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Agency Conflict

Perhaps the most striking similarity between Bankruptcy Courts and Surrogate Courts is the fundamental existence of Agency Conflict.

The Headless Fee Pot - A "Sitting Duck" for Agency Conflict Abuse

Agency Conflict, in the context of estates such as in bankruptcies and wills, as well as certain special purpose liquidating entities, is also known as the "Headless Fee Pot" problem. This problem exists when you have a "pot of money" with nobody in charge except person(s) who "earn" fees from the pot. There is a perverse incentive for such person(s) who are in effective control of the pot to ignore their fundamental duties and instead act to enrich themselves from the Fee Pot. Otherwise honest lawyers who may genuinely believe that ethics rules are not being violated easily succumb to feeding off the Fee Pot. Worse still is when organized crime grabs hold of a Fee Pot. Criminals, who also happen to be members of a State Bar, have no limiting morals and become emboldened by the special powers granted attorneys above and beyond normal citizens.

The Monopoly Grant of Powers & Profits by and for the Legal Profession

Society suffers recurring great loss of value that is routinely siphoned off of special purpose entities holding value because we have allowed lawyers to write the rules from which they alone benefit. Lawyers are granted the monopoly powers to represent entities holding wealth, sometimes extra-ordinary wealth but always beyond the reach, comment, or control of ordinary citizens. For example, State Bar organizations, a club control by and for the benefit of dues paying attorneys, adopt rules prohibiting all ordinary citizens from representing a corporation. Only an attorney is allowed to hold many positions of power where the control of "other peoples money" is often present. While they say "Absolute Power corrupts absolutely", exclusive power beyond the inquiry and regulation of ordinary citizens is arguably equally bad for society and potentially worse as it escapes scrutiny. BankruptcyMisconduct is compelled to identify in context this self serving convention of dubious merit as promulgated by the Legal Profession. While we neither endorse nor understand the purported Constitutional basis for these supra-citizen powers granted exclusively to members of the legal profession, ordinary citizens ought to become aware of the unilateral powers granted lawyers by their own self-regulating profession. The injustice and economic distortions which Agency Conflict brings upon society could be greatly reduced if only the legal profession did not regularly provide tacit approval and outright protection to their corrupted brethren who profit from Agency Conflict Abuse.

BankruptcyMisconduct believes there are several cases providing relevant reading on the issue of Agency Conflict.

The Carvel Estate

JH Collectibles

James F. Walker

The Asbestos Ring