The debtors filed an application to employ counsel.  The United States trustee objected on the basis of inconsistent and inaccurate disclosures regarding the pre-petition services rendered by the firm to the debtors.  The Court concluded that question number nine of the Statement of Financial Affairs was properly interpreted broadly to require disclosure of the particulars regarding the case filing fee provided by the debtors’ son prior to the bankruptcy filing.  The Court further concluded that the receipt of the filing fee from the son ought to have been disclosed as a connection which the firm had with a party in interest in the case as a pre-petition transferee of a material part of the debtors’ property.

            Due to the novel situation presented by the facts of this case where the transferee was a close family member of elderly parents and the absence of prior controlling legal authority on point, the Court concluded that these omissions, standing alone and absent some indication that disclosure of the filing fee was expressly considered but rejected on the premise that there was an arguable basis upon which to contend that it was not mandated, are insufficient cause to deny the application to employ the firm.