COMMITTEE ON CODES OF CONDUCT
ADVISORY OPINION NO. 100
Identifying Bankruptcy Parties for Purposes of Recusal.
Canon 3C(1)(c) requires a judge to recuse when the judge knows that the judge, the
judge's spouse, or a minor child residing in the judge's household "has a financial interest . . . in a
party to the proceeding." Similarly, Canon 3C(1)(d) requires a judge to recuse if the judge, the
judge's spouse, "or a person related to either within the third degree of relationship, or the spouse
of such a person: (i) is a party to the proceeding, or an officer, director, or trustee of a party." In
most matters filed in the federal courts, it is easy to identify who is "a party to the proceeding" by
reviewing the caption of the charging pleadings and proofs of service. However, bankruptcy
cases are quite different because such cases regularly involve creditors who may have some
interest in the proceedings, but no intention of participating in a capacity akin to a party.
Identifying who is "a party to the proceeding" for purposes of recusal in bankruptcy cases
is important not only to the bankruptcy courts, but also to the district courts sitting as bankruptcy
courts after withdrawal of the reference, to the district courts sitting as appellate courts, to the
bankruptcy appellate panels, and to the circuit courts of appeal. The Committee consistently has
taken the position that simply being a creditor or an interest holder of a bankruptcy estate is not a
sufficient interest to make that creditor "a party to the proceeding." In that same vein, the acts of
filing a proof of claim, or submitting a ballot on a proposed plan of reorganization are not in
themselves sufficient to raise the creditor or interest holder to the status of a party. It takes
something more.
The Committee has advised that if a creditor accepts appointment to a committee of
creditors, that change in status is sufficient to make each such creditor or interest holder "a party"
because of the statutory responsibilities assumed by acceptance of such an appointment. In
addition, the following participants in bankruptcy proceedings should be considered parties for
these purposes: the debtor, a trustee, parties to an adversary proceeding, and participants in a
contested matter. These entities occupy a central role in the proceedings or are actively involved
in matters requiring judicial adjudication. As a consequence, we advise that they are sufficiently
akin to parties that they should be treated as such for purposes of judicial disqualification.
Part of the ethical challenge in bankruptcy cases lies in the fact that the identity of "a
party to the proceeding" may change with any motion, objection, or adversary proceeding. When
the issue is joined in this fashion, and a participant becomes a party for these purposes, the
question of recusal must be considered. Judges sitting in bankruptcy matters should be vigilant
to the possibility that a creditor or interest holder's status may at some time change to "a party."
The Committee has advised, however, that in the ordinary bankruptcy case a judge has no
obligation to review the schedules of creditors and interest holders to look for possibly
disqualifying circumstances.
January 12, 2001