustee's spouse is guilty of:
Answer: An undisclosed conflict of interest and self-dealing through a related party
Directing estate-related business to a spouse's company constitutes undisclosed self-dealing by a fiduciary, violating conflict-of-interest rules regardless of whether rates are market-rate.
The 'substantial compliance' standard in bankruptcy ethics most commonly applies to:
Answer: Determination of whether fee applications adequately itemize services rendered
Courts apply a substantial compliance standard when reviewing fee applications, requiring sufficient detail to allow meaningful judicial review without demanding perfect itemization.