Judicial Neglect
We're taught to trust people in positions of authority. Sadly, truth spoken does not speak as loudly as money. Money talks to some Chapter 7 trustees and Judge Manuel Barbosa, who subvert the law and illegally use it for their own financial gain.
Those trustees betraying the law they swore to uphold are so bold as to tell their victims what they will do to them unless they submit to extortion demands, as though there is no judge involved. Those victims trusting the law and the authority figure wearing a black robe presiding in the U.S. Bankruptcy court in Rockford, Illinois, soon discover that the trustee was correct -- there is no judge to decide the law -- only someone that stamps orders giving color of official right to the extortion ring operating through the U.S. Bankruptcy court. This truth is publicily exposed on more than just this web site.
Judge Manuel Barbosa demonstrates conspiratorial behavior by persistently and unreasonably neglecting to act in a substantial number of cases. Most of these cases involve the Chapter 7 trustee alleging charges against debtors. The debtor(s) or attorney for the debtor(s) answer the trustee's Motion. With evidence in front of him, and hearing the arguments of all parties, Judge Manuel Barbosa continues cases by scheduling status hearings or by remaining silent. We have also observed that at times, although he enters no orders, Judge Manuel Barbosa recommends that the debtor(s) "work things out" with the trustee during a break in the hearing, or before the next status hearing.
The following is only a sampling of Judge Manuel Barbosa's judicial neglect.
Bankruptcy Case Number 00-70306
Adversary Case Number 02-07046
Chapter 7 bankruptcy trustee, Daniel Donahue, filed his adversary complaint on March 28, 2002. His complaint was to revoke the discharge of the debtor, which was entered May 30, 2000. This case involves three attorneys that have all worked for each other in other bankruptcy cases. An attorney that is also a Chapter 7 bankruptcy trustee, Bernard Natale, filed the debtors' bankruptcy petition. Bernard Natale withdrew, substituting attorney Thomas E. Laughlin of Ritz & Laughlin Ltd. to represent the debtors. On February 26, 2001, the debtors terminated Thomas E. Laughlin. Attorney Craig Willette replaced him. Craig Willette has worked for Bernard Natale in several bankruptcy cases. Therefore, using either three of Bernard Natale, Thomas Laughlin, and Craig Willette, is like using either one. They are all comrades and work for each other back and forth in bankruptcy cases.
On April 18, 2002, Craig Willette filed a response to trustee Daniel Donahue's complaint. Judge Manuel Barbosa now has the adversary complaint and the debtors' response before him in order to make a decision. The case then proceeded as follows:
A hearing was scheduled for April 29, 2002 and continued on June 24, 2002.
The June 24, 2002 hearing was continued on July 29, 2002.
The July 29, 202 hearing was continued on August 26, 2002.
In between June 29, 2002 and August 26, 2002, a compromise was reached.
Although Judge Manuel Barbosa could not or rather, would not make a decision in the case for almost four months, he ordered the compromise in less than 30 days, on August 26, 2002. The compromise, which pertained to commissions, was for $3,000.00 CASH. We are waiting for the Final Report to see if there is any distribution to creditors.
Adversary Case Number 00-07044
Filed on May 18, 2000, remained open for more than a year after the trustee received cash as a compromise. For more details, see our report, Conspiratorial Behavior. Circuit Court decreed the marital home to the ex-wife in a divorce proceeding. Trustee, Thomas Lester, alleged a fraudulent conveyance of property against the non-debtor, ex-wife. The non-debtor, ex-wife defendant was represented by an attorney, who is also a Chapter 7 trustee, (and who was also the original trustee in the case that introduced the charges). An answer to Thomas Lester's allegations was filed on June 7, 2000, including the fact that the transfer of property was ordered by the Circuit Court. Judge Manuel Barbosa made no ruling on the matter.
The conspirator Chapter 7 trustees used Judge Barbosa's silence to convince the debtor and non-debtor ex-wife that they were guilty of bankruptcy fraud. On September 7, 2000, two months after evidence was provided to Judge Barbosa proving the Order of the Circuit Court, the debtors succumbed to the extortion scheme and gave $5,000 to Thomas Lester.
Although the docket sheet reveals there were no other actions in this case after September 27, 2000, trustee Thomas Lester did not close the Adversary until April 18, 2001. As of January 18, 2002, the money trustee Thomas Lester received in 2000 has not been distributed, and this case remains open. Update! On April 18, 2002, trustee Thomas Lester filed a Final Report. All $5,115.82 was converted to his incentive commission and compensation.
Adversary Case Numbers 99-50938 and 00-07116
The first adversary complaint was filed June 2, 2000. The debtors filed for bankruptcy March 26, 1999. For more details, see our article, Unlawful Request. Trustee, James Stevens, waited more than a year since the debtors filed for bankruptcy to request the turnover of a vehicle. By the time he remembered that he was suppose to sell the vehicle, the debtors had divorced, sold the vehicle, and divided the proceeds. The attorney for the debtors, Richard Jones of Woodstock, filed no answers to James Steven's complaint. The trustee also demanded turnover of jewelry. The clock ticked on.
On October 3, 2000, Richard Jones withdrew from representing one of the debtors. The clock ticked on.
On December 7, 2000, the debtors, or at least one of them, agreed to make monthly installment payments of $200 to trustee James Stevens.
On December 8, 2000, James Stevens filed a complaint to revoke the discharge of debts for one debtor only, stating that the debtor defaulted on payments. As a Judge in the U.S. Bankruptcy Court, Judge Barbosa knows, or has reason to know, that he should not have entertained the complaint filed December 8, 2000. The reason is because federal bankruptcy law limits the time one can complain to revoke the discharge of debts to 12 months from the date of discharge. The debtors received their discharge on July 8, 1999. James Stevens was 5 months too late, but that doesn't matter to Judge Manuel Barbosa, and the attorney for the Debtor did not object. Update! Since the reporting of this case, trustee James Stevens has abandoned the sell of the jewelry and filed a Final Report.
Adversary Case Number 99-05049
Filed on April 22, 1999, the non-debtor defendant had his Motion to intervene before Judge Manuel Barbosa on May 26, 1999, and his argument before the Court on June 8, 1999. With all evidence and arguments before him, Judge Barbosa entered no decision whatsoever. From June 8, 1999, until December 1, 1999, Judge Barbosa continued hearings and remained silent.
Traumatized by being lead to believe by their attorneys that Judge Barbosa would take the house that the non-debtor had proven he purchased on his own, with the substantial downpayment coming from the sale of a house he previously owned, on October 27,1999, the defendants agreed to a $7,500 settlement. They needed time to call the finance and mortgage companies that their attorney referred them to. And -- Barbosa waited until they secured a loan. With or without the defendants' testimony, we know something shady took place, because James Steven's filed his Motion to Compromise on October 27, 1999, with a hearing date scheduled for December 2, 1999. It is highly unusual for trustees to schedule hearings that far in advance. By the evidence of scheduling such an advance hearing, it is reasonable to conclude that James Stevens conspired with the attorney for the defendants to arrange a loan for his own personal, financial enrichment.
Although he entered no rulings, orders or opinions to decide what was lawful in the case for six (6) months after all evidence was before him, Barbosa did not hesitate to enter an order for the settlement on December 2, 1999.
On July 24, 2000, bankruptcy trustee James Stevens, filed a Final Report in the case. His report reveals that from the $7,500, $4,684.03 was diverted to his and his attorney, Jason Rock's, compensation and recovery commission. Since Judge Barbosa made no rulings to the agreement or disagreement of what is lawful in this case, we don't buy the excuse that the trustee and his attorney acquired such compensation because the defendants were uncooperative.
Adversary Case Number 01-07066
In this case, trustee Bernard Natale is challenging attorney fees paid to the debtor's attorney. He filed his adversary complaint on July 3, 2001. The attorney for the debtor that Natale is challenging responded on August 17, 2001. The docket sheet for this case is not in chronological order, which is also true for many of these cases. Following them takes keen perception to know when the current month's actions in the case are not listed above actions taking place months or even years before. For example, the docket sheet's chronological order is:
July 3, 2001
August 8, 2001
August 22, 2001
October 24, 2001
November 21, 2001
January 16, 2002
July 24, 2001
August 17, 2001
August 22, 2001
The descriptions are as follows:
On August 8, 2001, the hearing was continued on August 22, 2001.
On August 22, 2001, the hearing was continued on October 24, 2001.
On October 24, 2001, the hearing was continued on November 21, 2001.
On November 21, 2001, the hearing was continued on January 16, 2002.
On January 16, 2002, the hearing was continued on February 27, 2002.
The certificate of service directed to the defendant, dated July 24, 2001, is listed AFTER the January 16, 2002 hearing continuation.
The August 17, 2001 answer by the defendant is listed after the Jan. 16, 2002 entry.
The hearing on August 22, 2001, is listed after the January 16, 2002 entry.
Something is being camouflaged in these out of sequence entries. We are not sure what it is. What we know for sure is that the defendant entered his answer on August 22, 2001. What is taking Judge Barbosa so long to rule on the matter, where he still has to continue it until February 27, 2002?
When this corporate debtor filed for bankruptcy in December 2000, there was someone present in the outer room to the courtroom, who overheard Bernard Natale talking with another trustee about the case. They overheard the two trustees discussing that Rockford lawyer, Gary Flanders, should represent the debtor so they could get the case going -- (whatever that means to them). The attorney for this corporate debtor is in another state. We have nothing besides the testimony of this reliable informer. However, seeing that Judge Barbosa has continued this case for five (5) months now without a ruling, it is reasonable to assume that his delay is to discourage the attorney for the debtor so he withdraws. Update! As of July 19, 2002, this case still continues.
Adversary Case Number 99-05087
Filed on June 30, 1999, the docket sheet reveals that there were no answers, orders or other documents filed in the case until March 1, 2000 when the case was dismissed.
On July 1, 1999, a status hearing was scheduled for August 9, 1999.
On August 9, 1999, the hearing was continued for September 22 1999.
On September 22, 1999, the hearing was continued for November 3, 1999. However, the docket sheet does not reveal a hearing taking place on November 3, 1999. It's next entry is for December 6, 1999, when the hearing was continued for January 19, 2000.
On January 19, 2000, the hearing was continued for March 1, 2000.
On March 1, 2000, Judge Barbosa entered an order dismissing the case.
Two other Adversary proceedings were filed in this same case, numbers 99-05072 and 99-05073. Both proceedings were filed June 2, 1999. All three adversary proceedings are similar, in that hearings were continued from June 1999 until March 1, 2000, when they were dismissed.
We would like to point out that at least one complaint alleged a preference transfer of real estate. Because the docket sheets for the cases do not provide evidence of any pleadings, motions or otherwise on behalf of the debtor, it is unknown why Judge Barbosa dismissed the cases. Under the bankruptcy case, number 99-50064, there is an Order entered by Judge Barbosa, awarding trustee Stephen Balsley $11,343.60 for compensation and expenses.
Bankruptcy Case Number 99-52169
Filed July 8, 1999, this case continues as of January 2002. The trustee, Daniel Donahue, filed an objection to exemptions on September 7, 1999. The debtors filed their response on September 8, 1999. On the same day, they also filed an objection to the trustee's motion for employment. On September 22, 1999, Judge Barbosa ordered the hiring of the trustee. However, you will not find that order entered in chronological sequence on the docket sheet. Judge Barbosa's order of September 22, 1999 is entered on the docket sheet after an October 15, 2001 entry continuing hearing until November 19, 2001. If anyone cares to perform their own research to verify this information, you will find Judge Barbosa's order on page 4 of the docket sheets, (unless the sequence is changed again, which is not unusual in these cases). Although Daniel Donahue's objection, and the debtors' response, has been before Judge Barbosa since September 1999, as of January 25, 2002, Judge Manuel Barbosa has not made a decision.
Although the trustee entered an objection to exemptions in September 1999, the debtors were granted discharge of debts on October 22, 1999. Then --- the hearing continuations began.
The first hearing was continued for November 1, 1999
The November 1, 1999 hearing was continued for December 6, 1999
The December 6, 1999 hearing was continued for January 24, 2000
The January 24, 2000 hearing was continued for March 6, 2000
The March 6, 2000 hearing was continued for April 10, 2000.
On April 7, 2000, the trustee motioned for the debtors to attend a Rule 2004 exam.
The April 10, 2000 hearing was continued for May 3, 2000.
On May 3, 2000, Judge Manuel Barbosa ordered the Rule 2004 exam, and continued the hearing until May 8, 2000.
The May 8, 2000 hearing was continued for June 7, 2000.
The June 7, 2000 hearing was continued for August 2, 2000.
The August 2, 2000 hearing was continued for September 13, 2000.
The September 13, 2000 hearing was continued for October 25, 2000.
The October 25, 2000 hearing was continued for November 22, 2000.
The November 22, 2000 hearing was continued for December 20, 2000.
On December 19, the trustee motioned to compel and for sanctions against the debtors.
The December 20, 2000 hearing was continued for January 3, 2001.
The January 3, 2001 hearing was continued for January 31, 2001.
On January 12, 2001, the trustee filed his affidavit of service for his motion filed 12/19/00.
The January 31, 2001 hearing was continued for March 19, 2001.
The March 19, 2001 hearing was continued for April 30, 2001.
The April 30, 2001 hearing was continued for May 30, 2001.
On June 4, 2001, the hearing date was changed for July 2, 2001.
On June 5, 2001, the trustee motioned for an entry by default.
On July 2, 2001, the hearing was continued for July 23, 2001.
On July 11, 2001, Joseph Olsen entered his appearance for one debtor in this joint case. Joseph Olsen is also a Chapter 7 bankruptcy trustee in the same district and division where this case is filed.
On July 23, 2001, the hearing was continued for August 20, 2001.
The August 20, 2001 hearing was continued for October 15, 2001.
The October 15, 2001 hearing was continued for November 19, 2001.
The November 19, 2001 hearing was continued for December 17, 2001.
The December 17, 2001 hearing was continued for January 28, 2002.
The debtors had been Pro Se until Joseph Olsen entered his appearance. The address for the debtors' residence is in a city located approximately 35 miles east of Rockford. So how did the debtors end up with an attorney in Rockford who is also a Chapter 7 bankruptcy trustee? Have you read "The Bankruptcy Club?" If not, it will provide information on how this is possible.
Even with the entry of his appearance, Joseph Olsen has not entered any motions or pleadings on behalf of his client. A look at trustee Daniel Donahue's objection to exemptions reveals that there is a Trust involved, and a Trustee of the Trust who is not the debtor. In another case, Adversary number 00-07087, Joseph Olsen and Daniel Donahue worked together. It too involved property in Trust. In that case, Judge Barbosa entered a decision ruling that he has no jurisdiction over property in Trust, and he cannot order anything pertaining to such property.
What's taking Judge Barbosa so long to enter the same ruling in this case, which is approaching its 3 year anniversary? Update! Joseph Olsen has now withdrawn his appearance.
Bankruptcy Case Number 99-50984
The debtors filed for bankruptcy on March 31, 1999. They anticipated an income tax refund. In May 1999, they amended their Schedules to reflect the amount of the refund they received. On July 15, 1999, they received their discharge of debts. On July 26, 1999, an order was entered closing the case.
Without any hearing in the case, and without any Motion before the court, on September 8, 1999, Judge Manuel Barbosa entered an order vacating the order closing the case. It is strange that he would do so without a hearing neither a Motion, which further demonstrates conspiratorial behavior behind the scenes. With nothing before him, Judge Barbosa orders the closing of the case vacated.
Seven months later, on April 24, 2000, trustee Thomas Lester filed an Initial Report of Trustee in Asset Case. This is almost one year since the debtors filed for bankruptcy. What is not evidenced in case records, is a Motion from the trustee to be hired and compensation as attorney for the U.S. Trustee.
Four months after filing the Initial Report of Assets, on August 18, 2000, trustee Thomas Lester filed a motion to turnover property. Judge Barbosa did not delay his decision. On August 28, 2000, he entered his order demanding turnover of the non exempt portion of the tax refund to be given to the trustee by September 1, 2000.
Although there are no documents in the case providing evidence, the trustee alleged that he made monthly payment arrangements with the debtors. On February 23, 2001, Judge Barbosa entered an order finding the debtors in contempt for failure to make payments as the trustee alleges he arranged. Then --- NOTHING! Nothing until almost a year later, on January 28, 2002, when trustee Thomas Lester filed his Final Report in the case.
The Final Report reveals that trustee Thomas Lester deposited the final payment of the $3,000 tax refund on April 23, 2001. However, he kept the case open for 9 months after receiving the final installment payment. Judge Manuel Barbosa did not withdraw or revoke the contempt order, and the trustee did not document that the debtors were complying with the order, which provides more evidence of judicial neglect and conspiratorial behavior. In addition, the trustee has applied for compensation, although he never filed a Motion to be compensated. The Final Report is scheduled for hearing and approval on February 20, 2002. We wonder if Judge Barbosa will recognize the judicial neglect that the trustee did not come before the court to be hired, or if Judge Barbosa will demonstrate more of his own judicial neglect and approve payment of compensation to the trustee.
Adversary Case Number 99-05135
Bankruptcy Trustee, Joseph Olsen, filed his adversary proceeding on November 24, 1999. Based on the docket sheet, the summons for a status hearing was scheduled for December 27, 1999. Also based on the docket sheet, the Certificate of Service was entered on December 27, 1999, AFTER an entry for May 31, 2000. This case is another example where the docket sheet is not in chronological order.
On December 27, 1999, the hearing was continued for January 26, 2000.
On January 26, 2000, the hearing was continued for February 9, 2000.
On February 9, 2000, the hearing was continued for March 15, 2000.
On March 15, 2000, the hearing was continued for April 12, 2000.
Also on March 15, 2000, Brad Waller, the attorney for the non-debtor Defendant, withdrew from the case. An answer to the trustee's Motion was filed that day also.
On April 12, 2000, the hearing was continued for May 31, 2000. Also on April 12, 2000, a Motion was filed by the non-debtor Defendant for Counts I and II to be dismissed from the trustee's adversary complaint.
On May 31, 2000, the hearing was continued for June 7, 2000.
Although the docket sheet does not reveal a hearing scheduled for June 12, 2000, Judge Barbosa entered an order denying the dismissal of Counts I and II that day. A status hearing was scheduled for July 5, 2000.
On July 5, 2000, the hearing was continued for September 11, 2000. There is no explanation for scheduling the hearing so far in advance. One has to reach for an explanation by the actions following in this case. The docket sheet reveals that on July 26, 2000, the trustee filed an answer to discovery documents. Evidently, the non-debtor Defendant was required to provide documents, although there is no Order on the docket sheet demanding he do so.
The September 25, 2000 hearing was stricken, and rescheduled for November 6, 2000. However, based on the docket sheet, there were no appearances in Court on November 6, 2000.
This case goes into limbo for the rest of the year 2000 and remains in limbo for the entire year of 2001. With the complaint, and the answer to the complaint before Judge Barbosa since March 15, 2000, Judge Barbosa makes no decisions. The case comes back to life again on January 13, 2002, when the bankruptcy trustee files a Motion to abandon litigation. In the trustee's Motion, filed as Entry number 15 on the docket sheet, he states:
"Subsequent to the filing of the litigation the Trustee has made a determination that a genuine adverse relationship existed between [Defendant] and the Debtor herein which would, in all probability, negate the application of the extended insider preference period."
Two years and one month after trustee, Joseph Olsen, filed his adversary complaint, he finally acknowledges evidence which, apparently, was presented to the Court in or about June or July 2000 when he filed his answer to discovery documents.
Adversary Proceeding Number 00-07105
Filed November 14, 2000, this case evidences that the attorney for the Defendants, (one Debtor, and another that is a non-debtor), was presenting law to represent his clients and win their case. On September 14, 2001, a Motion for Compromise was entered by Jason Rock of Barrick, Switzer, Long, Balsley & Van Evera, on behalf of trustee, Stephen Balsley. For almost one year, with answers, responses and Memorandum of law in from of him, Judge Barbosa made no ruling to decide this case. However, he quickly ordered the compromise on October 10, 2001. Subsequently, the Order for compromise was vacated. Five months later, Judge Barbosa vacated his Order vacating the compromise. Three days after reinstating the Order for Compromise, the attorney for the Defendants filed a Motion to withdraw.
This case evidences conspiratorial behavior, where the Defendants are inconvenienced for periods of time even when the law is in their favor, until they finally submit to the schemes of voluntarily giving money to the trustee.
From the Docket Sheet:
November 14, 2000 - Stephen Balsley, trustee, files his adversary complaint
January 3, 2001 - Judge Barbosa enters order giving the Defendants 21 days to respond. Status hearing is set for January 31, 2001.
January 23, 2001 - Defendants file Motion to dismiss trustee's complaint.
January 31, 2001 - Hearing continued on March 21, 2001
February 1, 2001 - Minute Order - Trustee has until Feb. 28, 2001 to file a response to Motion to Dismiss.
February 28, 2001 - Response is filed.
March 21, 2001 - Hearing continued on April 30, 2001
March 22, 2001 - Minute Order
April 9, 2001 - Memorandum of Law in Support of Defendants filed.
April 30, 2001 - Minute Order - Defendant's Motion to dismiss is heard and granted. The trustee has until May 14, 2001 to file an amended complaint. The Defendants are given until May 29, 2001 to answer. Status hearing set for June 11, 2001.
May 7, 2001 - First Amended Complaint filed.
May 25, 2001 - Answer to First Amended Complaint filed.
June 11, 1001 - Hearing continued on August 27, 2001
August 27, 2001 - Hearing continued on October 1, 2001.
No hearing recorded for October 1, 2001.
September 14, 2001 - Motion to Compromise filed.
October 10, 2001 - Order approving Compromise entered.
October 29, 2001 - Hearing continued on November 26, 2001.
November 26, 2001 - Hearing continued on December 26, 2001.
December 26, 2001 - Hearing continued on February 20, 2002.
February 20, 2002 - Hearing continued on March 27, 2002.
March 4, 2002 - Order vacating Order that vacated Compromise entered.
March 7, 2002 - Motion to Withdraw as Attorney for Defendants filed.
As patterned in other cases demonstrating judicial neglect, the docket sheet for this case is not in chronological order. The dates on the docket sheet are as follows:
November 14, 2000
November 15, 2000
December 20, 2000
January 3, 2001
January 23, 2001
March 21, 2001
June 11, 2001
August 27, 2001
October 29, 2001
November 26, 2001
December 26, 2001
February 20, 2002
February 1, 2001
February 28, 2001
March 22, 2001
April 9, 2001
April 30, 2001
May 7, 2001
May 25, 2001
June 11, 2001
September 14, 2001
October 10, 2001
March 4, 2002
March 7, 2002
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We will update this as information becomes available.
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