.jpg)
Ethics issue
Nancy,
I had a situation I knew about pre-341a not involving hiding/transferring
assets. I told my client we were going to take the 5th, but for a different
purpose: the debtor had a criminal case pending and I did not want him to
disclose something which could be used in the other matter.
Trustee inquired about the nature of a debt, and I immediately jumped in and
asserted the 5th amendment protection for my client. The trustee was
stunned, and asked the question a different way. I responded "assumes facts
not in evidence" and advised my client not to answer. The trustee,
hopefully relying on the fact that they knew me from seeing me at the table
hundreds of times, and sensing I wasn't being a jerk but protecting my
client, gamefully tried to ask the magic question without prompting a
response from me.
I was prepared to take the matter up and be settled by a judge, if
necessary. Thankfully, it never came to that.
The debtor received his discharge.
Hale
_____
The post was migrated from Yahoo.
I also had an experience a few years ago with a debtor who ended up being an
embezzler of millions, a fact she did not think was important to tell me. I
discovered this information at the 341A hearing when the attorney for the
company she embezzled from appeared at the hearing. Luckily for her the
attorney was inept with his questions and the trustee thought it was just
another creditor claiming fraud. I now ask clients if they have ever
embezzled. I told her that she needed to either set forth the information
in her schedules or I would get out. She was not willing, so I filed a
motion to withdraw based on vague grounds of "noncooperation" and got out.
She got her discharge but is currently in jail.
The post was migrated from Yahoo.
Dear Nancy,
I've had several experiences with this.
One time the client told me one thing and when he saw the FBI sign in
the hearing room, he got cold feet and explained it. We had to file a
complete report with the trustee, who then dropped the issue.
The second time, the client was flipping properties and didn't tell me
until after the trustee brought it up. Again, a length report with 23
exhibits, and the trustee was satisfied.
The dividing line in my experiences is the Scienter element. Three
possible outcomes:
1. The trustee sees that the client is not particularly fluent in
English and misunderstood the question. Or was so stressed over the
whole process that the question went over his/her head (I get Hispanic
clients and/or middle eastern clients who walked into situations they
neither understood nor could control, and they lacked the vocabulary
to explain them, even under questioning).
2. The trustee sees that the client is so unsophisticated that the
significance of the question was beyond the client's ability to
comprehend. (In one of my cases, the client went from appliance
repairperson to house flipper, all with a half-digested high school
education).
3. The dangerous one is when the client obviously knew exactly what
he was doing, and that's a judgment call each attorney must make.
I've handled "FBI sign fever" by having a copy of the FBI hearing sign
made and showing it to clients, whether I believe them or not.
The post was migrated from Yahoo.
Armen-
Sorry to disagree with you but I was a trustee administrator for several
trustees in this district early in my career and that is the policy.
Lesley
On Jan 1, 2012 8:28 AM, "Armen Shaghzo" wrote:
> **
>
>
> ** Sorry to disagree. Trustee nay take the 5th. That option us the
> debtor's. Indeed the Tee can and most likely will call the UST, but again
> the only person who makes that choice, to invoke or not to invoke the 5th,
> is the client. Also why is everyone walking on eggshells on this issue? If
> PC's client has been aboveboard with the client then counsel should be able
> to deal with all new developments.
> Sent via BlackBerry
> ------------------------------
> *Sender: * cdcbaa@yahoogroups.com
> *Date: *Thu, 29 Dec 2011 17:10:26 -0800
> *To: *
> *ReplyTo: * cdcbaa@yahoogroups.com
> *Subject: *Re: [cdcbaa] Ethics issue
>
>
>
> Nancy-
>
> A debtor at the 341(a) cannot take the 5th. If the debtor does take the
> 5th. The Trustee has to stop the 341(a) and call the UST in at that time.
>
> Lesley
>
> On Thu, Dec 29, 2011 at 5:03 PM, Patrick T. Green wrote:
>
>> **
>>
>>
>> Nancy:****
>>
>> ** **
>>
>> I will interested to hear others thoughts. Mine are: (1) definitely stop
>> the client from answering further questions. (2) By taking the fifth or
>> terminating the hearing. It is not a courtroom, the tee is not a judge
>> (although some think they are) so he cannot hold the client in contempt.
>> It is time for damage control, which starts with referring client to
>> criminal counsel and withdrawing from representation.****
>>
>> ** **
>>
>> If you have any questions or concerns please contact me.****
>>
>> ** **
>>
>> Pat****
>>
>> ** **
>>
>> Patrick T. Green****
>>
>> Attorney at Law****
>>
>> 1010 E. Union St. Suite 206****
>>
>> Pasadena, CA 91106****
>>
>> Tel: 626-449-8433****
>>
>> Fax: 626-449-0565****
>>
>> Email: pat@fitzgreenlaw.com****
>>
>> ** **
>>
>> ** **
>>
>> ** **
>>
>> ** **
>>
>> ** **
>>
>> *From:* cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] *On
>> Behalf Of *Nancy Clark
>> *Sent:* Thursday, December 29, 2011 4:13 PM
>> *To:* cdcbaa@yahoogroups.com
>>
>> *Subject:* RE: [cdcbaa] Ethics issue****
>>
>> ** **
>>
>> ****
>>
>> I want to stress this is not my case but I am curious as to whether as
>> the attorney appearing at the hearing you should even attempt to stop the
>> interview for fear that the debtor may be brought up on criminal perjury
>> charges. In ten years this has never happen to me but I listened to
>> questioning of a debtor recently that made me thing of this.****
>>
>> ****
>>
>> Thank you,****
>>
>> Nancy B. Clark****
>>
>> [image: Description: untitled]****
>>
>> 100 N. Barranca Ave, Suite 250****
>>
>> West Covina, CA 91791****
>>
>> Tele: (626) 332-8600****
>>
>> Fax: (626) 332-8644****
>>
>> www.blclaw.com ****
>>
>> ****
>>
>> ****
>>
>> ****
>>
>>
>> ****
>>
>> *From:* cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] *On
>> Behalf Of *nancybonaccorso
>> *Sent:* Thursday, December 29, 2011 4:06 PM
>> *To:* cdcbaa@yahoogroups.com
>> *Subject:* [cdcbaa] Ethics issue****
>>
>> ****
>>
>> ****
>>
>> You appear with your client at the 341(a) hearing. You review the
>> petition prior to the debtor testifying to make sure that you are on the
>> same page as the debtor. The debtor fills out one of the customary
>> questionnaires provided at the 341(a) hearing. The trustee starts the
>> hearing and asks your client whether he has sold, transfered or given any
>> property within the last four years. Your client testifies that he as not.
>> Then the trustee brings out the smoking gun and asks the debtor whether he
>> ever owned or participated in any way in the sale of a particular property
>> for which he received a specific amount of money. Your client now discloses
>> that he has. He states that he was part of the sale of a property six
>> months prior to filing in which he received a significant amount of money
>> from the sale of the property.
>>
>> You know that your client is in trouble for not disclosing the sale of
>> the property and the funds received. You tell the trustee that you will
>> amend the schedules and correct the issues.
>>
>> The trustee is not satisfied and asks the debtor why he perjured himself
>> on the petition, the questionnaire and in his testimony and starts laying
>> the foundation for a perjury charge by showing each document to the debtor,
>> making him read the question on the petition aloud and reading the answer.
>>
>> What do you do? Can you stop the train wreck that is about to happen. At
>> what point if any do you instruct your client not to answer any further
>> questions for fear of a criminal perjury charge? Thoughts...
>>
>> Thanks,
>> Nancy B. Clark
>> Borowitz & Clark, LLP****
>>
>> ****
>>
>>
>
>
> --
>
> Lesley B. Davis, Esq.
> Lesley Davis Law
> 21601 Vanowen Street, Suite 208
> Canoga Park, CA 91303
> lesleydavislaw@gmail.com
> 424-234-3558 Direct
> 818-337-2191 Fax
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Armen-
Sorry to disagree with you but I was a trustee administrator for several trustees in this district early in my career and that is the policy.
Lesley
On Jan 1, 2012 8:28 AM, "Armen Shaghzo" <ashaghzo@gmail.com> wrote:
Sorry to disagree. Trustee nay take the 5th. That option us the debtor's. Indeed the Tee can and most likely will call the UST, but again the only person who makes that choice, to invoke or not to invoke the 5th, is the client. Also why is everyone walking on eggshells on this issue? If PC's client has been aboveboard with the client then counsel should be able to deal with all new developments.
"mailto:lesleydavislaw@gmail.com" target"_blank">lesleydavislaw@gmail.com>
Sender:
The post was migrated from Yahoo.
charset="US-ASCII"
The other issue is trying to determine when something is perjury or
excusable neglect or language barrier. Most of these issues are fairly
clear. However, some trustee's during examination question any mistake
as intended misrepresentation. I don't mean to speak badly of anyone,
but they sit in a powerful position and their questions are sometimes
biting and snide. Some trustee's treat the debtors as very naughty
children and address the debtor in what I would characterize a fairly
disrespectful manner. For example, I have seen trustee's berate debtors
for not remembering their address, their wedding date, or for not
listing their telephone number on the questionnaire or for not
understanding a question. An appearance attorney or any attorney may be
familiar with that trustee and know that that individual likes to make
snide remarks or treats every mistake as perjury. There are times a
debtor will tell you at the hearing that something was left out of the
petition and discloses it right off the bat to the trustee as an
omission but the trustee proceeds to, again, question the debtor as if
they perjured themselves by not including this information in the
original petition. So, at what point does the fact that your debtor
stated that they were single instead of divorced (because they have been
divorced 20 years and consider themselves single) become an issue of
simple misunderstanding or perjury when you are dealing with a trustee
that enjoys torturing attorney's and debtors with specific details?
In a case of the continued 341(a) for the documents related to the sale
of property, the concealment has already been exposed. The 341(a) has
been continued. You provide amended schedules disclosing the transfer of
the property and the disbursements from the transfer. Your client has
cooperated and continues to cooperate. Do you send your client to a
criminal attorney at that point to advise them regarding the risks of
criminal perjury charges before they attend the continued 341(a)
hearing? Does the appearance attorney have a separate obligation to ask
the debtors at the continued hearing whether they understand their
rights? Does the cooperation with the trustee and the amendments to the
schedule mitigate the damage done by the initial concealment?
Do we need to have a seminar on" criminal perjury?"
Thank you,
Nancy B. Clark
100 N. Barranca Ave, Suite 250
West Covina, CA 91791
Tele: (626) 332-8600
Fax: (626) 332-8644
www.blclaw.com
The post was migrated from Yahoo.
charset="ISO-8859-1"
I agree that this has been a very fruitful discussion, and that a CLE on
these issues would be warranted.
I had the sad experience of appearing for an LA attorney, not on this list,
for a hearing in Santa Barbara. The debtor showed up and told me that he
didnt know why he was there. He had talked to the attorney, but claimed
not to have signed the petition nor authorized the filing of a bankruptcy.
"Brain freeze" describes my state quite well. I went ahead with the meeting
anyway, and allowed the so-called debtor to testify to the fact that this
wasn't his signature and that he did not agree with the filing of a
petition. I'm still not sure what the best course would have been, both for
him and for my liability, but I never even thought about the notion of not
going forward with the meeting.
Thinking about alternatives in this very rote procedure is a good thing.
John D. Faucher
Hurlbett & Faucher, LLP
5743 Corsa Ave., Suite 208
Westlake Village, CA 91362
(818) 889-8080
Fax: (805) 367-4154
http://www.hurlbettfaucher.com/
3324 State Street, Suite O
Santa Barbara, CA 93105
(805) 963-9111
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On 12/29/11 5:32 PM, "Patrick T. Green" wrote:
>
>
>
>
>
> It is really good that Nancy has raised this issue. It not only raises the
> issue of what is the correct thing for the attorney to do, but also what it
> means to be an appearance attorney or use an appearance attorney.
>
> It is important to remember that appearance attorneys may get paid by the
> real attorney, but for the purposes of the hearing at which they appear, the
> appearance attorney is acting as attorney for the client, not the > attorney and has all the responsibility and liability that they would have if
> the client were their client. So the first duty is damage control by
> stopping the questioning. Then of course any appearance attorney with any
> sense at all will want to get the client back to the real attorney as
> quickly as possible.
>
> Having not faced the situation Nancy describes, I am sure my first reaction
> would have been a momentary brain freeze. Now that I have had the luxury of
> thinking about it while safely sitting in my office, I know I will be much
> better prepared should it happen to me.
>
> We need a CLE on bk malpractice and ethics so we will have had the opportunity
> to see some of the pitfalls in our practice so we can reduce our chances of
> getting caught with our pants down.
>
> If you have any questions or concerns please contact me.
>
> Pat
>
> Patrick T. Green
> Attorney at Law
> 1010 E. Union St. Suite 206
> Pasadena, CA 91106
> Tel: 626-449-8433
> Fax: 626-449-0565
> Email: pat@fitzgreenlaw.com
>
>
>
>
>
>
> Armen Shaghzo
> Sent: Thursday, December 29, 2011 5:03 PM
> To: cdcbaa@yahoogroups.com
> Subject: Re: [cdcbaa] Ethics issue
>
>
>
> Ah. Well that would be unfair to the appearing attorney. I would put it on
> second call and call the attorney for instructions. If it is not your case
> you should either be fully aware of what is going on or in the alternative not
> take the matter on. Either way, without the authorization of the attorney of
> record and then conferring with the client, you may be stepping into a
> minefield. If
>
> Sent from my iPhone
>
>
> On Dec 29, 2011, at 4:43 PM, "Nancy Clark" wrote:
>>
>>
>>
>> How about a little changeyou are appearing at a continued 341(a) hearing.
>> The original 341(a) revealed the sale of the property. The trustee asks for
>> documents related to the sale. And are asked to cover the continued hearing.
>> Again, the trustee already has the petition, the questionnaire and the prior
>> testimony. But the trustee starts with the line of questioning that could
>> lead to a perjury charge. You are caught by surprise because the debtor and
>> the attorney have cooperated. Does your appearance attorney have to stop the
>> questioning? Would you have an obligation to instruct your appearance
>> attorney to stop any questioning if it relates to perjury?
>>
>>
>> Thank you,
>> Nancy B. Clark
>>
>> 100 N. Barranca Ave, Suite 250
>> West Covina, CA 91791
>> Tele: (626) 332-8600
>> Fax: (626) 332-8644
>> www.blclaw.com
>>
>>
>>
>>
f
>> John D. Faucher
>> Sent: Thursday, December 29, 2011 4:36 PM
>> To: cdcbaa@yahoogroups.com
>> Subject: Re: [cdcbaa] Ethics issue
>>
>>
>>
>> I would never let a debtor go to a 341 hearing on his/her own. But like Paul
>> suggests, that's more for the debtor's comfort than for the expert legal
>> maneuvering I expect to engage in. I guess I also want to make sure that
>> someone speaks the language so when the trustee asks for amendments, she's
>> not met with a blank stare. Appearance attorneys do this very well for me.
>>
>> I have had only one case where I needed to object to a trustee's questioning
>> I objected based on "assumes facts not in evidence." The trustee
>> immediately said I was out of line, because this wasn't an evidentiary
>> hearing and the rules of evidence dont apply. When I pointed out that he
>> had put my client under oath, given warnings about perjury, and was keeping a
>> transcript, he then threatened to stop the proceeding and haul my client in
>> for a 2004 exam. We ended up working things out, and the client didn't need
>> to answer a trick question.
>>
>> In that particular case, I did a good thing for the client. In most of them,
>> though, it would be counterproductive to speak up.
>>
>>
>>
>> John D. Faucher
>> Hurlbett & Faucher, LLP
>>
>>
>>
>> On 12/29/11 4:21 PM, "Paul Horn" wrote:
>>
>>
>>>
>>> This is an interesting topic. I have wondered this myself, what is the role
>>> of the attorney at the 341 meeting. If attorney speaks up he might come
>>> across as possibly as leading the answer. Are we there just for clients>>> comfort?
>>>
>>>
>>>
>>> Paul Horn
>>>
>>> Attorney at Law
>>>
>>> Certified Public Accountant
>>>
>>>
>>> To: cdcbaa@yahoogroups.com
>>> Sent: Thursday, December 29, 2011 4:13 PM
>>> Subject: RE: [cdcbaa] Ethics issue
>>>
>>>
>>>
>>> I want to stress this is not my case but I am curious as to whether as the
>>> attorney appearing at the hearing you should even attempt to stop the
>>> interview for fear that the debtor may be brought up on criminal perjury
>>> charges. In ten years this has never happen to me but I listened to
>>> questioning of a debtor recently that made me thing of this.
>>>
>>>
>>>
>>> Thank you,
>>>
>>> Nancy B. Clark
>>>
>>>
>>>
>>> 100 N. Barranca Ave, Suite 250
>>>
>>> West Covina, CA 91791
>>>
>>> Tele: (626) 332-8600
>>>
>>> Fax: (626) 332-8644
>>>
>>> www.blclaw.com
>>>
>>>
>>>
>>>
>>>
>>>
>>>
Of
>>> nancybonaccorso
>>> Sent: Thursday, December 29, 2011 4:06 PM
>>> To: cdcbaa@yahoogroups.com
>>> Subject: [cdcbaa] Ethics issue
>>>
>>>
>>>
>>>
>>>
>>> You appear with your client at the 341(a) hearing. You review the petition
>>> prior to the debtor testifying to make sure that you are on the same page as
>>> the debtor. The debtor fills out one of the customary questionnaires
>>> provided at the 341(a) hearing. The trustee starts the hearing and asks your
>>> client whether he has sold, transfered or given any property within the last
>>> four years. Your client testifies that he as not. Then the trustee brings
>>> out the smoking gun and asks the debtor whether he ever owned or
>>> participated in any way in the sale of a particular property for which he
>>> received a specific amount of money. Your client now discloses that he has.
>>> He states that he was part of the sale of a property six months prior to
>>> filing in which he received a significant amount of money from the sale of
>>> the property.
>>>
>>> You know that your client is in trouble for not disclosing the sale of the
>>> property and the funds received. You tell the trustee that you will amend
>>> the schedules and correct the issues.
>>>
>>> The trustee is not satisfied and asks the debtor why he perjured himself on
>>> the petition, the questionnaire and in his testimony and starts laying the
>>> foundation for a perjury charge by showing each document to the debtor,
>>> making him read the question on the petition aloud and reading the answer.
>>>
>>> What do you do? Can you stop the train wreck that is about to happen. At
>>> what point if any do you instruct your client not to answer any further
>>> questions for fear of a criminal perjury charge? Thoughts...
>>>
>>> Thanks,
>>> Nancy B. Clark
>>> Borowitz & Clark, LLP
>>>
>
>
>
>
>
charset="ISO-8859-1"
I agree that this has been a very fruitful discussion, and that a CLE on these issues would be warranted. I had the sad experience of appearing for an LA attorney, not on this list, for a hearing in Santa Barbara. The debtor showed up and told me that he didn’t know why he was there. He had talked to the attorney, but claimed not to have signed the petition nor authorized the filing of a bankruptcy. "Brain freeze" describes my state quite well. I went ahead with the meeting anyway, and allowed the so-called debtor to testify to the fact that this wasn't his signature and that he did not agree with the filing of a petition. I'm still not sure what the best course would have been, both for him and for my liability, but I never even thought about the notion of not going forward with the meeting. Thinking about alternatives in this very rote procedure is a good thing. John D. Faucher
The post was migrated from Yahoo.
charset="US-ASCII"
I agree with Pat, the 341 meeting is not a court room. I have a standing
instruction to all of my clients, if I start talking, you stop talking. I
have had the standard surprises, "oh yeah I forgot about that bankruptcy in
1979..", but nothing like Nancy described. Although I have observed some
interesting 341s, like when ex business partners show up with a binder of
incriminating documents..
I've read 704 (a)(4) "investigate the financial affairs of the debtor " and
the handbook for Chapter 7 trustees; the scope of the trustee's duties is
fairly clear, but what is the scope of their authority conduct
investigations? Or is the question, what is the scope of the 341 meeting
versus a 2004 exam? Can the trustee even ask those questions or should
she/he be kicking it up to the US Trustee's office/DOJ? Is it even
appropriate to take the 5th before a trustee who doesn't the power to order
anything?
Given that it is a bad idea to anger the trustee, I think it is worse to let
the client structure his own defense on the fly and under oath. I would err
on the side of caution, and stop the meeting.
Maybe one of our trustee (or recovering trustee) members could offer some
insight from the other side.
Best regards
Larry Webb
State Bar of California 229344
Central District California
"A Debt Relief Agency"
Larry@webbklaw. com
Law Offices of Larry Webb
484 Mobil Ste 43
Camarillo Ca 93010
P 805.987.1400
F 805.987.2866
C 805.750.2150
The post was migrated from Yahoo.
But the trustee is not the last word on whether there would be perjury charges and s/he was setting the client up under oath for those charges. I would not get to focused on the client losing the discharge when they could be facing jail time and a felony on their record.
If you have any questions or concerns please contact me.
Pat
Patrick T. Green
Attorney at Law
1010 E. Union St. Suite 206
Pasadena, CA 91106
Tel: 626-449-8433
Fax: 626-449-0565
Email: pat@fitzgreenlaw.com
The post was migrated from Yahoo.
It is really good that Nancy has raised this issue. It not only raises the issue of what is the correct thing for the attorney to do, but also what it means to be an appearance attorney or use an appearance attorney.
It is important to remember that appearance attorneys may get paid by the real attorney, but for the purposes of the hearing at which they appear, the appearance attorney is acting as attorney for the client, not the real attorney and has all the responsibility and liability that they would have if the client were their client. So the first duty is damage control by stopping the questioning. Then of course any appearance attorney with any sense at all will want to get the client back to the real attorney as quickly as possible.
Having not faced the situation Nancy describes, I am sure my first reaction would have been a momentary brain freeze. Now that I have had the luxury of thinking about it while safely sitting in my office, I know I will be much better prepared should it happen to me.
We need a CLE on bk malpractice and ethics so we will have had the opportunity to see some of the pitfalls in our practice so we can reduce our chances of getting caught with our pants down.
If you have any questions or concerns please contact me.
Pat
Patrick T. Green
Attorney at Law
1010 E. Union St. Suite 206
Pasadena, CA 91106
Tel: 626-449-8433
Fax: 626-449-0565
Email: pat@fitzgreenlaw.com
The post was migrated from Yahoo.
I thought it was an automatic dismissal?
I saw a pro-se plead the fifth in front of his creditors.
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te:
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