WSJ Publishes Second Philip Dublin Article, Focus on Delaware Rural/Metro Ruling
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In his latest installment of a series being published by The Wall Street Journal, Akin Gump financial restructuring partner Philip Dublin writes on the Delaware Chancery Court’s Rural/Metro ruling and its significance for advisers to distressed companies.
The court found RBC Capital Markets liable for ambulance company Rural/Metro’s failed buyout, noting that RBC neglected to disclose a conflict of interest in order to prompt a quick sale of Rural/Metro.
Dublin notes that the rule “should not materially impact advisers to distressed companies” because “[p]rofessionals are already obligated to perform their duties (and treat their clients) with candor, loyalty and professionalism. Rural/Metro simply reaffirmed these commitments.”
He does state that “it is incumbent on every professional to have protocols in place to ensure that when engagements are undertaken, a proper conflict check is performed, the client is informed of any potential conflicts that may exist and, to the extent necessary, knowing and permitted waivers are obtained or the engagement is declined,” adding that, for professional conflict issues, “it is all about disclosure, disclosure, disclosure.”
Dublin describes the importance of “appropriate conflict procedures,” drawing examples from Akin Gump’s own conflict check processes, and closes with an emphasis of adequate disclosure, “the absence of which, as per Rural/Metro, may have material negative consequences for a professional.”
To read a summary of the first Philip Dublin WSJ Bankruptcy Blog article, please click here.
