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MATTER OF FUTURONICS CORP.

Nos. 507, 566, 885, 886, 887, Dockets 80-5032-3, 80-5046, 8, 80-5050.

655 F.2d 463 (1981)

In the Matter of FUTURONICS CORPORATION, Debtor. FUTURONICS CORPORATION, Debtor-Appellee-Cross-Appellant, v. ARUTT, NACHAMIE & BENJAMIN and Arutt, Nachamie, Benjamin, Lazar & Kirschner, P.C., Appellants-Cross-Appellees, Israel & Raley, Appellant-Cross-Appellee.

United States Court of Appeals, Second Circuit.

Decided July 2, 1981.

As Modified on Denial of Rehearing August 7, 1981.

Attorney(s) appearing for the Case

Alex Spizz, New York City (Arutt, Nachamie, Benjamin, Lipkin & Kirschner, P.C., New York City, of counsel), for appellants-cross-appellees.

Mortimer S. Gordon, New York City (Joseph Chase, James Lehrburger, Hall, Dickler, Lawler, Kent & Howley, New York City, of counsel), for appellant-cross-appellee Israel & Raley.

Gary L. Blum, New York City (Daniel A. Zimmerman, Finley, Kumble, Wagner, Heine, Underberg & Casey, New York City, of counsel), for debtor-appellee-cross-appellant.

Before OAKES and MESKILL, Circuit Judges, and SAND, District Judge.

MESKILL, Circuit Judge:

Once again we are faced with the unsavory task of reviewing the propriety of an order imposing sanctions upon counsel for a party in a bankruptcy proceeding based upon attorney misconduct. Two law firms, Arutt, Nachamie & Benjamin (the "Arutt firm") and Israel & Raley (the "Israel firm"),1 which represented the debtor-in-possession, Futuronics Corporation (Futuronics), in a proceeding under Chapter XI of...

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