Q. I represent a creditor who had sued an entity
before it was put into receivership. The court has established a claims
procedure, and the receiver has sent out claim forms. Can I sign the claim
form on behalf of my client or is it better to have my client sign?
A. Receivership cases and bankruptcy cases often require creditors
to file proofs of claim. Because it may be easier, quicker and cheaper,
attorneys for creditors sometimes sign and file the proofs of claim. While
this is explicitly allowed in bankruptcy cases under Bankruptcy Rule
3001(b), and there is no prohibition on counsel signing a proof of claim
on behalf of his or her client in receivership cases, it is not a good
A number of cases have held that the act of signing a
proof of claim may make the attorney a fact witness and can result in a
waiver of attorney-client and/or work product privileges. Most proofs of
claim require the signer to declare under, penalty of perjury, that the
statements made in the proof of claim are true and correct. In order to do
so, the person signing the proof of claim must have knowledge of the facts
set forth in the proof of claim. Because of that, the person signing the
proof of claim may become a fact witness.
In In Re Duke Investments, Ltd., 545 B.R. 414 (Bankr.
S.D. Texas 2011), the court wrote its opinion on this issue specifically
to warn of problems that can arise when an attorney signs a proof of claim
on behalf of the client. In the case, the debtor moved to disqualify an
attorney who had signed a proof of claim on a creditor’s behalf, alleging
he was a fact witness by doing so. While the court chose not to disqualify
the attorney, because the court found that the attorney was not a
necessary witness under Texas law, it concluded: “attorneys representing
creditors in bankruptcy cases – ought to think twice before signing proofs
of claim for their clients. There is no question that any attorney is
allowed to do so, but the attorney puts himself at risk by becoming a fact
witness.” Id. at 427. In another, unreported, bankruptcy, In Re
Gonzalez, 2013 W.L. 2450925 (S. D. Texas 2013), the debtor sought to
depose one of the creditors attorneys who objected to and refused to
answer questions at the deposition asserting the attorney-client
privilege. On a motion to compel, filed by the debtor, the court ruled
that because the attorney signed the creditor’s proof of claim, that made
him a fact witness and held that the attorney-client privilege was waived.
See also In Re Vission, Inc., 2008 W.L. 2230741 *4, fn. 3 (Bankr.
E.D. Wis. 2008( (“By signing the affidavit, counsel runs the risk of
becoming a fact witness, and any future hope of asserting privilege may
disappear or counsel may be disqualified from representing a client.”).
Given these cases, the better practice is to have your
client sign any proof of claim in a receivership or bankruptcy case.
*Peter A. Davidson is a Partner of Ervin Cohen & Jessup
LLP a Beverly Hills Law Firm. His practice includes representing Receivers
and acting as a Receiver in State and Federal Court.