PROCEDURE FOR PROPOSING AMENDMENTS TO RULES

Amendments to these Rules may be proposed to the district court by majority vote of the bankruptcy court. RULE 9029-4A RULES OF PROFESSIONAL CONDUCT Except as provided in Rule 2040-4(B), the rules of professional conduct that apply in cases before the district court under District Court Local Rule 83.50 apply in cases and proceedings before this court. RULE 9029-4B ATTORNEY DISCIPLINARY PROCEEDINGS A. Disciplinary Proceedings Generally (1) Definitions In this Rule, these definitions apply: (a) “Misconduct” means any act or omission by an attorney who violates the district court’s rules of professional conduct. The act or omission constitutes misconduct regardless of whether: 1. the attorney committed the act or omission individually or in concert with any other person; or 2. the act or omission occurred during an attorney-client relationship.

(b) “Discipline” includes temporary or permanent suspension from practice before the bankruptcy court, reprimand, censure, or any other disciplinary action that the circumstances warrant, such as restitution of funds, satisfactory completion of educational programs, compliance with treatment programs, and community service. (2) Attorneys Subject to Discipline 39 By appearing in the bankruptcy court, an attorney, whether or not a member of the bar of the district court, submits to the disciplinary authority of the bankruptcy court. (3) Confidentiality (a) Before a disciplinary proceeding is assigned to a judge under section (B)(10) of this Rule, the proceeding is confidential, except that the bankruptcy court may, on terms it finds appropriate, authorize the clerk to disclose information about the proceeding. (b) After a disciplinary proceeding is assigned to a judge under section (B)(10) of this Rule, the record and hearings in the proceeding are public, and all materials submitted to the chief judge before the disciplinary proceeding was assigned must be filed with the clerk of the court, unless for good cause the judge to whom the disciplinary proceeding is assigned orders otherwise.

(c) A final order in a disciplinary proceeding is a public record. B. Discipline of Attorneys for Misconduct (1) Complaint of Misconduct A disciplinary proceeding is commenced by submitting a complaint of misconduct to the chief judge of the bankruptcy court. The complaint may be in the form of a letter. The complaint must state in detail the nature of the alleged misconduct and must identify the rule of professional conduct violated.

The chief judge must refer the complaint of misconduct to the bankruptcy court for consideration and appropriate action. (2) Request for a Response to a Complaint of Misconduct On receiving a complaint of misconduct, the bankruptcy court may forward a copy to the attorney and ask for a response within a set time. Any response must be submitted to the chief judge. (3) Action by the Bankruptcy Court on a Complaint of Misconduct On the basis of the complaint of misconduct and any response, the bankruptcy court may, by a majority vote: (a) determine that the complaint merits no further action and give notice of the determination to the complainant and the attorney; (b) direct the commencement of formal disciplinary proceedings; or (c) take other appropriate action.

40 (4) Statement of Charges If the bankruptcy court determines, based on the complaint and any response, that formal disciplinary proceedings should be commenced, the bankruptcy court must issue a statement of charges against the attorney. The statement of charges must describe the alleged misconduct, state the proposed discipline, and require the attorney to show cause, within 28 days after service, why the attorney should not be disciplined. (5) Method of Service The clerk must mail two copies of the statement of charges to the attorney’s last known address. One copy must be sent by certified mail restricted to addressee only, return receipt requested.

The other copy must be mailed by first class mail. If the statement of charges is returned as undeliverable, the clerk must notify the chief judge. The bankruptcy court may direct further attempts at service. (6) Date of Service In this Rule, the date of service is: (a) the date of mailing, if service is by mail; or (b) the date of delivery, if service is personal.

(7) Answer to Statement of Charges Within 28 days after service, the charged attorney must submit to the chief judge an answer to the statement of charges showing cause why the attorney should not be disciplined. The answer must take the form of an answer to a complaint in an adversary proceeding and must comply with Rules 7008 and 7010 of the Federal Rules of Bankruptcy Procedure and Rule 5005-3(A) of these rules. (8) Failure to Answer If the charged attorney fails to answer the statement of charges, the allegations will be treated as admitted. The chief judge will then enter an order imposing either the discipline proposed in the statement or lesser discipline, as the chief judge determines.

(9) Appointment of the United States Trustee The bankruptcy court may appoint the United States Trustee for this region to investigate a complaint of misconduct and prosecute a statement of charges. The United States Trustee may decline the appointment and must notify the chief judge of that decision within 30 days. The bankruptcy court may then elect either to dismiss the proceeding or ask a member of the bar to investigate the complaint of misconduct and prosecute the statement of charges. (10) Assignment to Judge for Hearing 41 If, after the charged attorney has answered the statement of charges, the bankruptcy court determines by a majority vote that an evidentiary hearing is warranted, the chief judge must assign the disciplinary proceeding to a judge for hearing.

(11) Discovery The United States Trustee or any other investigating or prosecuting attorney and the charged attorney may take discovery under Rules 7030 through 7037 and 9016 of the Federal Rules of Bankruptcy Procedure. (12) Hearing The Federal Rules of Evidence apply in a hearing on a statement of charges. The party prosecuting the complaint has the burden of proving by a preponderance of the evidence that the attorney charged has committed misconduct. (13) Decision On completing the hearing, the assigned judge must issue a written decision making findings of fact and conclusions of law, determining whether the attorney charged has committed misconduct, and if so, imposing appropriate discipline.

A separate order imposing discipline must be entered consistent with the decision. (14) Appeal An order under section (B)(13) of this Rule is a final order, appealable as of right to the Executive Committee of the district court. Part VIII of the Federal Rules of Bankruptcy Procedure governs all appeals from disciplinary orders of the bankruptcy court, except that Rule 8006 does not apply. C. Emergency Interim Suspension If the chief judge determines that the misconduct charged poses a genuine risk of serious harm, the chief judge may, after notice to the attorney and an opportunity for a hearing, enter an order immediately suspending the attorney from practice before the bankruptcy court until the charges are resolved.

An interim order suspending an attorney is appealable under (B)(14). D. Suspension on Consent (1) Stipulation of Facts and Declaration Whether or not a complaint of misconduct has been submitted or a statement of charges issued, an attorney may consent to suspension from practice before the bankruptcy court by delivering to the chief judge a signed stipulation. The stipulation must 42 (a) state the facts warranting the attorney’s suspension; (b) declare that the attorney consents to suspension; (c) declare that the attorney’s consent is knowing and voluntary; and (d) propose a period of suspension. The period of suspension may be indefinite or a defined time.

(2) Order (a) On receiving the stipulation, the chief judge must enter an order suspending the attorney for the proposed period, unless the chief judge decides the order is unreasonable. (b) If the chief judge decides that the order is unreasonable, the matter must be referred to the bankruptcy court for decision by majority vote. The bankruptcy court must then decide whether suspension is warranted, and if so, whether the proposed period of suspension is reasonable. (i) (ii) If the bankruptcy court decides that suspension is unwarranted, no order suspending the attorney will be entered.

If the bankruptcy court decides that suspension is warranted but the proposed period of suspension is unreasonable, the bankruptcy court must determine a reasonable period. The chief judge must enter an order consistent with the court’s decision. (c) An order suspending an attorney on consent is a matter of public record. E. Reinstatement (1) Reinstatement when Suspension is 90 Days or Fewer An attorney suspended for 90 days or fewer is automatically reinstated at the end of the period of suspension.

(2) Reinstatement when Suspension is More than 90 Days An attorney suspended for more than 90 days may not practice in the bankruptcy court until reinstated by order of the bankruptcy court in response to a petition for reinstatement. The attorney may petition for reinstatement any time after the period of suspension. (3) Reinstatement when Suspension is for an Indefinite Period 43 An attorney who is suspended indefinitely may not practice in the bankruptcy court until the bankruptcy court by order reinstates the attorney in response to a petition for reinstatement. The attorney may petition for reinstatement after five years from the effective date of the suspension.

(4) Presentation of Petition A petition for reinstatement must be filed with the clerk. The clerk must present the petition to the bankruptcy court which, by a majority vote, must either (a) grant or deny the petition without an evidentiary hearing; or (b) decide that the matter requires an evidentiary hearing before a judge assigned by the chief judge. (5) Appointment of the United States Trustee The bankruptcy court may appoint the United States Trustee for this region to investigate a petition for reinstatement and support or oppose reinstatement. The United States Trustee may decline the appointment and must notify the chief judge of that decision within 30 days.

The bankruptcy court may then ask a member of the bar to investigate the petition and oppose or support reinstatement. (6) Hearing The Federal Rules of Evidence apply in a hearing on a petition for reinstatement. The petitioning attorney has the burden of proving by clear and convincing evidence that (a) the attorney has the character and fitness necessary to practice in the bankruptcy court; and (b) the attorney’s practicing in the bankruptcy court will not be detrimental to the administration of justice. (7) Decision by Assigned Judge On completing the hearing, the assigned judge must issue a written decision making findings of fact and conclusions of law and deciding whether the petitioner should be reinstated.

A separate order consistent with the decision must be entered. (8) Grant or Denial of Petition If the petitioning attorney fails to prove fitness to practice in the bankruptcy court, the petition for reinstatement must be denied. If the petitioner is found fit to practice, the petition must be granted and the petitioning attorney reinstated, but reinstatement may be subject to conditions, including partial or complete restitution to parties harmed by the conduct that led to the suspension. 44 (9) Appeal An order granting or denying a petition for reinstatement is a final order, appealable as of right to the Executive Committee of the district court.

Part VIII of the Federal Rules of Bankruptcy Procedure governs all appeals from disciplinary orders of the bankruptcy court, except that Rule 8006 does not apply. (10) Successive Petitions for Reinstatement If a suspended attorney’s petition for reinstatement is denied, the attorney may not file another petition for reinstatement for one year from the date of the order denying the petition. F. Notice to Executive Committee and ARDC After an order has been entered under section (B)(13) of this Rule imposing discipline, section (D)(2) of this Rule suspending an attorney on consent, or section (E)(7) of this Rule granting or denying a petition for reinstatement, and after all appellate rights have been exhausted, the clerk must transmit a copy of the order to the Executive Committee of the district court and to the Illinois Attorney Registration and Disciplinary Commission. RULE 9029-4C RESTRICTED FILERS A. Restricted Filers A party who has abused the processes of the bankruptcy court may be prohibited, after notice and an opportunity to be heard, from filing any documents with the clerk, including petitions, claims, and adversary complaints, unless permission is granted under (F).

B. Procedure (1) Request for Restriction Any judge of the bankruptcy court, any judge of the district court, or the United States Trustee for this region may submit to the chief judge of the bankruptcy court a written request asking the bankruptcy court to declare a party a restricted filer and prohibit that party from filing documents. (2) Initial Decision On receiving a request under (1), the chief judge must submit the request to the bankruptcy court for consideration. After considering the request, the bankruptcy court must decide by majority vote either (a) that the request merits no action; or 45 (b) that the request may merit action, and a response is warranted. (3) Request for Response If the bankruptcy court decides that a response is warranted, the chief judge must notify the party in writing.

The notice must: (a) state that the bankruptcy court has been requested to restrict the party’s right to file documents; (b) give the reasons why the restriction has been requested; and (c) state that the party has the right to respond to the request in writing within 30 days. (4) Final Decision After receiving the response, or after the time to respond has expired, the chief judge must submit the request and any response to the bankruptcy court. After considering the request and any response, the bankruptcy court must decide by majority vote either (a) that the request merits no action; or (b) that the party should be declared a restricted filer. If the bankruptcy court determines that the party should be declared a restricted filer, the bankruptcy court must also determine the terms of the restriction.

C. Terms of Restriction The terms of the restriction must (a) include the length of the restriction, which may not be more than 10 years; (b) allow the restricted filer to request that the restriction be lifted; and (c) explain how a request to have the restriction lifted should be made, when a request can first be made, and how frequently such requests may be made. D. Order (1) The decision to declare a party a restricted filer must be set forth in an order signed by the chief judge. The order must contain the terms of the restriction under (C) and describe how the restricted filer can request permission under (F) to file a document. (2) The clerk must docket the order in a separate miscellaneous proceeding under the 46 restricted filer’s name and must send a copy to the restricted filer by regular mail.

E. Restricted Filers List The clerk must maintain a current list of parties declared restricted filers under this Rule. F. Documents Filed by Restricted Filers (1) Refusal of Documents Unless Accompanied by Motion. (a) A document that a restricted filer submits for filing must be returned unfiled unless accompanied by a written motion requesting permission to file the document. (b) If a restricted filer submits a document for filing along with a written motion requesting permission to file the document, the clerk must not file the document or the motion but must stamp them “received” and deliver them to the chief judge, or some other judge that the restricting order designates, for decision.

(2) Decision on Motion (a) If the motion is granted, the judge must sign an order granting it. The clerk must docket the order in the miscellaneous proceeding, file the documents submitted in the bankruptcy case or adversary proceeding, as applicable, and mail to the restricted filer a copy of the order and a stamped copy of the documents. (b) If the motion is denied, the judge must sign an order denying it. The clerk must docket the order in the miscellaneous proceeding and must mail the order to the restricted filer along with the documents submitted for filing.

G. Appeal Orders under (D) declaring parties restricted filers and under (F)(2) denying motions of restricted filers permission to file documents are final orders, appealable as of right to the Executive Committee of the district court. Part VIII of the Federal Rules of Bankruptcy Procedure governs all appeals from orders under this Rule, except that Rule 8006 does not apply.