Bankruptcy Attorneys Sanctioned

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This is a continuation of the United States Trustee's report of sanctions against people who have helped (or not) people seeking bankruptcy help.

$300 Attorney Fees Disgorged

Judge Jury granted the UST's motion for disgorgement of fees in the amount of $300 from attorney Stanley M. Becker. Becker failed to represent debtors David and Karen Langehennig in defending the UST's Section 707 dismissal motion and failed to request relief as counsel of record, compelling debtors to represent themselves or face dismissal of their case. Judge Jury reasoned that Becker was obligated to take affirmative action in his representation of the debtors and failed to do so.

Discipline Panel Revokes Right to Practice

Judges Peter Carroll, Jury and Naugle referred attorney Susan Jordan to the U.S.B.C.'s Discipline Panel based upon her continued failure to pay Court-ordered fee disgorgements and fines. On December 3, 2003, the Discipline Panel revoked Jordan's right to practice before any bankruptcy judge in the District based upon her violation of legal and ethical responsibilities. The Panel stated that her refusal to follow court orders was endemic and she had made no attempt to carry out her duties as an officer of the Court. The Discipline Order provides that it will be forwarded to the United States District Court and to the State Bar of California. Jordan appealed the order and made an application for stay pending the Appeal. The stay was denied.

Attorney Ordered to Disgorge Fees and to Appear at his
§ 341(a) Meetings

Judge Erithe A. Smith of the Los Angeles Division of the Court granted the UST's motion for disgorgement of fees and ordered attorney David Marh to return $500 to a debtor and to personally appear with his clients at the § 341(a) meeting of creditors. The Order resulted from the debtor appearing at two §341(a) meetings with the same appearance attorney. No creditors were scheduled on the debtor's bankruptcy papers (except the IRS with zero dollars owing). The statement of financial affairs was incomplete and the IRS was listed on the mailing matrix with an incorrect address. At both meetings, the chapter 7 trustee asked the debtor why the bankruptcy was filed. Neither the debtor nor the appearance attorney offered an explanation. Judge Smith granted the UST's separate motion to dismiss the case under § 707(a).

Attorney Agrees to 30 Month Voluntary Suspension and Sale of Practice

Claudia L. Phillips agreed to not engage in the practice of bankruptcy law in the Central District for 30 months. Phillips, who had one of the largest consumer bankruptcy practices in the country, filing over 1,200 petitions in 2002, also agreed to sell her bankruptcy practice. Phillips had earlier been referred to the Court's Discipline Panel by Judge Ernest M. Robles of the Los Angeles Division of the Court. Judge Robles issued findings of fact and conclusions of law that Phillips and the other attorneys in her office failed to provide legal services to a debtor and failed to meet with the debtor prior to filing debtor's petition. Judge Robles found that
Phillips' non-attorney husband, Ken Phillips, provided legal advice to the debtor and concluded that Claudia Phillips aided in the unauthorized practice of law, failed to adequately supervise the work of non-attorneys, and failed to perform legal
services with competence. Other inappropriate conduct cited by Judge Robles included: failure to meet with and consult with clients; failure to abide by Court orders; improper solicitation of client, and allowing a staff member to sign the debtor's name, as well as Phillips' name, on bankruptcy documents. The Discipline Panel approved a Stipulation in Lieu of Discipline on January 16, 2004.