Central District Consumer Bankruptcy Attorney's Association

I agree that the debtor probably needs her own individual counsel in connection with the OSC. Since, as you say, the OSC pertains to alleged postpetition conduct, there is likely no stay issue. Moreover, although you did not specify the nature of the sanctions requested, if they seek money against the debtor personally (which they almost always do), as opposed to strictly case-related sanctions (such as evidentiary sanctions or dismissal), the debtor is on her own and the Ch 7 trustee will have no obligation to defend her (although the trustee might appear through counsel to address any case-related sanctions). At a minimum, the Ch 7 trustee needs to be informed at once about the OSC and placed on notice that he/she must act promptly to preserve this claim, or abandon it. If the trustee fails to act promptly and a meritorious claim is lost, a creditor (or perhaps the debtor, assuming conversion) could have a remedy against the trustee.
Gary R. Wallace
Law Office of Gary R. Wallace
4551 Glencoe Avenue, Suite 300
Marina del Rey, CA 90292
Email: garyrwallace@ymail.com
Office: (310) 775-8719
________________________________
To: "cdcbaa@yahoogroups.com"
Sent: Thursday, June 6, 2013 4:53 PM
Subject: [cdcbaa] Re: Question re Debtor hiring counsel for her state court actions while she's in Chapter 7 (contested pending motion to convert to CH 13)
Nick, the defense case is stayed but the OSC is in a case where she is plaintiff.
On Thursday, June 6, 2013, Nicholas Gebelt wrote:
>
>Dear Holly,
>
>Until the case is converted the Chapter 7 Trustee owns the bankruptcy estate, and therefore has the exclusive right to prosecute the three state court actions in which your client is the plaintiff.
>
>As for the Chapter 7 Trustees opposition to your conversion motion, you will undoubtedly face an argument based on Marrama v. Citizens Bank, 127 S. Ct. 1105 (2007). Therefore, you should make absolutely sure that your clients bankruptcy papers were without error, and without anything misleading in them. In addition, you should be prepared to explain the alleged bad postpetition behavior as that could provide ammunition for the Chapter 7 Trustee to use in opposing your conversion motion.>
>As for the action in which she is the defendant, why isnt that case stayed pursuant to 362(a)? Did the plaintiff get a motion for relief from stay granted?
>
>Finally, with respect to the case in which your client is the defendant, its a bit dangerous to attend the OSC hearing because the state court judge might decide that you must defend your client right there is to instruct your client to attend the state court hearing and ask for a continuance to a date far enough into the future that the conversion is completed, and give as the reason that she is in the process of retaining competent counsel to represent her.
>
>Good luck,
>
>Nick
>
>Nicholas Gebelt, Ph.D., J.D.
>Board Certified Bankruptcy Specialist
>
>
>
>Law Offices of Nicholas Gebelt
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>Email: ngebelt@goodbye2debt.com; ngebelt@gebeltlaw.com
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>From:cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] On Behalf Of Holly Roark
>Sent: Thursday, June 06, 2013 3:12 PM
>To: cdcbaa
>Subject: [cdcbaa] Question re Debtor hiring counsel for her state court actions while she's in Chapter 7 (contested pending motion to convert to CH 13)
>
>
>Isubbed into a problem CH 7 case and am trying to convert it to a Chapter 13.
>
>My motion to convert to Chapter 13 is pending and will be opposedby the Chapter 7 Trustee who has a pending motion to hire counsel (I opposed his motion.)
>
>Debtor has 4 state court actions 3 where she is plaintiff, 1 where she is defendant. Her former counsel subbed out and put her in pro per in ALL the actions. In a state court action where she is plaintiffthereis anOSCre sanctions for her allegedbad conductpostpetition. These cases are assets of the bankruptcy>
>I found competent counsel to sub into all these cases for her. Can the Debtorhire this counsel? Or can only the CH 7 Trustee hire counsel until (or unless) we convert to Chapter 13?
>
>The pending problem right now is that the OSC hearing in state court is prior to my Conversion motion. I don't want Debtor to go there in pro per, but I can't be heard as her "counsel" unless I formally sub in,and I can't do that because it's an elder abuse case - not my area of law. ut I don't think I can represent her on the substance of the sanction motion.
>Suggestions on how to handle??
>
>Holly Roark
>Certified Bankruptcy Specialist*
>holly@roarklawoffices.com**primary email address**
>www.roarklawoffices.com
>Central District of California
>Consumer Bankruptcy Attorney
>1875 Century Park East, Suite 600
>Los Angeles, CA 90067
>T (310) 553-2600
>F (310) 553-2601
>*By State Bar of California Board of Legal Specialization
>
>**For a quicker response, email me at holly@roarklawoffices.com.
>I only use gmail for my listservs, and am likely to miss private emails
>directed to my gmail account.**
>
>
>
>
>--
>Holly Roark
>Certified Bankruptcy Specialist*
>holly@roarklawoffices.com**primary email address**
>www.roarklawoffices.com
>Central District of California
>Consumer Bankruptcy Attorney
>1875 Century Park East, Suite 600
>Los Angeles, CA 90067
>T (310) 553-2600
>F (310) 553-2601
>*By State Bar of California Board of Legal Specialization
>
>**For a quicker response, email me at holly@roarklawoffices.com.
Holly Roark
Certified Bankruptcy Specialist*
holly@roarklawoffices.com**primary email address**
www.roarklawoffices.com
Central District of California
Consumer Bankruptcy Attorney
1875 Century Park East, Suite 600
Los Angeles, CA 90067
T (310) 553-2600
F (310) 553-2601
*By State Bar of California Board of Legal
Specialization
**For a quicker response, email me at holly@roarklawoffices.com.
I only use gmail for my listservs, and am likely to miss private emails
directed to my gmail account.**

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