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Third Circuit Rules Attorneys Can Keep Illegally Obtained Fees

The Third Circuit has issued an opinion saying that attorneys can keep a client's fee, even if the money was illegally obtained by the client, so long as the attorney has a good faith reason to believe the fees were legal. The case arose in the context of a bankruptcy case. The court ruled,

The issue is whether the facts known to the firms and the reasonable inference to be drawn from those facts would affirmatively suggest to a reasonable person in their position that they were receiving assets of the estate. If not, there would be no duty to investigate."

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