An international law firm seeking court approval to be employed by a debtor asserted that no conflict arose from: (i) the law firm's representation, in unrelated matters, of affiliates of the debtor's major creditor and (ii) the law firm's foreign arm's representation, in unrelated matters, of the debtor's major creditor. However, the law firm itself had previously obtained a conflict waiver from the creditor entities, indicating that it perceived a potential conflict. In addition, in connection with the conflict waiver, the law firm promised not to sue the creditor or any affiliates of the creditor. The court noted that the law firm's position: "followed to its logical conclusion, would lead to the anomalous result that [the law firm], on behalf of one client, could be adverse to [the law firm's international arm], on behalf of one of its clients, without violating ethical standards."

The law firm asserted that despite these issues it had no actual conflict, since it sought to represent the debtor only in negotiating a plan with the creditor. The law firm proposed the use of conflicts counsel to address other aspects of the debtor's relationship with the creditor, such as claim resolution and any litigation. The court held that where a conflict exists with respect to the central creditor in a case, use of conflicts counsel is insufficient to warrant employment.