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JP, Attorney
Category: Bankruptcy Law
Satisfied Customers: 109
Experience:  Represented creditors and individuals in bankruptcy and consumer matters.
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Hi, I filed bankruptcy last January. My lawyer said I would

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Hi, I filed bankruptcy last January. My lawyer said I would not lose my business if we did chapter 13. We have 2 partners, they wanted to sell the business, we did not. We were forced to sign away our membership because in our agreement it stated that anyone filing bankruptcy, automatically lost the right to vote. My attorney never asked to see the agreement, he filed it. Now we have lost our business. Do I have a claim against my bankruptcy lawyer? I live in SLC UT. thank you for any help you could give me. Jeni Nygren
Submitted: 8 years ago.
Category: Bankruptcy Law
Expert:  JP replied 8 years ago.

First let me say that to look into whether you have a claim against your bankruptcy attorney, you should contact a malpractice attorney in your area to have your sitaution completely evaluated.


It seems as though you transferred your interest in this company (signing away your interest in a partnership) without approval from the bankruptcy court. Since you say that your attorney did not see the agreement, I will assume that your bankruptcy schedules did not list the company and furthermore, did not exempt your interest in the company. Your interest in that company was part of your bankruptcy estate and otherwise protected by the automatic stay afforded by the bankruptcy code. If your interest in the company was transferred without prior approval from the Court by either the non-bankrupt partners requesting Relief from the Automatic Stay to sell the company, or without a Motion to Sell your interests in the company, it could be argued that the transfer of your interests in the partnership was a violation of the automatic stay at the time and you could attempt to have the transfer voided and have each party placed back into the position they held prior to the sell of the property.


Now it is going to be more difficult for you to void the transfer because your bankruptcy case is now dismissed and will need to be reopended in order to litigate and resolve that issue in the bankruptcy court. You should have a bankruptcy attorney in your area evaluate the situation to determine whether reopening the case is a viable option for you.


Also, you have to consider that if the case is reopened and the ultimate conclusion of the litigation is that the transfer of the business will not be voided, after the Court hears all sides of the situation, you may be subject to repaying any profit to made from the sale of the company to the trustee in the case. So, if you want to pursue this matter, you will have to proceed with caution and make sure you are dealing with a bankruptcy attorney in your area who you can fully consult with prior to opening that can of worms.


The dismissal of your bankruptcy case does not mean that your partnership is in tact. you actually have transferred your intersts in this partnership. Your interest in the company is gone. The only way to get it back, will be through litigation or agreement. I assume that since you are posting this question that you do not believe that the current partners will allow you back into the company/partnership voluntarily, so you will have to seek counsel and litigate whether you can reclaim your interest in the partnership. It appears that litigating this matter in the bankruptcy court, may be your best chance at regaining your interest in the partnership that you sold during the course of bankruptcy case.


I hope you found this information helpful.


Best Regards,

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