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Welcome to Bankruptcy Misconduct.Com |
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The Voices Grow In Number And Strength
"No country -- certainly not the United States -- is free of corruption. In the real world of limited
resources, we know that we can only detect, investigate and prosecute a
small percentage of those officials who are corrupt." -- U.S. Attorney General John D. Ashcroft
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I remain convinced that there is no more important area in the fight against corruption than the challenge for us within the law enforcement and justice sectors to keep our own houses clean." -- U.S. Attorney General John D. Ashcroft
"It appears that the
watchdog needs watchdogging". - Exact words of a Federal Judge describing the U.S. Trustees at the DOJ, whose role is to act as the watchdog against crime and corruption.
"A Pack Of Dogs"- Another Federal Judge describing the U.S. Trustees.
"Competition for Big Cases Is Corrupting the Bankruptcy Courts" UCLA Professor and renowned expert on bankruptcy in the U.S.A.
Bankruptcy Misconduct.Com was created out of concern about the current state of federal bankruptcy practice. This website is part of an ongoing effort to illuminate in a clear and direct way:
operations and activities of various governmental agencies as they act, or fail to act, to police, enforce, and fulfill important Congressional mandates related to the integrity of the bankruptcy process as well as applicable rules of professional and judicial conduct.
inherent and systemic problems with the current practices of professionals involved in the bankruptcy process due to the self regulation and self policing mechanisms which purport to regulate, albiet in secret, the actions of lawyers.
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BankruptcyMisconduct.com has been directing the public's attention to peculiar circumstances in a number of bankruptcy cases. These cases are exemplary in their demonstration of the need for a closer scrutiny by the media, the business community, and of course the Justice Department. These cases include:
- The " Asbestos Ring " involves a number of U.S. federal bankruptcy court reorganization cases. These cases have in common: the State of Delaware, the use of asbestos litigation by injury lawfirms against large companies, astounding mega fees paid by the debtors to bankruptcy professionals, a locus of several bankruptcy industry firms, and most significantly the emerging evidence of a pattern of fraud by one or more bankruptcy professionals.
CH II American Inn Inc. USBC (Oklahoma?) Bk-85-2221-A. Numerous possible conflict of interest, ACPOC Syndrome. Will a nation, whose freedom and prosperity would surely end but for the dedication and sacrifice of its armed forces, survive if the honor of its warriors and the Constitution for which they risked their lives to defend, are defamed and disrespected in its Courts by profiteering brethren of the bar?
John Deep USBC Northern Distric of New York, Nos. 02-11552, 02-11745, and 02-11755.
Mr. Deep is well known for his creation of Aimster, and was apparrantly represented by the renowned attorney
David Boies, who in turn is reported to have earned fees representing clients including Microsoft, the presidential election dispute on behalf of Al Gore, and entities associated with the RIAA.
eToys Inc. et al. USBC Delaware, Nos. 01-706 etc.
Worldcom, Inc., et al. (included MCI) USBC Southern District of New York No. 02-13533 (AJG)
Baron's Stores, Inc. USBC Southern District of Florida No. 97-25645 BKC-PGH
The Leslie Fay Companies, et al. USBC Southern District of New York No. 93-B-41724(TLB)
Stone & Webster, et al. USBC District of Delaware No. 00-2142 (PJW)
Aureal, Inc., USBC Northern District of California No. 00-42104 (T)
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Bankruptcy is Big Business
The Bankruptcy Investment specialty has become “big business” and has attracted a wide variety of players including many hedge funds. For example, in the largest U.S. bankruptcy case of MCI / Worlcom there have been at least 50 entities involved in claims transfers encompassing hundreds of millions of dollars. As the scope of the claims trading activity has increased, so too has the potential for corrupt practices and actions involving the professionals retained in those related proceedings. Despite the rampant claims trading involved in large bankruptcy cases, there are essentially no precautions in place to avoid corrupt practices and actions involving bankruptcy professionals, other than the faith by the Department Of Justice and the Judiciary in the honesty of the attorneys employed in these million and billion dollar Mega Bankruptcy cases, that these lawyers' actions and sworn declarations indcluding mandatory disclosure of conflicts of interest will reflect their supreme loyalty to the bankruptcy estate, and not to conflicted clients.
We
hope that the information released by this website will significantly
contribute to public understanding. Perhaps non lawyer oversight of these various
governmental and quasi-governmental agencies and professionals is due. Particularly troubling is these agency’s and professionals activities, policies, and regulations
relating to corruption in bankruptcy practice and attorney conduct in general.
Bankruptcy Misconduct.Com was originally created by Next Factors, Inc. (abbreviated "Next") because of concern about the current state of federal bankruptcy practice. Next was a small, private firm engaged in the business of purchasing and accepting assignments of claims against debtors in large bankruptcy proceedings, a practice commonly referred to as claims trading, distressed investing, or vulture investing.
In stark contrast with certain of its competitors, Next was not affiliated with current or formerly practicing bankruptcy lawyers or professionals, hedge funds, brokerage firms, corporate finance professionals, or relatives of any of the above. Furthermore, Next did not give money to any bankruptcy professional, either directly or through any affiliate, at the same time when such professional had a duty to be adverse to Next in the context of any bankruptcy proceedings. We can not understate how significant, if not unique, is this absence of a conflict of interest by a vulture investor.
Bankruptcy Misconduct intends to participate in the sponsorship of one or more scholarship awards where students can submit written material regarding proposed topics. We contemplate that winning students entries will receive award certificates may also receive a cash awards which can be used in furtherance of their the study of law, economics, or government.
An
additional purpose of this site is to enable all parties to assemble
and converse about bankruptcy misconduct in general as well as on a
number of specific issues. Remember to view our Bankruptcy Misconduct Forum where you can participate in ongoing discussions and suggest your own new topic for discussion and analysis.
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Corruption complaint to Thomas P. O'Brien prior to his disbanding of the Public Corruption Unit