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Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
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Experience:  B.A.; M.B.A.; J.D.
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I was appointed Receiver of the company I work for 7 weeks

Customer Question

I was appointed Receiver of the company I work for 7 weeks ago while the parties who own the LLC are in litigation. On e of the parties has 2 UCC filings against the company's receivables because of loans they have made or purchased with perfected security interests. As receiver I negotiated to pay the smaller UCC and get a forbearance agreement on the larger UCC, which is legally in second position against the firms assets. This really pissed the other owner off and they are taking it out on me. They used some relationships in the court system to change judges this week, which is questionable. The new judge does not understand receivership and would not allow me to report to him directly, as is the correct practice. He then passed an emergency order AFTER the wore to the creditor cleared which ordered me to return the wire and confirm the return with the court within 24 hours. It is impossible for me to return a wire that was sent to so
someone else. I did ask the creditors counsel to have them return the wire and they denied the request and filed a supersedeas appeal to overturn the order. Counsel for the business owner who was not the creditor has now filed a motion for a show cause hearing to hold me in contempt for not returning the wire. My question: Can a judge order me to do something that is Impossible for me to do and can I be held in contempt for not completing the impossible task. With the switching of judges, the impossible order, and the contempt it feels like a kangaroo court. I am supposed to be an officer of the court I was appointed by and I am being railroaded into a negative situation. The lawyer who filed the contempt was sanctioned by a federal judge this June for vexatious litigation in bad faith and abuse of the system. I also want to explore whether I have a right to pursue a malicious prosecution case once this BS contempt is thrown out. Thanks! - yes this is real!
Submitted: 2 years ago.
Category: Bankruptcy Law
Expert:  Phillips Esq. replied 2 years ago.
Thank you for giving me the opportunity to assist you. Kindly use CONTINUE or REPLY button to ask for clarification or follow-up questions.

Question: I was appointed Receiver of the company I work for 7 weeks ago while the parties who own the LLC are in litigation. On e of the parties has 2 UCC filings against the company's receivables because of loans they have made or purchased with perfected security interests. As receiver I negotiated to pay the smaller UCC and get a forbearance agreement on the larger UCC, which is legally in second position against the firms assets. This really pissed the other owner off and they are taking it out on me. They used some relationships in the court system to change judges this week, which is questionable. The new judge does not understand receivership and would not allow me to report to him directly, as is the correct practice. He then passed an emergency order AFTER the wore to the creditor cleared which ordered me to return the wire and confirm the return with the court within 24 hours. It is impossible for me to return a wire that was sent to so
someone else. I did ask the creditors counsel to have them return the wire and they denied the request and filed a supersedeas appeal to overturn the order. Counsel for the business owner who was not the creditor has now filed a motion for a show cause hearing to hold me in contempt for not returning the wire. My question: Can a judge order me to do something that is Impossible for me to do and can I be held in contempt for not completing the impossible task. With the switching of judges, the impossible order, and the contempt it feels like a kangaroo court. I am supposed to be an officer of the court I was appointed by and I am being railroaded into a negative situation. The lawyer who filed the contempt was sanctioned by a federal judge this June for vexatious litigation in bad faith and abuse of the system. I also want to explore whether I have a right to pursue a malicious prosecution case once this BS contempt is thrown out. Thanks! - yes this is real!

Response: Well, this is a real mess. Having worked for major banks in my other life, I do not see how you can reverse a wire in 24 hours. The Judge needs to be educated in intricacies of bank operations. You cannot be held in Contempt of Court for something you do not have control over. The bank has its own procedures to safeguard its funds and cannot put that in jeopardy by rushing to reverse a wire, an action that may not be honored by the receiving bank. Nevertheless, if the Judge finds you in Contempt, you need to appeal from the decision because the Judge's finding would be in error. You need to be prepared to get Affidavit from the bank's officer explaining to the Court how bank wires work and how it is not possible to accomplish what the Judge is ordering in 24 hours.

Yes, you may consider filing malicious prosecution case against the attorney for bringing this contempt action. Also and more importantly, you should also file a Motion for this Judge to recuse him because he is biased and because the way the other Judge was removed is improper.

Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
Satisfied Customers: 13082
Experience: B.A.; M.B.A.; J.D.
Phillips Esq. and 4 other Bankruptcy Law Specialists are ready to help you
Customer: replied 2 years ago.


Thanks for you reply! I have a follow up. The judge is going forward with my contempt hearing despite the obvious illegality of ordering me to send a wire back to myself from someone else's account. The plaintiff in my case filed a voluntary dismissal of the current litigation in order 1. prevent the judge from having any more hearings/motions/orders etc in the matter as there is no jurisdiction once a case has been dismissed and 2. in order to proceed with resolution of all claims in the appropriate court. The appropriate court is now federal court because a RICO suit has been filed by this same plaintiff against the defendant in this proceeding and about 8 other defendants.


 


Question:


1. The staff attorney for the new state level judge issued summons for my contempt hearing after the dismissal was filed. she then invited any examples of case law either supporting or challenging the judge's authority to hold a contempt hearing in this case pots-dismissal. She provided to counsel for the defendant, in an illegal ex-parte communication, OCGA statute 9-6-11, which states that only a court order can dismiss this case because a Receiver has been appointed. the judge's staff attorney is literally helping the defendants counsel get me convicted for contempt because I as the recevier have been reporting factual information about the finances of this company and that information is proving detrimental to her client's case. They are intimidating me into resigning this position (and it is working). When I was appointed receiver I asked for a private bank account that neither of the business owners had access to. The new judge, who for some reason beleives what he was told ex-parte by counsel for the defendant, has said that he is "putting a hold on everything until some new guidelines are established".


 


Does this mean the first order establishing the receivership is vacated? If so, I can resign and the case can be dismissed OCGA 9-11-66 notwithstanding.

Expert:  Phillips Esq. replied 2 years ago.

Hello:



I am sorry to hear that the Court still wants to hold you in contempt. Unfortunately, your follow-up question is too complex to be dealt with in this forum. You would need to consult with a local lawyer who would have the opportunity to review all the documents in the case and advise you accordingly. However, you should not let yourself be intimidated into resigning. You need to do the work that you have been appointed to do. Also, if the Staff Attorney is giving advice to one party in the case, then you need to consider filing complaint against the Attorney with State Bar of Georgia:





http://www.gabar.org/forthepublic/fileacomplaint.cfm





I am sorry that I am not able to further assist you.




All the best,

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