Court Criticizes Conduct of Former Adelphia In-House Lawyer

June 1, 2005

The bankruptcy court handling the Adelphia bankruptcy disqualified a former Adelphia in-house lawyer from helping the Rigas family, who formerly controlled Adelphia. The in-house lawyer’s appeal of the disqualification resulted in a harsh criticism by the Southern District of New York.

In Horn v. Adelphia Communications Corp. (In re Adelphia Communications Corp.), No. 04 Civ. 2192 (DAB), 2005 U.S. Dist. LEXIS 2722 (S.D.N.Y. Feb. 16, 2005), the court found that the in-house lawyer violated her ethics duty by sending protected Adelphia material to the Rigases after she and they had left Adelphia. The court rejected the former in-house lawyer’s argument that she was not really acting as a lawyer (noting that she used the title “Staff Attorney”), and that she was merely sending the Rigases material to which they had access while at the company. Id. at *3. The court explained that “[t]he fact that they [the Rigases] were aware of the information prior to their resignations does not excuse any disclosure made to them by [the in-house lawyer] after the Rigases left Adelphia.” Id. at *28. The court upheld the disqualification.

In-house lawyers must remember that they represent the institutional client, not any of its officers or executives.