In re SONICblue

Pillsbury Winthrop Shaw Pittman (Pillsbury), as counsel to SONICblue (Sonic), provided institutional bondholders a written opinion letter attesting to the quality of $75 million in Sonic bonds shortly before Sonic filed bankruptcy; after Pillsbury was approved as Sonic's bankruptcy counsel and filed multiple disclosure statements never mentioning the opinion letter, Pillsbury helped Sonic challenge the bondholders' claims, prompting the bondholders to demand Pillsbury defend and indemnify them given its earlier favorable opinion. Pillsbury transferred the bondholder challenge to counsel for the unsecured creditors committee but still never filed a supplemental disclosure about the conflict.