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socrateaser
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 34860
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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To: Socratearser, A few weeks ago I asked you about any kind

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To: Socratearser,
A few weeks ago I asked you about any kind of an attorney that would sue a trustee for wrong doing. You gave me an answer as to the type of an attorney that might take on a case on a contingency basis if I had proof of his obstruction of evidence. I do have evidence but I am not capable of finding a specific type of attorney who would not be a BK attorny, not be a mal practice attorney, not be a state court attorney........?

I have been advised that there is a Barton doctrine which gives the trustee immunity from lawsuit in most cases, except when he is operating the business of the BK estate. This trustee's attorney cancelled most of my leases without filing a motion with the BK court at the time I was forced into Chapter 7. I guess that means that the trustee was not operating a businees even though he knew I continued to rent half of my home to pay the monthly mortgage payments.

1. How does the infomation above effect anyone's chances trying to fight a trustee who seems to be above the law and protected for any wrong doing?
2. What would it take for you to find a few attorneys who understand federal civil litigation and fraud by a trustee that I could speak with?
Submitted: 2 years ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 2 years ago.
1. How does the information above effect anyone's chances trying to fight a trustee who seems to be above the law and protected for any wrong doing?

The Barton doctrine applies to separate lawsuits against the trustee --not to complaints for the removal of the trustee brought in bankruptcy court.

That said, the U.S. Bankruptcy Appellate Panel of the Ninth Circuit has identified a series of factors for the bankruptcy court to consider in exercising its discretion to decide whether or not to enjoin litigation in another jurisdiction, pursuant to the Barton doctrine:

  1. Whether the acts or transactions relate to the carrying on of the business connected with the property of the bankruptcy estate. If the proceeding is under 28 U.S.C.S. § 959(a), then no court approval is necessary.
  2. If approval from the appointing court appears necessary, do the claims pertain to actions of the trustee while administering the estate?
  3. Do the claims involve the individual acting within the scope of his authority under the statute or orders of the bankruptcy court, so that the trustee is entitled to quasi-judicial or derived judicial immunity?
  4. Are the movants or proposed plaintiffs seeking a judgment against the trustee personally?
  5. Do the claims involve the trustee's breaching his fiduciary duty either through negligent or willful misconduct?

The existence of one or more of these factors may be a basis for the bankruptcy court to retain jurisdiction over the claims. Analysis of these factors will determine whether the issues should be heard by the bankruptcy court, and which claims should be tried in another forum. See Beck v. Fort James Corp. (In re Crown Vantage, 421 F.3d 963 (9th Cir. Cal. 2005).


2. What would it take for you to find a few attorneys who understand federal civil litigation and fraud by a trustee that I could speak with?

A: It would take three million dollars, after taxes, because that's how much my license to practice law is worth to me. Seriously, I'm sorry, but I am prohibited from providing you with referral services for a fee.

Hope this helps.

NOTICE: My goal here is to educate the public about the law. Please help me in this effort by clicking Accept for my Answer to your Question.


And, if you need to contact me again, please put my user id on the title line of your question (“To Socrateaser”), and the system will send me an alert. Thanks!

Customer: replied 2 years ago.

Not sure I understand the response. it over my head.

1.This is not about removal of the trustee. It is much to late now (at the end of this case) to file a motion to remove the trustee. It is about a law suit against the trustee who is making hundreds of thousands of dollars for himself.

 

2.How does the Barton doctrine apply to a law suit against a trustee? Do you mean that the BK court is involved in the law suit even if I file it outside of the BK court?Or do I just have to have permission from the BK court to file the law suit in the state court?

 

3."If the proceeding is under 28 USCS 959(a)...no court approval is necessary" What does this mean with regards XXXXX XXXXX law suit against a trustee who did not take over running my rental business but instead threw out some hundreds of thousands of dollars in rentals creating debt for my estate and an excuse to sell the property in order to make a commission on a sale.

 

4. Where do I go to see the case law you refer to Beck v Fort James Corp?

 

I will be off the computer for over an hour but will be back.

 

 

 

Expert:  socrateaser replied 2 years ago.

1.This is not about removal of the trustee. It is much to late now (at the end of this case) to file a motion to remove the trustee. It is about a law suit against the trustee who is making hundreds of thousands of dollars for himself.

 

A: I respectfully XXXXX XXXXX goal is to have the trustee's actions sanctioned or reversed. This could be accomplished by the bankruptcy court judge as part of a removal action, or by a separate law suit -- however, to file a separate lawsuit, generally requires you to file a motion for leave from the bankruptcy court to file such an action (this is the core holding of the Barton doctrine as it applies to bankruptcy court trustees).

2.How does the Barton doctrine apply to a law suit against a trustee? Do you mean that the BK court is involved in the law suit even if I file it outside of the BK court?Or do I just have to have permission from the BK court to file the law suit in the state court?

 

A: You need to get permission from the bankruptcy court to separately sue the bankruptcy trustee. The court will use the Barton factors that I previously described to determine whether or not the court will grant your request. If the court does not grant leave to separately sue, but it nevertheless finds that the trustee has acted improperly, then the court could sanction the trustee in an number of different ways (including referring the matter to the U.S. Trustee Program for a criminal investigation). This would not, however, necessarily get you any money or a ruling that would reverse the trustee's liquidation actions. However, if you were to be denied leave to separately sue, then you, but the court indicates that there may be improprieties of the trustee, then you could file a motion to remove the trustee and to set aside the bankruptcy court's orders concerning the liquidation/sale of your home, and potentially be able to negotiate a more favorable outcome from a new trustee. There are a lot of "what-ifs" in this scenario -- it's not the sort of thing where there is an easy direct route to a speedy conclusion. If it were, then you would have already figured it out for yourself.

3."If the proceeding is under 28 USCS 959(a)...no court approval is necessary" What does this mean with regards XXXXX XXXXX law suit against a trustee who did not take over running my rental business but instead threw out some hundreds of thousands of dollars in rentals creating debt for my estate and an excuse to sell the property in order to make a commission on a sale.

 

A: Where an act by the trustee is done in his/her official capacity, the bankruptcy court controls whether or not a suit against the trustee may be had. 28 U.S.C. 959 is intended to redress "torts" (wrongful acts of negligence, assault, battery, civil conversion/theft, false imprisonment, interference with chattel, trespass, negligence, fraud, products liability, defamation, malicious prosecution, invasion of privacy: misappropriation of likeness/identity, false light attribution, public disclosure of private facts, intrusion into seclusion, etc.). To sue based upon the liquidation of your property -- without leave of the bankruptcy court, you would have to show that the trustee has committed some wrongful act beyond merely the liquidation itself. Intentionally mis-managing the bankruptcy estate property in order to advance a personal goal outside of the trustee's duties is a breach of fiduciary, and that is potentially beyond the reach of the bankruptcy court.

 

However, if you sue without requesting leave, then the trustee can ask the bankruptcy court to enforce the Barton doctrine against you. This leaves you in a catch-22. There is no way to avoid asking the court for leave to sue the trustee, no matter what the reason is, because the trustee can force you back into bankruptcy court to decide whether the trustee can be separately sued.

4. Where do I go to see the case law you refer to Beck v Fort James Corp?

 

See this link.

 

Hope this helps.

 

NOTICE: My goal here is to educate the public about the law. Please help me in this effort by clicking Accept for my Answer to your Question.


And, if you need to contact me again, please put my user id on the title line of your question (“To Socrateaser”), and the system will send me an alert. Thanks!



 

socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 34860
Experience: Attorney and Real Estate Broker -- Retired (mostly)
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Attorney and Real Estate Broker -- Retired (mostly)