Bankruptcy Law Firm Banned From Practicing Bankruptcy Law In Central Florida Bankruptcy Court, That Can't Be Good

An Orlando Sentinel story reports on the Order of U.S. Bankruptcy Judge Arthur Briskman banning the multi-state law firm of Kaufman, Englett and Lynd (at the link their laswfirm website) from practicing bankruptcy law in Central Florida.  He appears to be motivated by professional wrongdoing by one of it's attorneys.  This is an excerpt from reporter Bianca Prieto's story: 

"A series of  'missteps' and 'lack of diligence' by a lawyer practicing with Kaufman, Englett and Lynd has prompted a United States Bankruptcy judge to bar the firm and the lawyer from practicing in Bankruptcy Court in the Middle District of Florida until further notice.



William Sanchez

U.S. Bankruptcy Judge Arthur Briskman signed the three-page order today after Attorney William J. Sanchez, who is representing an Orlando couple in a bankruptcy case, failed to appear in court today despite a court order he attend the hearing.  Instead, Andrea G. Dwyer, another lawyer with KEL, attended the hearing. Dwyer said Sanchez did not attend the hearing 'because he was attending to other matters,' the order stated. It's not immediately clear what those matters were.

The order barring the firm from practicing in the court means KEL will not be allowed to file paperwork in any case until the issue with Sanchez is resolved. It's unclear how many cases will be affected.

The firm is allowed to interact with the bankruptcy court to sort out the current issue, which was not specified in the order.  A statement issued by KEL said in part that the firm is working to 'make amends with the Court.' [ed. how about making amends to the clients?]  The law firm recently bought the advertising space at the top of a downtown Orlando high rise on Washington Street at Magnolia Avenue. The firm has offices in several states across the U.S[.]
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The Bad Lawyer, myself, represented thousands of injured workers and in the last decade of his active career many employers in OurState workers' compensation courts.  There were many lawyer-malefactors who routinely ignored hearing notices, filing requirements, rules and regulations with impunity.  Currently within this world one law firm stands out as particularly egregious, but it's going to take an Order like the one issued vis-a-vis KEL to put an end to their abusive practices.   I'm sure lawyers in every venue and in every practice-area have similar stories.

Pedro's Malpractice Suit--Update!

In August, 2009 I reported to you that I was sued in Malpractice by a client I dubbed Pedro.  At that point , some 27 years into the practice of law I had never been sued for malpractice.  I confess that I was devastated.  I didn't know it at the time but this claim would turn out to be the least of my problems. Back then, I laid out  the malpractice claims and defense for you as straight-forwardly as I could at that time.   I concluded that while I had not caused Pedro's damages--that I had not committed malpractice, I also did not live up to my own expectations in providing legal services to a client. 

After a bench trial, here, in OurCounty a distinguished OurCounty Common Pleas (and former appellate Judge), disagreed with my self-assessment and entered a $300,000 judgment against me. 

During the the time that  I was incarcerated for attempted income tax evasion, my lawyer, the Sainted Lester, undertook pro bono to appeal the judgment.  This afternoon I received the opinion of the OurCounty Court of Appeals unanimously reversing the judgment against me and ordering the appellant to reimburse our costs.   I'll write more about this part of the case--I'm clearly not crowing about how damn wonderful I am or was, I'm not--still, news of the reversal of the judgment against me is greatly encouraging and a tremendous relief. 

Thank you, Lester.  You are a great attorney and wonderful dear friend.  Thank you for standing by me. 

One more step forward.

Call Pavilack Today!

Reporter David Wren at the Myrtle Beach Sun reports on the local personal injury lawyer caught in Titanic debt.  The lawyer Harry Pavilack is also one of the regions big time advertisers.  He is reportedly causing major headaches for creditors and bankruptcy examiners trying to assess what remains of assets.  In one remarkable moment described by reporter Wren, Pavilack who was being examined by the bankruptcy investigator in Pavilack's office.  Attorney Pavilack goes "off the record" to collect nearly a million dollars he hid in an office closet.

Wren's original story is quite detailed and is presented below, in excerpt:

"Harry Pavilack - the Myrtle Beach lawyer perhaps best-known for his television commercials and billboards urging potential clients to Call Pavilack Today!' - is $72.5 million in debt and is facing allegations in bankruptcy court that he could be hoarding cash and hiding assets from creditors, court records show. The allegations were raised in a report last week by George DuRant, a court-appointed examiner from Columbia who said Pavilack has been taking cash out of his corporations, transferring some of his assets to relatives and friends and opening bank accounts in Peru.

Pavilack, 70, initially told The Sun News he would schedule an interview through his lawyer, William McCarthy of Columbia. Pavilack did not schedule the interview and McCarthy did not respond to requests for comment.  Court records show a Myrtle Beach attorney well known for his television commercials and highway billboards is almost $73 million in debt. 
[Bankruptcy examiner] DuRant, in his report, said Pavilack has been conducting mainly cash transactions since February 'in order to frustrate the collection efforts of a creditor.'

That creditor is Shaul and Meir Levy, the owners of the Wings beachwear stores, according to court records. The Levys obtained a $2.5 million judgment against Pavilack and others this year over a failed condominium project.  Pavilack - who has refused to say how much cash he has on hand, according to DuRant's report - handed the examiner three stashes of cash totaling $1.1 million this month after another court-appointed investigator stressed to Pavilack the importance of disclosing assets.

Pavilack retrieved one of those stashes - totaling $994,400 - from the closet in his law office, DuRant said. DuRant told The Sun News that he did not want to comment on his investigation. 'The report will have to speak for itself,' he said.  In his report, DuRant said Pavilack's financial records are in such disarray that it might be impossible to determine how much money exists and where it all is.

Among the problems, according to DuRant's review of 39 general ledgers for Pavilack's businesses: Deposits and withdrawals are incomplete, inaccurate and lack documentation; asset transfers between Pavilack and the entities he controls are poorly documented and remain unaccounted for; real estate transfers are not recorded; and at least $3 million in certificates of deposit have been unaccounted for since the end of 2007. In addition, a court-appointed accountant said she is not able to complete Pavilack's 2009 personal tax return because 'his income and expenses could not be determined,' the report states.  'At this stage, it is impossible for the examiner to determine if the cash turned over to date is all or only a portion of the total amount of cash held by [Pavilack],' DuRant said in his report.

'Unfortunately, the trail for [Pavilack's] cash transactions is cold, and accurately reconstructing the trail from [Pavilack's] memory and from third parties seems a pipe dream,' DuRant stated.
Pavilack - a W.Va. native who grew up in Pittsburgh and earned his law degree in 1966 at the University of South Carolina - initially estimated that he had assets totaling $50,000 or less, according to a bankruptcy court petition he filed in September.  Less than two months later - after disclosing at least some of the cash he was holding to the examiner - Pavilack filed another court document showing about $8.9 million in assets.

Those assets include a condominium in New York City; two homes in Myrtle Beach, one along the oceanfront and another along the Intracoastal Waterway; and eight automobiles, including three Bentleys and a Lexus. Although Pavilack's vocation was the law, property records and court documents show he also was one of this area's most prolific real estate investors.

Pavilack says in court documents that he owes about $72.5 million to creditors, most of it mortgages and personal guaranties on real estate loans. DuRant estimates that Pavilack has created more than 60 corporations that own more than 400 homes, commercial buildings and real estate parcels in at least six states.  Some of those corporations are empty shells that have no purpose other than to provide an entity for a bank account, DuRant said." [ . . . ]
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Do not screw around with the bankruptcy court.  Pavilack's retrieval of the $994K from his closet during his bankruptcy deposition is documented acknowledgement of fraud.  He's screwed.

By the way, my take on this story is that Pavilack was running a classic "legal services brokerage," while actually trying to make and protect his real estate fortune.  Things must have been rockin' for him for a long time--that is, until the real estate market collapsed.  I wonder what culpability the creditors had in terms of due diligence prior to making he loans that provided the structure for this house of cards?

Falling Out of the Material World

Dennis "Denny" Hecker (pic, below right), was a Minneapolis car dealer.  This was the big local guy.  Every city or region has one or more of these guys (they have always been men, in my experience--although didn't Marge Schott operate a Cincinnati dealership?) Their last names are ubiquitous with various models of cars.  They might do their own (grating) commercials.  In gridlock traffic you stare at their nameplates on the back of automobiles in front of you. 

Here in OurTown, there are several names that have been reverberating on teevee and radio since I was child, now the third or possibly the fourth generation of that name is hawking cars on cable.  One of these dealers thinks being car dealer qualifies him to be in Congress and is the nominee of the Tea Party--that ought to tell you something about the credibility of the Tea Party.

I digress, back to Denny Hecker.  Hecker hit the skids around the same time as the Scott Rothstein ponzi scheme was in the news; and I made the decision that Rothstein's collapse was more interesting in part because Rothstein was a lawyer and especially because of all the politicians who were taking Rothstein's dime (ahem, McCain, Crist, and so many others.)  What Hecker and Rothstein have in common was the near simultaneous publicity surrounding the sale of their bullshit-material acquisitions, cars, yachts, wet bars.  In Hecker's case they sold off his life-size porcelain Elvis. 

Hecker's problems are in many ways more accessible to all of us.  He got in over his head.  Way over his head.  Ultimately, Hecker filed a bankruptcy petition trying to discharge three-quarters of a billion dollar in debt arising out of personally-guaranteed loans to his various businesses.  The bankruptcy "discharge" (official foregiveness of debt) was denied based on evidence of criminal fraud. 

During all this Hecker's various problems were aggravated when he was unable to give up the affluent lifestyle.  Even with federal bankruptcy judges and prosecutors breathing down his neck Hecker continued his county club dining and private schools for his children.  Since June of 2010 Hecker is alleged to have received and spent $200,000.  The authorities suspect, according to numerous stories at the St. Paul Pioneer Press and Minneapolis Star Tribune, that Hecker is hiding assets. A girlfriend was busted, doing precisely that.  She admitted to sheltering money he gave her when questioned by federal investigators.

Yesterday, a federal judge put Hecker in the slammer.  Here's the story from TwinCities.com--which has a comprehensive archive of Hecker stories.   You can also read a Wall Street Journal article detailing aspects of the bankruptcy proceedings.

My family is embracing our fall out of the material world, as I have discussed previously on Bad Lawyer.  I woke up Tuesday morning feeling a lot like a drowning man, or maybe like Jonah in the belly of the Leviathan;  pretty dark and hopeless.  When you are caught in the maw of the justice system, right or wrong, you are thoroughly chewed.  As a lawyer I should have known that this is how it would feel.  I'm aware that my actions caused this sort of distress for others over three decades.  So while I can assure you that guys like Hecker and guys like the Bad Lawyer, brought these events upon ourselves, it is no less agonizing.

Hecker wanted, among other things, to pay his kids tuition at the school his kids were already attending; I'd like to provide a safe and familiar place for my pregnant teenager to bring her baby home when she delivers him in January.  You see, I fully understand what motivated Hecker's conduct as outlandish as it may seem.  We live in a material world. He was out of control, I was out of control--it's merely a matter of scale. 

I pray that my family survives this fall, I hope my children can draw the most important of all lessons:  the material world is an illusion.

Corrupt Judges and Lawyers! We Love You Louisiana

Louisiana Federal District Judge Thomas Porteous is in the process of being impeached, and it's likely he will be sent to prison.  According to news accounts, Porteous is a longtime serving State and Federal judge.  The Times-Picayune wrote in t 2006, that Judge Porteous was one of Lousisiana's most popular jurists, first elected to the State bench and subsequently appointed to the US District Court by President Bill Clinton.

Porteous' popularity stemmed from his charismatic character, self-deprecating humor, generosity to support staff.  His friends were the cream of the New Orleans Bar; he never lunched alone or in later years, picked up a check.  In fact, Porteous was so deeply in debt due to a gambling addiction he surreptitiously  filed personal bankruptcy under a pseudonym.  You ask, how? Well, I'll revisit the how in a subsequent post--let's just say the questions surrounding Judge Porteous are endless.  After getting released from his gambling-related indebtedness, Porteous returned to the tables and fell even deeper into debt.

The part I wish to focus on are the attorneys who got involved in the corruptions.  According to news reports many notable Louisiana lawyers are lined up to take the fall with the Judge for bribery, and corruption.   Robert Creely and Jacob Amato, two of Judge Porteous attorney pals told a Congressional panel that hey had been making cash payments to the Judge in exchange for assignments from the bench for over a decade.  Disciplinary charges are pending against them.  Three other attorneys:  Don Gardner, Leonard Levenson and Warren "Chip" Forestall  are also known to have provided Judge Porteous with gifts and cash.  The anecdote that is most disturbing to me concerns the Judge's May 1999 trip to Vegas for his son's bachelor's party, Attorney Creely helped pay for the trip, Attorney Gardner was in the midst of litigation in Porteous's court and Creely's partner, Jacob Amato represented one of the other parties.  It's confusing, but if you're at all interested in the ideal of impartial justice--the convoluted tale of corruption should hit you right in the pit of the stomach.

Years ago I was handling a case involving a very powerful nursing home operator in a small county near the border of Our State,  neither the nursing home operator or my client had any particular ties to this county or its court.  The nursing home operator was accustomed to having his way--so, Mr. Nursing home Operator bought the County Prosecutor's son, a ne'er-do-well lawyer who couldn't sue his way out of wet tissue.  The lawyer son did nothing in exchange for this employment except sign documents, a brilliant lawyer from the state capital who specialized in nursing home law did all the work.  During the pendency of the lawsuit the Judge assigned to the case attended a "reverse raffle" as a guest of the prosecutor, and the prosecutor's son--message sent, message received.    My client dismissed her case.

I've said many times, here at the Bad Lawyer blawg, that it was rare occasion that I encountered real corruption among judges--while we the people encounter and engage in institutionally corrupt or perverse judicial selection, lawyering, and justice--the few really corrupt judges, still have the power to strike awe.

http://www.nola.com/crime/index.ssf/2009/11/disbar.html