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Retention of Bankruptcy Professionals: Court Concludes that a Debtor’s First Cousin Is Not a “Relative” and Thus Not an “Insider”

In a recent case, a Chapter 11 debtor sought to employ an accounting firm under section 327(a), the principal of which was the first cousin of the owner of the debtor corporation. The U.S. Trustee objected to the retention, arguing that the debtor’s cousin was an insider. But the bankruptcy judge disagreed.

6 minute read July 01, 2026 at 12:09 AM
By
Daniel A. Lowenthal
Retention of Bankruptcy Professionals: Court Concludes that a Debtor’s First Cousin Is Not a “Relative” and Thus Not an “Insider”

A professional seeking to represent a debtor under Bankruptcy Code section 327(a) must not hold an interest adverse to the bankruptcy estate and must be disinterested.

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