The debtors filed for bankruptcy on July 22, 1999. The debtors received their discharge of debts on November 4, 1999. Their case was closed on November 9, 1999. Mark E. Levine of the law offices of Peter Francis Geraci prepared the bankruptcy petition and represented the debtors.

On February 5, 2001, bankruptcy trustee James Stevens motioned to reopen the case. After the case was reopened, Bernard J. Natale, who is also a chapter 7 bankruptcy trustee, was substituted for Mark E. Levine. (The case "Conspiratorial Behavior" is a case where Bernard Natale represented the non-debtor Defendant against a charge he introduced while trustee in the same case.)

Bankruptcy trustee James Stevens does not cite any law giving him authority to reopen a case that was closed for 15 months. The trustee alleges that the debtors failed to list property on their Schedules and that the property was held by another party. He gives the value of the property, consisting of jewelry and coins as approximately $150,000 to $200,000.

"any interest in property that would have been property of the estate if such interest had been an interest of the debtor on the date of filing of the petition, and that the debtor acquires or becomes entitled to acquire within 180 days after such date" ....

Here's the problem ... we have to put pieces of the puzzle together based on available information. We only have what the trustee provides in documents of the public case record. It appears from other motions filed in the case that the debtors may have given the property to be held as collateral for a loan. The person making the loan may have died. The bankruptcy trustee's motion to reopen makes it appear that this was property the debtors had when filing for bankruptcy. He did not state in his motion to reopen if the debtors had access to the property. From motions filed later in the case, it is possible to believe that the debtors did not have access to the property as it was held in a safety deposit box that was property of the family of the deceased that gave the debtors the loan.

The Handbook for Chapter 7 Trustees advises trustees that if assets are subsequently discovered, the trustee should reopen the case and seek to deny or revoke the debtor's discharge if the debtor failed to disclose assets. Evidently, the debtors did not fail to disclose the assets as the trustee alleges, for if they had he SHOULD have reopened the case to revoke their discharge --- except, there's a problem with that ....

According to federal bankruptcy law, the trustee could have motioned to revoke the discharge up to one year after the closing of the case. That means he had until November 29, 2000. Since he didn't motion to reopen the case until February 2001, he missed the deadline. Bankruptcy trustees Daniel Donahue and James Stevens have demonstrated disregarding federal bankruptcy law that establishes time limitation to revoke the discharge of debts. Based on correspondence reported to us from Lawrence Friedman, Director of the Executive Office for U.S. Trustees in Washington, D.C., he sees no problem with Chapter 7 trustees abusing the law. Rather, he leaves it up to bankruptcy judges to decide if the law applies or not. That presents a problem .... bankruptcy law is civil law. If the other party doesn't oppose the unlawful requests of the trustees, the trustees prevail by default. Lawrence Friedman's logic, therefore, denies accountability to supervise trustees to administer cases pursuant to federal bankruptcy law. His failure to supervise gives trustees authority to extort under color and claim of official right either through default judgments, or by crony attorneys that do not defend their clients, (as we see demonstrated in this case).

Although James Stevens motioned to reopen the case, he did not request to have a trustee appointed, and for himself to be appointed. That might be because he already knew that another bankruptcy trustee (Bernard Natale) as a private attorney was representing the debtors and would keep this violation of rules secret.

In November 2001, the trustee states in a motion that an attorney named Thomas Laughlin contacted him. That would be 2 years since the case was closed. Thomas Laughlin has been hired by Chapter 7 trustees Joseph Olsen and Bernard Natale to help them out in bankruptcy cases. Therefore, we know there is a connection between Bernard Natale, (who represents the debtors in the case of subject), and Thomas Laughlin. Thomas Laughlin represented parties in the deceased Estate. This is clearly an "inside" job of cronyism that is totally contrary to the purpose of the United States Trustee Program (UST program). The UST program was suppose to eliminate even the appearance of cronyism and insider dealings by establishing an agency to supervise bankruptcy trustees.

As evidenced by the logic of Lawrence Friedman and other officials with the Executive Office for United States Trustees, the UST program denies accountability for supervising trustees by making situations of insider dealings and cronyism a judicial matter, subject to bankruptcy court orders. Effectively, the UST program designed a way to hide insider dealings, cronyism, conspiracy, extortion and embezzlement under orders entered by corrupt bankruptcy judges.

The trustee states that on December 19, 2000, Thomas Laughlin on behalf of the Estate he represented, and the trustee, James Stevens, on behalf of the debtors, took "inventory" of the safe deposit box. Keep in mind that the bankruptcy case was closed in 1999 and did not reopen until 2001, which questions how James Stevens could act on behalf of the debtors in December 2000. While the trustee alleged that the debtors did not list property valued at $150,000 to $200,000 on the Schedules to justify re-opening the case, there's a different story when they take "inventory." The trustee states in his motion of November 13, 2001 that the value of the jewelry and coins belonging to the debtors is $18,940.00. Click here to see the trustee's motion including the inventory list with appraised values. In other words, the bankruptcy trustee justified reopening the bankruptcy case by alleging that the debtors hid $150,000 to $200,000 of assets, but finds the property is less than $20,000.

The undue delay raises questions. If taking inventory of the safe deposit box took place in December 2000, why did the trustee wait until February 2001 to motion to reopen the case, and why did it take him another 10 months before revealing his inventory list to the court?

In his November 13, 2001 motion, the trustee reveals that he obtained an appraisal of the jewelry. He did not receive a court order to hire an appraiser until May 2002, however. The appraised valued alleged by the trustee is $20,504.00. The trustee includes an inventory list, including the appraised value of the jewelry. What we want to concentrate on is one piece of jewelry described as:

Let's fast forward to November 7, 2002. Yes folks, it is now another year before anything else happens in this case. On November 7, 2002, bankruptcy trustee James Stevens, who was not duly appointed by the U.S. Trustee when re-opening the case, filed a motion to abandon property. Trustee James Stevens never alleges that he was re-appointed. In all his motions filed in the case since re-opening it, he states the date that the case originally commenced, and that he was appointed trustee. He conveniently omits that the case was closed and re-opened, when it was re-opened, and makes no mention if he was duly appointed upon re-opening the case. Here is the problem --- the U.S. Trustee, who is suppose to supervise panel trustees, only goes by the information provided by the panel trustee. Therefore, a Chapter 7 trustee;

Remember the one strand of 80 uniform knotted cultured pearls appraised for $2,200.00? On November 7, 2002, the trustee, James Stevens, motioned to abandon them along with another piece of jewelry. The order to abandon the property was entered on December 4, 2002. Therefore, with said order entered, one will think that the property has been returned to the debtors. NOT. On December 19, 2002, bankruptcy trustee James Stevens motioned to vacate the order for abandonment and approve the sell of the pearls. The trustee alleges in his motion that:

Not only is he selling jewelry appraised for $2,200.00 for $300.00, but WHO he is selling it to might be the reason for the massive discount. Michele Springer is an attorney with the law firm of Hinshaw & Culbertson. Chapter 7 trustee Thomas Lester is also an attorney with Hinshaw & Culbertson who hires Michele Springer to represent him in bankruptcy cases.

Should we wonder how that call from an interested party came about, and why the offer of $300.00 for a piece of jewelry worth $2,200.00 is presented as being in the "best interest" of the estate? It's in the best interest of attorney Michele Springer who works for another Chapter 7 trustee.

Bernard Natale, as a panel trustee, knows or has reason to know that Michelle Springer is an "insider." James Stevens, as a panel trustee, knows or has reason to know that Michelle Springer is an "insider." Michelle Springer represents trustee Thomas Lester in cases in the bankruptcy court in front of Judge Manuel Barbosa. Judge Manuel Barbosa is the only judge presiding in the U.S. Bankruptcy Court for the Northern District of Illinois, Western Division. Therefore, Judge Manuel Barbosa knows, or has reason to know, that Michelle Springer is an "insider."

To avoid the appearance of conspiring in the bankruptcy ring's insider deals in this case, Judge Manuel Barbosa did not sign the order approving the sell of jewelry appraised for more than $2,000. to be sold to Michelle Springer for $300. On January 22, 2003, Judge Black of the Eastern Division signed the order approving the sale. As you can see from the order, Judge Barbosa's name was crossed out.

Final Report was filed in this case on March 17, 2003. Remember that the bankruptcy trustee, James Stevens, motioned to reopened the case on the allegation that the debtors failed to list property valued between $150,000 to $200,000. After reopening the case, bankruptcy trustee Stevens valued the property for much less -- about $20,504.00. In his Final Report, bankruptcy trustee Stevens reported $3,758.85 in assets available for distribution. He reported $4,259.86 in compensation, which means that it cost more for him to reopen and administer these alleged omitted assets than what it was worth. After paying his compensation, nothing remained for distribution to creditors.

The Final Report records that the debtors paid $1,850.00 to Mark Levine of the Law Offices of Peter Francis Geraci to prepare and file their bankruptcy petition. We do not know how much additional legal fees the debtors paid to Levine and Natale in this action. We do not know how much the decendent's estate paid to their attorney for this action. The bottom-line to this bankruptcy case is that reopening it benefited the trustee, the attorney that works for another trustee who bought the pearls, and reasonably assumable, the attorneys representing the parties after the case was reopened. It certainly did not benefit creditors.