In a recent decision in the Chapter 11 case of Project Orange Associates, LLC1, the court confronted an important issue that often arises in bankruptcy cases: whether the use of conflicts counsel is sufficient to permit court approval under section 327(a) of the Bankruptcy Code of a debtor’s choice for general bankruptcy counsel that also represents an important creditor of the debtor in unrelated matters. Here, the conflict involved the debtor's largest unsecured creditor and an essential supplier.

Today, the Board of the Federal Deposit Insurance Corporation took the following actions:

On Friday, the Washington Department of Financial Institutions closed Washington First International Bank, headquartered in Seattle, Washington, and appointed the FDIC as receiver. As receiver, the FDIC entered into a purchase and assumption agreement with East West Bank, Pasadena, California, to assume all of the deposits of the failed bank.

Yesterday Treasury released "guidance on its role in the exploration of a possible initial public offering of the common stock of General Motors Company." Under the Troubled Asset Relief Program, Treasury acquired 60.8% of GM's common stock and $2.1 billion of its preferred stock in connection with GM's restructuring last summer.

On Friday, the Office of the Comptroller of the Currency closed First National Bank, headquartered in Rosedale, Mississippi, and appointed the FDIC as receiver.

On Friday, the Florida Office of Financial Regulation closed three bank subsidiaries of Bank of Florida Corporation: (1) Bank of Florida – Southeast, Fort Lauderdale, Florida; (2) Bank of Florida – Southwest, Naples, Florida; and (3) Bank of Florida –

On Friday, the Office of the Comptroller of the Currency closed Granite Community Bank, N.A., and appointed the FDIC as receiver.

On Friday, the Nevada Financial Institutions Division closed Sun West Bank, headquartered in Law Vegas, Nevada, and appointed the FDIC as receiver. As receiver, the FDIC entered into a purchase and assumption agreement with City National Bank, headquartered in Los Angeles, California, to assume all of the deposits of the failed bank.

Yesterday, Lehman Brothers Holdings Inc. (LBHI) and the Official Committee of Unsecured Creditors of LBHI (the Committee) filed a complaint against JPMorgan Chase Bank, N.A. (JPMorgan) in the U.S. Bankruptcy Court for the Southern District of New York.

On Friday, the Executive Commission of the Bank of Spain appointed the Fund for Orderly Bank Restructuring (FROB) as interim administrator of Roman Catholic Church-controlled savings bank Caja de Ahorros y Monte de Piedad de Córdoba (CajaSur).