What happens if I do not provide my bankruptcy attorney with the documents he requested?

16 May 2013

Your case will likely be dismissed.  As an aside, if your attorney filed the case for you without requiring that you provide the basic required documents then you probably hired the wrong attorney.

Section 521 of the bankruptcy code addresses “debtor’s duties,” which includes the requirement to provide documents.  All jurisdictions known to the author have issued a standing order that requires the documents required by 11 U.S.C. § 521 to be provided directly to the trustee assigned to your case instead of to the court.  Under § 521, there are documents that are required in every case, such as your last filed federal tax return and your pay stubs (or other evidence of payment) from any employer that covers the 60 days prior to your filing date.  These documents are required to be provided to the trustee 7 days prior to your meeting of creditors, usually referred to as the “341 meeting.”  As stated, if you do not provide the documents, the case will likely be dismissed.

For example, in In re Soto, a creditor of the debtors moved to dismiss the case based on the debtors’ failure to provide documents required under § 521 (tax returns and pay stubs) and the judge allowed the motion and dismissed the case.  The bankruptcy appellate panel affirmed the bankruptcy judge’s decision to dismiss the case on a summary basis due to the debtors’ failure to provide their documents.  Soto v. Doral Bank (In re Soto). B.A.P. Docket No. 12-075 (decided May 8, 2013).  The court noted that the standing order at issue required “automatic dismissal” and observed that unless the judge decided the documents were unnecessary in his discretion, dismissal would occur if the facts were established that the documents were not provided.  Id.

 

Before you get excited that there is some hope that you do not need to provide the documents and you will get bailed out by the judge, understand that the reason behind allowing the judge discretion to decide whether the documents were unnecessary is really to make sure debtors are not allowed to sabotage their bankruptcy case when they decide they do not want the case to continue.  So, this possibility is geared to be used against you, not for you.

Another consideration is that the documents described above are not the full extent to what a debtor may need to provide.  The trustee has very broad powers to require documents from a debtor.  Upon specific request, the trustee can ask for other documents that must be provided in addition to those documents that are required in every case.  Keep in mind that there are still many other documents that your attorney should ask for, not just to provide to the trustee to comply with § 521, but to verify your assets and help with making the financial calculations necessary.

The moral of the story is to be prepared and to understand that you will be required to provide many documents if you plan to file bankruptcy. 

 

In the event that you seek to be prepared to take a legal action, including bankruptcy, feel free to give this office a call.   

Someone defamed my business and/or property, is there anything I can do about it?

1 May 2013

There certainly is.  Initially one may want to consider making a traditional defamation claim (specifically slander if the falsehood was published orally, libel if published in writing).  The facts will need to be assessed to see if traditional defamation is applicable.  But there is a claim recognized under Massachusetts law known as commercial disparagement that one may also want to consider bringing.  There has been a recent change in the law that makes this type of claim more attractive that this post will now briefly address.

The Massachusetts Supreme Judicial Court recently decided Hipsaver, Inc. v. Kiel and addressed the commercial disparagement claim in detail.  Hipsaver, Inc. v. Kiel, 464 Mass. 517 (2013).  The court stated that defamation and commercial disparagement are similar but that defamation is geared to address damage to reputation where commercial disparagement is geared to address damage to economic interests.  It provided the elements of commercial disparagement, to wit:

1)    The publication of a false statement to a third party;

2)    The statement must be of and concerning the plaintiff;

3)    The defendant had knowledge that the statement was false or made it with reckless disregard of its truth or falsity;

4)    Financial harm to the plaintiff’s interests was intended or foreseeable; and

5)    The publication resulted in specific damages in the form of financial harm.

This author adds that the difficulty in these types of claims has been proving that financial harm occurred, the fifth and last element listed above.  Digging deeper into the legal substance required to satisfy this element, in general it must be shown that there was a “specific loss of sales to identifiable customers.”  Hipsaver, Inc. v. Kiel, 464 Mass. at 536. This means, for example, showing that the predominant reason company X did not buy more product or the potential buyer did not buy the property is because the third party heard of the falsehood.  Potential plaintiffs generally do not offer anything more than conjecture and thus do to not support this element adequately.  And even when the factual support may exist, one reason the facts will not be presented is that a plaintiff may not want to get its customers involved.  Another reason is that the plaintiff’s customers may not want to be involved and/or are reluctant to say they stopped doing business with the plaintiff because of what the defendant said.  Thus, in many instances, these claims are not brought for these reasons.

However, the Hipsaver opinion made the fifth element easier to satisfy.  The SJC has recognized a new exemption to the requirement of identifying specific customers.  Hipsaver, Inc. v. Kiel, 464 Mass. at 539.  It is when the false statement has been widely disseminated and it is impossible to identify specific customers that are affected by the falsehood.  The plaintiff will still have to prove that the falsehood was the cause of the business harm, which still makes this one of the toughest elements to satisfy.  Just the same, this new exception and plaintiff friendly change may make the difference between a successful and unsuccessful claim in some future cases.

In the event that you believe you have a slander/libel/defamation or commercial disparagement claim, feel free to give this office a call.