February 2008
Judge quits after DUI bust
|

Judge Robert Somma |
Fed jurist reportedly
in drag when stopped
By O’Ryan Johnson
02-16-08 --
A 63-year-old Massachusetts federal bankruptcy judge
has resigned a week after he was arrested for
driving under the influence in New Hampshire while
reportedly wearing a woman’s dress, heels and
stockings, and carrying a purse. . .. Judge Robert
Somma, a Newbury resident, pleaded no contest to the
drunken driving charge in New Hampshire and agreed
to have his license suspended for 12 months, the
Manchester Union Leader reported. . . . “He decided
with the media coverage the way it had been, it was
best to put this behind him,” Gary Wenta, circuit
executive for Boston’s First Federal Circuit, told
the Herald. . .. Wenta said Somma worked in private
practice for years in Boston before he was appointed
to the bench by President Bush in December 2004. He
will remain on leave until he resigns on April 1,
after roughly three years on the job. . .. “He’s a
highly respected member of the bar and remains so,”
Wenta said. “He was serving a 14-year appointment.
This will leave him without a pension.”
MASSACHUSETTS
Judge OKs Gitto/Global payment
Law
firm’s insurer can pay $2.1M settlement
By
Martin Luttrell Telegram & Gazette Staff
02-08-08 --
A U.S.
Bankruptcy Court judge allowed the insurer for the law
firm of Bowditch & Dewey LLP to make a $2.1 million settlement
payment to the bankruptcy estate of former Lunenburg plastics
company Gitto/Global Corp. . . . Mark G. DeGiacomo, bankruptcy
estate trustee for Gitto/Global, filed a motion in December for
Liberty Insurance Underwriters Inc. to pay $2.1 million to the
estate for “recovery of damages relating to various possible causes
of action” stemming from Bowditch & Dewey’s representation of Gitto/Global
prior to its filing for bankruptcy in September 2004. . . . Mr.
DeGiacomo told the court yesterday that the law firm had a conflict
of interest in continuing to represent the company and its
principals individually after they allegedly began engaging in
fraudulent activities.
NEW YORK
Judge Cuts Firm's Fees Over Failure to Show Ties to Client
Joel
Stashenko, New York Law Journal
02-06-08 --
Nearly
$75,000 in legal fees have been blocked by a federal judge who
complained that a Long Island, N.Y., law firm was "purposefully vague"
in disclosing that its lead attorney in a bankruptcy case was the
son-in-law of the executive of one of several unsecured creditors it
was representing. . . . Had the court known in 2002 about the
relationship, it might have been "reluctant" to appoint Berkman,
Henoch, Peterson & Peddy of Garden City to represent a committee of
creditors in the Chapter 11 case, wrote Stephen D. Gerling, chief
judge of the Northern District Bankruptcy Court. . . . In a 2002
affidavit, Berkman Henoch attorney Ronald M. Terenzi stated that an
unnamed partner in the firm who would be primarily responsible for
representing the creditors "is related to and [sic] officer and
shareholder of one of the general unsecured creditors of the
Debtors." . . . In fact, Gerling wrote in
In Re: Matco Electronics Group Inc.,
02-bk-60835, Berkman Henoch attorney Douglas Spelfogel was the
son-in-law of Joel Girsky, the chief executive officer of Jaco
Electronics Inc., one of the creditors in the action. The judge said
it also appears that Spelfogel's wife, Wendy, later became in-house
counsel at Jaco.

January 2008
NEW YORK
Bankruptcy Allegations Move Forward Against N.Y. Law
Firm
Beth Bar, New York
Law Journal
01-30-08
-- Stressing
that the case raised "important issues concerning
the integrity of the bankruptcy process," a federal
bankruptcy judge in Manhattan has declined to
dismiss claims by a trustee against a Westchester
County, N.Y.-based law firm. . . . In In re Food
Management Group (Grubin v. Rattet),
04-22880, Judge Martin Glenn ruled that allegations
of fraudulent concealment, breach of fiduciary duty,
negligence and fraud on the court could proceed
against attorneys Robert L. Rattet and Jonathan S.
Pasternak, as well as the law firm Rattet, Pasternak
& Gordon Oliver. . . . The lawyers and the firm are
accused of failing to disclose that an "insider" of
debtor Food Management Group had violated a court
order by submitting a bid in the auction of the
company's assets. . . . The trustee also alleged
that the lawyers improperly failed to disclose that
they had represented one of the insiders before the
auction.
Bankrupt companies choose Del. to file
Court sees majority
of large cases
By Maureen Milford,
The News Journal
01-16-08 --
Delaware's Bankruptcy Court is once again the
preferred emergency room for big businesses in
serious financial health, particularly subprime home
mortgage lenders. . . . In 2007, nearly 80 percent
of major companies that sought bankruptcy protection
in the federal court chose Wilmington, according to
bankruptcy data compiled by Lynn LoPucki, a
professor at UCLA School of Law. . .. High-profile
cases filed in Delaware by public companies with
assets of more than $250 million include the two
largest subprime lenders in bankruptcy, American
Home Mortgage Investment Corp. and New Century
Financial Corp. Electronics retailer Tweeter Home
Entertainment Group Inc. also filed in Wilmington.
Countrywide Draws Ire of Judges
Questions About
Practices Arise in Bankruptcy Cases; Possible
Liabilities for BofA
By Amir Efrati & Kara
Scannell
01-14-08 --
More federal bankruptcy judges are calling into
question the business practices of Countrywide
Financial Corp., as Bank of America Corp. prepares
to buy the ailing mortgage lender. . . . According
to court documents in a bankruptcy case in Houston,
Countrywide didn't properly credit a borrower's
payments made during bankruptcy but instead applied
them to prebankruptcy debt, which isn't allowed. In
the same case, involving a debtor named William
Allen Parsley, Countrywide represented to the court
that Mr. Parsley owed fees that turned out to be
unsubstantiated and in error. These included an
improper $450 fee and a $65 unsubstantiated fee. . .
. During a hearing last month, U.S. Bankruptcy Judge
Jeff Bohm chastised Countrywide and its lawyers
after the company admitted making numerous errors in
the case. "How many times do I have to listen to
that before I conclude, 'You know, there's got to be
some kind of reckoning' when I keep hearing time
after time, 'we made a mistake, we made a mistake,
we made a mistake, we made a mistake?'" Judge Bohm
said. He is considering sanctions against the
company.
Bill gives judges power over mortgage rates
By Laura
Theis
01-04-08 --
Federal legislators are trying to
pass a bill that would give bankruptcy judges power over mortgage
terms. . . . The bill, passed by the House Judiciary Committee on
Dec. 12, would allow a bankruptcy judge to lower the interest rate
on a mortgage to a level more affordable for the borrower or extend
the duration of the mortgage for up to 30 years. . . . Advocates
believe the bankruptcy bill, dubbed the Homeowners Mortgage and
Equity Savings Act, could help the more than 500,000 borrowers
already in default to avoid foreclosure. . . . Locally, no one
disputes that any measure to help struggling homeowners is a
positive step, but some say meddling with the free market could
trigger money troubles. . . . Pearl Kamer, chief economist at the
Long Island Association, said the changing of a mortgage by a third
party is “really interfering with the contracting process.”


December 2007
Personal bankruptcy filings soar
Number of cases filed
in southeast Michigan jumped 63 percent through
October 2007.
Nathan Hurst / The
Detroit News
The number of
southeast Michiganians declaring bankruptcy is
skyrocketing. . . . Through October, the number of
Chapter 7 personal bankruptcies filed in Detroit's
federal bankruptcy court jumped 63 percent compared
with the first 10 months of last year. With two
months of 2007 filings still to be reported, there
already are 4,700 more Chapter 7 filings this year
than for all of 2006. . . . Financial experts say
the reasons for the recent ramp-up in bankruptcy
filings are well-known to many Michiganians. . . .
"It's definitely about the bad economy and housing
market," said Natasha Swoish, manager of bankruptcy
counseling and education services at GreenPath Inc.,
a Farmington Hills-based credit counseling service.
"Especially from the Detroit area, we're seeing a
lot of people coming in because of foreclosure. It's
a last-ditch effort to try and save their homes." .
. . Swoish said GreenPath's counselors work with
those in debt to set up plans with creditors, rather
than defaulting or seeking bankruptcy protection.
But lately, she said, that option of last resort has
become necessary for those out of work and swimming
in debt.
Data-Loaded Court Forms Raise Privacy Issue
Judiciary not sold on
proposal requiring debtors to use 'data tags'
By Marcia Coyle, The
National Law Journal
12-12-07 --
The Executive
Office for U.S. Trustees, which oversees the federal
bankruptcy system, wants the federal judiciary to
require debtors to file data-enabled bankruptcy
forms. But the judiciary, not yet sold on the idea,
is worried about privacy, costs and fairness. . . .
"Data tags" mark each piece of data entered into
individual fields in a data-enabled form. They
permit the computer system to automatically extract
and aggregate financial and other information from
bankruptcy filings. The tags are invisible to the
user. . . . Clifford White III, director of the
executive office, recently told a House committee
that the mandatory forms would make the U.S. Trustee
Program's implementation of the new bankruptcy
reform law "vastly more time and cost efficient" in
several key areas, such as calculating the means
test to determine eligibility for Chapter 7 relief
and identifying cases for audit under statutory case
selection standards.
CALIFORNIA
Trustee Says Pillsbury Should Return Fees
In the SonicBlue
case, the bankruptcy trustee agrees that the
conflicted-out firm should give back its fees, and
possibly more
Niraj Chokshi, The
Recorder
12-12-07 --
Pillsbury Winthrop
Shaw Pittman is one step closer to being forced to
return about $4 million to a former client. . . .
The Chapter 11 trustee for SonicBlue Inc. filed a
statement on Tuesday supporting a November motion,
filed by SonicBlue, asking Pillsbury to pay back the
fees. . . . Tuesday's statement took the motion even
further. In it, Trustee Dennis J. Connolly suggested
that the judge hold off on setting an amount so that
other issues such as interest or even potential
damages could be considered.
NEW JERSEY
Lawyer in Dwek case vanishes
By James W. Prado
Roberts, Staff Writer
12-12-07 --
Where in the world is
Anthony T. Yeh? . . . Key players in the Solomon
Dwek bankruptcy case want to find the elusive
lawyer, who a new court filing claims may have
helped Dwek defraud a major bank of millions of
dollars. . . . Yeh is an obscure but key figure
connected to the downfall of Dwek's real estate
empire last year. Yeh represented HSBC Bank on four
loans, totaling $78 million, that helped fuel Dwek's
property-buying spree in 2005. . . . The spree ended
in disaster. Dwek repaid one $20 million loan from
HSBC with a bounced check, which started the
unraveling of his empire. . . . Today, Dwek, 35, of
Ocean Township, is facing federal bank
fraud charges, bankruptcy and angry creditors who
claim that he owes them $350 million. . . . Dwek's
bankruptcy trustee as well as several other lawyers
in the sprawling case, would like to know where Yeh
is. . . . "Yeh may have been involved with the
fraud," Dwek bankruptcy trustee Charles A. Stanziale
Jr. stated in federal court papers filed Monday. . .
. PNC Bank, which accepted Dwek's bad check last year and was unwittingly
used to pay off the $20 million HSBC loan, has tried
to find Yeh.

Hospitals Need Lawyers -- Stat!
Kellie Schmitt, The
Recorder
12-10-07 --
When Culver City, Calif.'s Brotman Medical Center
filed for Chapter 11 bankruptcy in late October,
attorneys paid attention. . . . Its financial
struggles are likely to be a harbinger of hospital
woes to come as the number of uninsured patients
grows and hospital revenues decrease. . . . "All of
those factors are forming a real storm for
hospitals," said Stephen Warren, a partner in
O'Melveny & Myers' L.A. office. "And this wave is
going to involve sophisticated counsel." . . .
That's why O'Melveny is actively targeting hospital
bankruptcies, hoping to cash in on a climate of
upheaval. It hopes to compete against firms more
established in the health care area. Other firms,
such as Buchalter Nemer, are ramping up as a
hospital crisis looming in California may mean
plenty of legal work to go around. . . . "It's an
area in which we're putting a heavy degree of
emphasis," Warren said. "Some of the hospital
bankruptcies won't be big, but the aggregate will
have a significant impact." . . . It's also
worthwhile on the billing-rate side, he added:
"These are not discounted rates. They tend to be
very high margin, since these are bet-the-hospital
problems."
November 2007
Bankruptcy Trustee Suits Cause Increasing Concern
for Law Firms
Anthony Lin, New York
Law Journal