Bankruptcy Court Suspends Counsel for Changing Schedules After Signing. Employing “Trust But Verify” the Court “Peeked and Shrieked.”

Posted by NACBA - June 26, 2019

It’s going to be a bad opinion when the judge brings up Pandora’s Box in the beginning of the opinion and titles the last section of the opinion “This Is The End.”

On June 25, 2019 the Bankruptcy Court for the Southern District of Florida, in a 172 page opinion (including attachments), suspended an attorney from practice for two years before the Bankruptcy Court, terminated her CM/ECF privileges, referred the attorney to District Court’s attorney review committee and the Florida Bar with recommendations to disbar, and referred the attorney to the United States attorney for investigation.

The Debtor filed a chapter 7 bankruptcy.  He was represented by the Attorney.  Neither Debtor nor Attorney attended the 341 meeting.   Subsequently the trustee filed an adversary objecting to the Debtor’s discharge pursuant to 11 U.S.C. § 727(a)(2), (3), and (4).  The bases of the Trustee’s complaint were that Debtor’s schedules indicated virtually no detail, were not consistent with other documents the trustee received (tax returns), and that required information was apparently missing (missing lawsuit).  In addition, the Trustee cited Debtor’s and Attorney’s failure to attend the 341 meeting.  When asked by the Trustee, the Attorney said they didn’t plan on proceeding and wanted the case dismissed.

Two days after the adversary was filed, Attorney moved to withdraw as counsel for Debtor.  The Debtor, now pro se, stated to the Trustee that the schedules were not provided to him prior to filing and that he did not sign the schedules that were actually filed. 

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