Attorneys need to watch their step in U.S. bankruptcy court

A word of warning to those personal injury attorneys who are advertising their newfound skills as bankruptcy attorneys in their TV ads. If they do a sloppy job in U.S. Bankruptcy Court, they can expect public sanctions.

Las Vegas attorney Randolph Goldberg and Los Angeles attorney Shalom Rubanowitz are the latest to receive public reprimands for their bad lawyering in front of U.S. Bankruptcy Judge Bruce Markell.

Goldberg advertises heavily on television and for the past 12 years had done a volume practice with between 15,000 and 20,000 cases. In his ads, he says he can solve almost any consumer’s financial problems. “That’s what I do.”

However, when he was representing Raymond Sanford, he filed two bankruptcy cases before two different judges for the same debtor. The result was to overcharge Sanford and cheat his creditors and Sanford was never discharged of his debts, even after two bankruptcy filings.

Markell decided Goldberg’s conduct was made in bad faith and Goldberg “failed to meet the standards of a competent attorney” practicing in bankruptcy court.

Goldberg was publicly reprimanded, ordered to repay all Sanford’s fees and for the next two years Goldberg will have to provide each of his bankruptcy clients a copy of Markell’s March 17 opinion once his fees pass the  $5,000 mark, so clients will be sure to know about his “past indiscretions.”Goldberg will also have to provide Markell’s opinion whenever he applies for a bankruptcy fee for the next two years.

Markell wrote in his opinion: “The clueless are not as culpable as the conniving even if the actions are the same.”

Goldberg was definitely portrayed as conniving.

Rubanowitz fell into the clueless category.

Markell was gentler with Rubanowitz’s finding his bad lawyering was not deliberate but didn’t meet proper standards. Rubanowitz represented a creditor, Tuesday Investments Inc., and Markell said the attorney’s failure to comply with procedural rules was a breach of duty, so he too was given a public reprimand and ordered to provide Markell’s opinion to any other person seeking sanctions against him.

My point: Bankruptcy law isn’t like a slip and fall case or a car crash. Federal court is far more formal than state court.

And those personal injury attorneys pitching their ability to handle bankruptcies, such as Glen Lerner and Ed Bernstein, better make sure they can deliver or there will be consequences.