Sanctions Affirmed for Frivolous Bankruptcy
A loan-servicing company and two law firms cannot appeal nearly $1 million in sanctions handed down for filing a "frivolous" bankruptcy action in Nevada, the 9th Circuit ruled Tuesday.
Chief U.S District Judge Robert Jones in Nevada ordered the sanctions in connection to a dispute over loan-servicing agreements with Asset Resolution, a company owned by Silar Advisors.
"In support of this holding, the District Court found that the Silar parties 'never had any intention or ability to reorganize' Asset Resolution, which was merely a 'shell entity' without any assets to reorganize," according to the 9th Circuit. "Further, the Nevada District Court found that debtors' bankruptcy filing in the Southern District of New York was solely an attempt to evade the district court's jurisdiction and, specifically, the allegedly adverse impact of its orders over the summer of 2009."
The parties "never had any intention or ability to reorganize" Asset Resolution, the summary continues.
Jones ordered the sanctions of $279,615 against several individuals, Silar Advisors and its attorneys with Klestadt & Winters LLP and Bryan Cave LLP. Each firm also had to pay a $300,000 retainer. [ Editor's Note: Bryan Cave acts as outside counsel for Courthouse News Service.]
[PJ: Also for UnXis in 2009, which bought SCO's business assets in its bankruptcy and it also represented Gulf Capital Partners. It was also a defendant in the eventually tossed Pelican litigation. But isn't it interesting that one can be sanctioned for pretending to reorganize when there are no assets to reorganize?]- Tim Hull, Courthouse News Service
See original: Sanctions Affirmed for Frivolous Bankruptcy