System

<body topmargin=0 leftmargin=0 marginheight=0 marginwidth=0> <table cellpadding=0 cellspacing=0 border=0><tr> <td valign="top" colspan=2 height=90 BGCOLOR="#006699" TEXT="#080000" background="22dfd5a3.jpg"> <div> <FONT SIZE="5" COLOR="#FFFFFF" FACE="53" >Wells of Justice</FONT>     |     <FONT SIZE="2" COLOR="#FFFFFF" FACE="Times New Roman" ><A HREF="index.htm" TARGET="_top" TITLE="Wells of Justice"><U>Home</U></A></FONT></div> <div> <A HREF="purpose.htm" TARGET="_top" TITLE="Our Purpose"><U><B>Our Purpose</B></U></A><B>   |   </B><A HREF="cases.htm" TARGET="_top" TITLE="Cases"><U><B>Cases</B></U></A><B>   |   </B><A HREF="decisions.htm" TARGET="_top" TITLE="Court Decisions"><U><B>Court Decisions</B></U></A><B>   |   </B><A HREF="bpps.htm" TARGET="_top" TITLE="Bankruptcy Petition Preparers"><U><B>Bankruptcy Petition Preparers</B></U></A><B>   |   </B><A HREF="victims.htm" TARGET="_top" TITLE="For Victims"><U><B>For Victims</B></U></A><B>   |   </B><A HREF="articles.htm" TARGET="_top" 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"><U><B><IMG BORDER="0" SRC="Symb075c00b700dc99000000.png" HEIGHT="15" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">A Clear Case of Extortion</B></U></A><B> </B><FONT SIZE="2" COLOR="#000000" FACE="Times New Roman" ><B>(</B>Illinois)</FONT></div> <div> <A HREF="system.htm" TARGET="_top" TITLE="System"><U><B><IMG BORDER="0" SRC="Symb075c00b700f099000000.png" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">A System Gone Wrong</B></U></A><B> </B><FONT SIZE="3" COLOR="#000000" FACE="Times New Roman" ><B>(</B></FONT><FONT SIZE="2" COLOR="#000000" FACE="Times New Roman" >Arkansas)</FONT></div> <div> <A HREF="abuse.htm" TARGET="_top" TITLE="Abuse of Authority"><U><B><IMG BORDER="0" SRC="Wing0a7300a700dc99000000.png" HEIGHT="15" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">Abuse of Authority</B></U></A></div> <div> (Illinois) </div> <div> <A HREF="arizona.htm" TARGET="_top" TITLE="Arizona"><U><B><IMG BORDER="0" SRC="Symb075c00b700dc99000000.png" HEIGHT="15" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">Bankruptcy attorney indicted for embezzlement implicates Bankruptcy Judge and others.</B></U></A></div> <div> (Arizona)</div> <div> <A HREF="memphis.htm" TARGET="_top" TITLE="Memphis"><U><B><IMG BORDER="0" SRC="Wing0a7300a700dc99000000.png" HEIGHT="15" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">Bankruptcy Court Corruption in Memphis</B></U></A></div> <div> (Tennessee)</div> <div> <A HREF="or_.htm" TARGET="_top" TITLE="Corruption in OR"><U><B><IMG BORDER="0" SRC="Wing0a7300a700dc99000000.png" HEIGHT="15" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">Bankruptcy Court Corruption in Oregon</B></U></A></div> <div> <B><U><IMG BORDER="0" SRC="Wing0a7300a700dc99000000.png" HEIGHT="15" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0"> </U></B><A HREF="betrayal.htm" TARGET="_top" TITLE="Betrayal"><U><B>Betrayal</B></U></A><B> </B><FONT SIZE="2" COLOR="#000000" FACE="Times New Roman" >(Illinois) </FONT></div> <div> <A HREF="charis.htm" TARGET="_top" TITLE="Charis Hospital"><U><B><IMG BORDER="0" SRC="Wing0a7300a700dc99000000.png" HEIGHT="15" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">Charis Hospital</B></U></A><B> </B><FONT SIZE="2" COLOR="#000000" FACE="Times New Roman" >(Louisiana)</FONT></div> <div> <A HREF="conspiratorial.htm" TARGET="_top" TITLE="Conspiratorial Behavior"><U><B><IMG BORDER="0" SRC="Wing0a7300a700dc99000000.png" HEIGHT="15" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">Conspiratorial Behavior</B></U></A><B> </B><FONT SIZE="2" COLOR="#000000" FACE="Times New Roman" >(Illinois)</FONT></div> <div> <A HREF="confidence.htm" TARGET="_top" TITLE="Confidence Crime "><U><B><IMG BORDER="0" SRC="Wing0a7300a700dc99000000.png" HEIGHT="15" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">Confidence Crime</B></U></A><B> </B><FONT SIZE="2" COLOR="#000000" FACE="Times New Roman" >(Illinois)</FONT></div> <div> <A HREF="confidence.htm" TARGET="_top" TITLE="Confidence Crime "><U><B>Part 1</B></U></A><B> </B></div> <div> <A HREF="confidence2.htm" TARGET="_top" TITLE="Confidence"><U><B>Part 2 </B></U></A></div> <bR> <div> <A HREF="confusing.htm" TARGET="_top" TITLE="Confusing Issues"><U><B><IMG BORDER="0" SRC="Wing0a7300a700dc99000000.png" HEIGHT="15" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">Confusing Issues</B></U></A><B> </B><FONT SIZE="2" COLOR="#000000" FACE="Times New Roman" >(Illinois)</FONT></div> <div> <A HREF="itemized_billing_.htm" TARGET="_top" TITLE="Billing"><U><B>(Billing)</B></U></A></div> <div> <A HREF="defaults.htm" TARGET="_top" TITLE="Default"><U><B><IMG BORDER="0" SRC="Symb075c00b700dc99000000.png" HEIGHT="15" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">Default Orders</B></U></A><B> </B><FONT SIZE="2" COLOR="#000000" FACE="Times New Roman" >(Illinois)</FONT></div> <div> <A HREF="dd.htm" TARGET="_top" TITLE="Doubledipping "><U><B><IMG BORDER="0" SRC="Symb075c00b700dc99000000.png" HEIGHT="15" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">Double-Dipping</B></U></A><B> </B><FONT SIZE="2" COLOR="#000000" FACE="Times New Roman" >(California)</FONT></div> <div> <FONT SIZE="2" COLOR="#000099" FACE="Times New Roman" ><A HREF="longest.htm" TARGET="_top" TITLE="Longest"><U><B><IMG BORDER="0" SRC="Symb075c00b700dc99000000.png" HEIGHT="15" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">Longest Running Bankruptcy Case? </B></U></A></FONT>(California)</div> <div> <A HREF="longest2.htm" TARGET="_top" TITLE="Part 2 Longest"><U><B>Part 2</B></U></A></div> <div> <A HREF="fearing.htm" TARGET="_top" TITLE="The Fearing Couple"><U><B><IMG BORDER="0" SRC="Symb075c00b700dc99000000.png" HEIGHT="15" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">Victims Lack Standing to Exercise Due Process </B></U></A><FONT SIZE="2" COLOR="#000000" FACE="Times New Roman" >(California)</FONT></div> <div> <A HREF="inslaw.htm" TARGET="_top" TITLE="inslaw"><U><B><IMG BORDER="0" SRC="Symb075c00b700dc99000000.png" HEIGHT="15" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">The Inslaw Case Series </B></U></A></div> <div> Widespread Corruption In The Federal Bankruptcy Courts </div> <div> <A HREF="polaroid.htm" TARGET="_top" TITLE="Polaroid"><U><B><IMG BORDER="0" SRC="Symb075c00b700dc99000000.png" HEIGHT="15" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">What Happened to Polaroid?</B></U></A><B> </B><FONT SIZE="2" COLOR="#000000" FACE="Times New Roman" >(Massachusetts)</FONT></div> <bR> <div> <A HREF="stealingland.htm" TARGET="_top" TITLE="Stealing NonDebtor Owned Property"><U><B><IMG BORDER="0" SRC="Wing0a7300a700dc99000000.png" HEIGHT="15" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">Stealing Non-Debtor Owned Property</B></U></A><B> </B><FONT SIZE="2" COLOR="#000000" FACE="Times New Roman" >(Illinois)</FONT></div> <div> <A HREF="unlawful.htm" TARGET="_top" TITLE="Unlawful Request"><U><B><IMG BORDER="0" SRC="Symb075c00b700dc99000000.png" HEIGHT="15" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">Unlawful Request</B></U></A><B> </B><FONT SIZE="2" COLOR="#000000" FACE="Times New Roman" >(Illinois)</FONT></div> <bR> </td> <td valign="top" height=390 BGCOLOR="#FFFFFF" TEXT="#080000"> <div> <I>A </I><I>System</I><I> Gone Wrong</I></div> <div>   </div> <div> <B>Wells of Justice Comment:</B>  In 2006, Barbara and Stephen Griffin were found guilty of money laundering and bankruptcy fraud.  They were scheduled to begin serving time in federal prison in April 2007.  We remind readers that Barbara Griffin did not file for bankruptcy, but was presented to the jury by the U.S. Attorney as though she was a debtor with no legal entitlement to any portion of an income tax refund.</div> <bR> <div> While their trial was underway, bankruptcy trustee Richard Cox confiscated the Griffins' personal furniture and their house.  We remind readers again that Barbara Griffin did not file for bankruptcy, and as such, bankruptcy trustee Cox has no legal entitlement to take her furniture and personal belongings.</div> <bR> <div> Let this be a lesson to all married persons who file bankruptcy when their spouse does not join them in a joint case.  Do not be deceived into believing that state law prevails to protect jointly owned marital property.  Marital property law in the State of Arkansas is liberal, but did not protect Barbara Griffin's interests in her marital home and furniture.  In this case, Bankruptcy Judge Mixon disregarded all state law pertaining to non-debtor ownership rights in marital property.</div> <bR> <div> Let this also be a lesson that filing chapter 13 or chapter 11 to pay your creditors and leave you with transportation, and a roof over your head is no guarantee that the case will not be converted to chapter 7 leaving you with nothing.  </div> <bR> <div> Let this also be a lesson that holding insurance policies in a safe deposit box and being deprived of access once filing bankruptcy, does not prevent the bankruptcy trustee from alleging that you hid assets of the bankruptcy estate.</div> <bR> <div> Upon considering that bankruptcy trustee Richard Cox, by Orders entered by the Bankruptcy Judge Mixon, wiped out the non-debtor, including her furniture, vehicle and house, it appears that the only option he afforded her was being housed in a federal prison. </div> <bR> <div> While the Griffins' serve their time, bankruptcy trustee Richard Cox profits from his sliding scale commission of assets he <I>recovered</I> in the case.  Bankruptcy trustee Cox also received, by Court Order, free air miles that the Griffins' acquired.  Those miles are not transferrable into cash, so maybe Cox plans on using the Griffins' free air miles for a personal trip.</div> <bR> <div> <B>A SYSTEM GONE WRONG   </B></div> <div> By Barbara Griffin</div> <bR> <div> <B>ONE MAN'S STORY </B></div> <bR> <div> We see throughout history, that a "good" thing can become "bad" when it encounters people whose main goal is to capitalize on other people's misfortunes for their own gain.  </div> <bR> <div> Do we continue to sit back and watch another  "system" wreck havoc on the lives of innocent people?   The Bankruptcy System needs to be impartially investigated.  That investigation needs to include those in the United States Trustee Program.  I want to address your attention to one example that took place in Arkansas. </div> <bR> <div> Stephen Griffin is an Arkansas man who has been taught to always do the right thing.  Griffin reached a point in his life where he wanted to downsize his business because of poor health and the desire to have a greater quality of life.  Griffin, at the time was overseeing the operation of  seven  different companies; Budget Tire and Supply Company, G & K Oil Company, Griffin-Mardis Investment Company Inc., Family Shop Inc., NWA Family Shops Inc., Empire Liquors Inc. and Petroleum Equipment Company of Arkansas, Inc.  These companies had combined retail sales of $40 million annually.<FONT SIZE="3" COLOR="#FF0000" FACE="Times New Roman" >   </FONT>Two <I>friends </I>approached him about how their business interest and Stephen's business interests would benefit from a merger because they "needed" one another.   They needed an infusion of working capital and Griffin needed administrative assistance.  Six months later, $6 million of Griffin's assets had flowed out of Griffin's hands and into theirs and the paper trails of Griffin's equity showed a decrease of $6 million.</div> <bR> <div> Then the hard times hit.  A major ice storm struck in late December of 2000 and hampered the operation of all entities in the enterprise.  Griffin suffered a massive heart attack on December 27, 2000, and underwent open-heart surgery on January 1, 2001.  Griffin wasn't there to oversee the day to day operations and alleges that his <I>friends </I>couldn't/didn't take care of business.  When it became evident that there was a financial crisis, a "solution" was repeatedly discussed.  Griffin would file bankruptcy.  His <I>friends </I>and the primary secured lender (who had been the benefactor of a portion of the flow of equity from Griffin to his <I>friends</I>) encouraged this plan.  Upon returning to work, Griffin found boxes and boxes of unpaid bills, including bills to the IRS.  The <I>friends </I>left. </div> <bR> <div> Griffin admitted to his mistake of putting trust in others and took full blame.  He began the process of making restitution to all the creditors who were hurt by this venture.  Mr. Griffin built his financial empire beginning in 1976 upon graduation from college.  Then he trusted the wrong people and in one year, lost $32 million in assets that he had spent a lifetime building. </div> <bR> <div> Griffin tried everything possible to keep from filing bankruptcy and did his best to pay creditors. He liquidated assets to have money to pay creditors. Between April of 2001 and December of 2001 he paid creditors a total of $267,098.41.  Griffin went to the Rose Law Firm in the summer of 2001 and expressed concern that he might be forced to filing bankruptcy due to creditors filing law suits.  He was advised that whatever he did between then and the potential filing of bankruptcy to be sure to keep a paper trail. He received a 2000 tax refund of $94,333.00 in November of 2001. </div> <bR> <div> Griffin was forced to file bankruptcy due to three creditors filing lawsuits with the third one being from his <I>friends.</I></div> <div>  </div> <div> Griffin had met with a bankruptcy attorney in January of 2002. He had 3 potential bankruptcy estates which would each need their own personal attorney. He was given pages of schedules and told to go fill them out.  His secretary, his wife, and Griffin spent three weeks filling out these schedules. Once the bankruptcy attorney saw the schedules, he resigned saying it was too big for him to handle.  Griffin then hired another attorney. Griffin expressed concern about not having put everything on the schedules. He was told that if anything was left out, they could add it later.</div> <bR> <div> On January 14, 2002 Stephen A. Griffin filed a voluntary Chapter 11.  At this time, he had $31 million in assets and $14.2 million in debt.  Griffin's problem was he had no cash flow.  His major assets were tied up in land.  He filed a Chapter 11 hoping to reorganize the debt by lowering interest rates on notes and increasing his cash flow to where he could pay creditors. Bankruptcy was a new journey and he relied heavily on the advice of his bankruptcy attorney, (also a Chapter 7 trustee). <B>This attorney never filed a plan on behalf of his client even though Griffin pleaded with him to do so.</B></div> <bR> <div> The Chapter 11 was converted to a Chapter 7 because the primary secured creditor argued that creditors (particularly unsecureds) would be better protected by liquidation of assets. Griffin's bankruptcy attorney resigned.  </div> <bR> <div> Throughout the Chapter 11 and the Chapter 7,  $171,607.49 was paid to creditors of the bankruptcy estate. A money trail has been produced that shows the IRS refund was then taken by Griffin's wife and put into a CD so it would earn interest.  That CD matured and it was put into another CD. That CD matured and it was put into a money market account so it would still earn interest but be more accessible. The motivation behind these transfers was to make the most of the money left. </div> <bR> <div> Griffin went to another attorney, David Nixon, who is not on the Panel of Bankruptcy Trustees, and filed a Motion to Reconvert.  A plan was filed that paid 100% of all creditors (secured and unsecured)   The <I>friends </I>and the lender who had encouraged Griffin to file bankruptcy then turned on their "friend" and became the primary objectors to any plan or reorganization filed by Griffin.</div> <div>   </div> <div> How does a person go from filing a Chapter 11 with schedules showing 31 million in assets and 14 million in liabilities to emerging from bankruptcy with a potential of still owing $2.5 to $3 million in debt?  Griffin only wanted to file bankruptcy so he could gain back cash flow and pay his creditors. The Bankruptcy Trustee's job is to protect assets for unsecured creditors. However, what happened to 14 million dollars of assets?   </div> <bR> <div> During the course of the chapter 7, three bankruptcy trustees served.  They worked together to execute a settlement agreement among those who still owed Griffin money. Six million was paid to the <I>friends </I>before bankruptcy.  The bankruptcy trustee settled his preference action for $50,000.  The <I>friends </I>said they had no money. The <I>friends </I>were represented by a long time mentor of the Chapter 7 Trustee and of Griffin's Chapter 11 attorney. </div> <bR> <div> In this same settlement agreement, the <I>friends </I>had first option to purchase 8 Convenience Stores and a Liquor Store with an approximate value of $13.8 million for the amount owed to the primary secured lender.  There was no auction and on one else was given the opportunity to purchase the property.  Following this "sugar daddy" deal with the Trustee, the <I>friends </I>are now out buying property, making highly publicized $300 million deals, and operating Griffin's former properties. The Chapter 7 Trustees received $250,000 in administrative and attorney fees.  </div> <bR> <div> Flash Market had approximately $1 million liability and settled this claim for $50,000. The primary lender had the potential for lender liability and had also cross-collateralized a loan for $650,000 within a year of the filing of Griffin's bankruptcy. This was also settled for $50,000. Prior to the settlement agreement, the bankruptcy trustee sold a $3.2 million medical building with 1.9 million debt was sold for $50,000 to another partner of Griffin.</div> <bR> <div> All property has now been liquidated or abandoned from the bankruptcy estate except for the personal home of the Griffins'.  The bankruptcy trustee is fighting to keep them from changing their exemptions to include the house because he wants the equity in the house.  The only litigation that remains is complaints against the Griffins, the Griffin's son, and other unsecured creditors for assets that were not listed on their schedules and preferential transfers.</div> <bR> <div> In light of all this, Griffin is now facing criminal charges for a $94,333 tax refund that was left off his schedules. He has been charged with concealment of assets. This represents less than 2/100th of his bankruptcy estate that the bankruptcy trustee practically gave away.  </div> <bR> <div> <B>The U.S. Attorney has alleged charges against Griffin of money laundering.  The U.S. Attorney has requested that Griffin voluntarily enter a plea bargain to prevent indictment by the federal grand jury.  The U.S. Attorney has also alleged that Griffin has committed perjury, because Griffin did not remember the income tax return filed that resulted in the refund.</B></div> <bR> <div> For the last 20 years, Griffin had always used the same Fort Smith accountant. When the <I>friends </I>entered the picture, they brought in their own accountant from California. The 2000 tax return was compiled by the accountant from California that the <I>friends </I>had hired.   Griffin did not remember the accountant in California doing his tax return. All he remembered was that they were trying to put together the financials needed for the pending partnership. During a hearing when Griffin was showed a copy of a 2000 tax return that was compiled by the California accountant, he testified that he did not remember that tax return. It confused him because the tax return was not signed. He did not know that it was customary practice for the client's copy not to be signed.  Because Griffin suffered a massive heart attack in December of 2000, he has trouble with memory.  His memory problem is worst when he is under stress. </div> <div>  </div> <div> The records show that Griffin always paid creditors on time and was never late on a bank payment until he took on <I>friends</I> and suffered a massive heart attack. He filed a Chapter 11 because he was told this was a way to reorganize and pay creditors. If he had been allowed to file a plan, unsecured creditors would have been paid 100%. </div> <bR> <div> Griffin's discharge from bankruptcy will be denied.  He now faces the scenario of having the potential of $2 to $3 million dollars of debt after having gone through the bankruptcy system.   How does a man file bankruptcy with the intent of paying creditors and end up facing criminal charges? </div> <bR> <div> Griffin has paid over $200,000 in attorney fees since the filing of bankruptcy. The Griffins have both spent hours and hours of gathering information, attending hearings, visiting with attorneys, and compiling evidence to be used in court hearings.  Griffin's wife's attorney was sanctioned by the court at one time during the hearings.  Her attorney suffered severe medical complications during the hearings and ended up filing disability and having her bar license temporarily suspended.  Her attorney could not represent Griffin's wife anymore in the bankruptcy so rather than pay anymore in attorney fees; Griffin's wife has chosen to represent herself.   </div> <bR> <div> Griffin is now in the position of having to hire a criminal attorney to defend him in the criminal charges that have been filed.  He has not been offered or provided with a public defender.  Griffin testifies that without his wife's support he would have given up a long time ago.  His wife has had nightmares of them both being put in jail.  The Griffins still live in the same town where he was once considered a very successful businessman.  After the filing of bankruptcy, he was forced to mow lawns, clean car washes, do anything he could to survive.   Griffin will never again be able to have anything in his name.  He still finds it hard to go to social gatherings because of the shame he feels from allowing his businesses to fail and causing creditors not to be paid.  </div> <bR> <div> Right before the filing of the bankruptcy, Griffin was approached by a friend of the <I>friends </I>and offered an <I>opportunity for an under the table deal</I> to let the friend buy all the property from the court and after the fact the friend would let Griffin work his way back into part of it.   </div> <bR> <div> Believing this was illegal and believing in the legal system, Griffin turned them down. If Griffin  went through Chapter 11 bankruptcy and reorganized, he would be able to pay all the creditors.  Since the filing of the bankruptcy, he has fought valiantly to keep the estate intact and pay creditors, but all his efforts have failed. </div> <bR> <div> We need to get the attention of public officials that drastic changes need to be made immediately to the bankruptcy system.  The Griffin's only hope is that by telling their story they might prevent other innocent people from having to go through this trauma.</div> <bR> <div> <B>FACTS AND STATISTICS</B></div> <div> Not only are people who find themselves in the position of a Chapter 7 harmed financially, emotionally, and in reputation, but many creditors are also damaged.  One creditor said that he </div> <div> has gone before the bankruptcy court on two different occasions and was refused payment on the $20,000 plus owed to him, because "there was not enough money." This needs to be investigated.  If it has happened to one person, it has happened before and will happen in the future.  Many people file bankruptcy with the hope of salvaging some of  their assets and at the same time reorganizing and paying off creditors.  Instead,  people are losing what they have spent their whole life accumulating. It's not, as in filing chapter 11 or chapter 13 is to write-off their debts, but because bankruptcy trustees want a chapter whereby they can benefit from assets.  Why pay court fees for being in chapter 11, when the panel trustees can pocket commission and financially benefit their hired professionals from assets that would otherwise be distributed to creditors under chapter 11? </div> <bR> <div> The United States Trustee Program (USTP) has collected statistics on distributions to creditors, professionals, and trustees in chapter 7 asset cases since 1993. In 2000, the USTP and chapter 7 trustees implemented a new data collection format (Form 4) for chapter 7 asset cases filed or converted to chapter 7 on or after July 1, 1999. This change significantly increased the amount of data collected and has improved the accuracy and usefulness of the data. In this article we give a brief overview of the most recent asset case statistics. In June 2001 the Executive Office for U.S. Trustees issued a detailed report on chapter 7 asset cases closed between calendar years 1994 </div> <div> and 2000.  This report can be found at: www.usdoj.gov/ust/statistics/stats-new/statisticreports.htm </div> <bR> <div> It is reported that certain large credit card companies supported "means based" bankruptcy which is the center of argument in the just signed new bankruptcy reform.  The article "Bankruptcy by the Numbers - Chapter 7 Asset Cases" provides statistics proving that unsecured creditors are short-changed in chapter 7 asset cases.  The reason as to why they are short-changed has not, to our knowledge, come to the attention of Congress.  Statistics provided by the Executive Office for United States Trustees provide that the majority of assets in chapter 7 cases are distributed as compensation to chapter 7 trustees and their hired professionals. </div> <bR> <div> The article provides the following statistics: </div> <div> ASSET CASES CLOSED - YEAR ENDED JUNE 30, 2002 </div> <div> TOTAL DISBURSEMENTS:  $1,453,254,984 (1.4 million dollars)  </div> <div> Trustee Compensation   $85,492,924   9 %   </div> <div> Trustee Attorney Fees   $52,886,928    6 %   </div> <div> Outside Attorney Fees   $123,538,163  5 %   </div> <div> Other Professional Fees and Expenses $66,155,213  6 %   </div> <div> Administrative Costs   $141,798,509  8 %   </div> <div> Prior Chapter Costs  $64,855,525  5 %   </div> <div> Assets Distributed to Secured Creditors  $366,867,659  2 %   </div> <div> Assets Distributed to Priority Creditors  $97,852,165  7 %   </div> <div> Assets Distributed to General Unsecured Creditors  $364,155,620  1 %   </div> <div> Other Disbursements  $89,652,280  2 % </div> <bR> <div> <B>CONCLUSION </B></div> <bR> <div> Chapter 7 bankruptcy trustees have statutory duty to represent the interests of </div> <div> unsecured creditors.  Unsecured creditors are not generally involved in bankruptcy cases to challenge distribution of assets.  Unsecured creditors do not "hire" bankruptcy trustees to agree on fees for administering cases.  Little known is the statute that provides that chapter 7 debtors and/or </div> <div> unsecured creditors can select or elect a trustee before or at the 341(a) meeting of creditors.  Debtors and unsecured creditors have dropped the ball and allowed private parties appointed by U.S. Trustees to develop a system where chapter 7 asset cases serve more financial benefit to chapter 7 trustees and their hired professionals than to unsecured creditors.    </div> <bR> <div> The United States Department of Justice responds to victims of bankruptcy court corruption that they should obtain private legal counsel to pursue civil options.  It has been reported from various regions that U.S. Trustees have the type of influence with U.S. Attorneys that hinders justice. For those parties who do pursue civil options, federal judges dismiss their case on the basis that panel trustees are appointed by the court and therefore, have judicial immunity.  This is incorrect.  The U.S. Trustee Program was developed to prevent bankruptcy judges from appointing case trustees.  Under the U.S. Trustee Program, Regional U.S. Trustees select a "panel" of trustees and appoint them to chapter 7 cases.  Someone in Congress should inform federal judges that the court does not appoint trustees under the U.S. Trustee Program.</div> <bR> <div> U.S. Attorneys have an unwritten mandate that requires the FBI to receive their approval before investigating bankruptcy trustees.  U.S. Trustees violate RICO and the Sherman Act by targeting bankruptcy petition preparers.  Price fixing goes on in the background, and case decisions </div> <div> revealing this secretive price fixing are unpublished.  </div> <bR> <div> Bankruptcy  trustees, and attorneys for U.S. Trustees are so secure in perpetrating federal offenses that they arrogantly boast of what they will do, which tells litigants  that their cases are already pre-decided.  Bankruptcy judges disregard law, binding legal principles, and jurisdiction so that bankruptcy trustees prevail. </div> <bR> <div> Bankruptcy court corruption is not just a matter of bankruptcy trustees in collusion with corrupt bankruptcy judges.   The corruption is supported, and justice hindered by high ranking officials in the United States Trustee Program.  The corruption has advanced to punishing any and all who mention the criminal acts of trustees and organized crime operating through the United States </div> <div> Bankruptcy Courts. </div> <bR> <div> As though greed is not enough, the trustees, in collusion with others, intentionally go forth to destroy lives.  Exemptions provided by law are denied debtors.  Cases are intentionally and unreasonably kept open for years.  Parties in cases are sanctioned to discourage them from pursuing justice.  Contempt of court powers are misused to coerce litigants into agreeing with extortion demands.   This does not ensure integrity and restore public confidence.   The American </div> <div> public, victimized and held hostage by bankruptcy court corruption, have no where to turn.    </div> <bR> <div> People wrongfully assume that all victims of bankruptcy court corruption are debtors.  You do not have to file for bankruptcy to be a victim of crimes committed under color and claim of official right of the United States Bankruptcy Court.  Creditors, babysitters, family members, heirs, employers, and employees of debtor companies are victims.  Those attorneys who do not submit to </div> <div> the racketeering practices of bankruptcy trustees are victims of the corruption.  They are sanctioned, threatened with disbarment, and the cases they do file are generally dismissed on the allegation that the attorney did not file a schedule, or did not file the petition properly.</div> <bR> <div> People wrongfully assume that only the young and financially irresponsible file for bankruptcy. Medical bills and lost of retirement income are also reasons people file bankruptcy.   Divorce can lead into one or both spouses filing for bankruptcy.  Unemployment and underemployment has resulted in people filing for bankruptcy.   Situations vary, and debtors should not be generalized, neither should judgment upon debtors be used to dilute the ugliness of corruption in the bankruptcy courts.  </div> <bR> <div> Law enforcement does not refuse to investigate the murder of someone reported to have a bad reputation.  However, trustees and the Executive Office for United States Trustees deceive law </div> <div> enforcement and the public by presenting their victims as people who deserve to be victimized.   </div> <bR> <div> Due process is denied in the bankruptcy courts.  The public assumes that any case involving </div> <div> allegations of criminal acts or violations of law affords defendants with free legal counsel and a trial by jury.  NOT IN THE BANKRUPTCY COURTS.  Bankruptcy law is civil.  It is the only civil court that provides for U.S. Trustees to prosecute litigants in civil matters to advance criminal charges.   </div> <div>  </div> <div> Bankruptcy Courts are perfect kangaroo courts. </div> <div>  </div> <div> The judges take the word of trustees and U.S. Trustees as "gospel." </div> <div>  </div> <div> Judges have no authority to appoint trustees, but do have authority to discharge or retain them in cases. </div> <bR> <div> Upon filing bankruptcy, debtors become legalized slaves.  Their exemptions are not guaranteed   unless the trustee allows them.  Debtors have no rights to appeal bankruptcy court decisions pertaining to how much property is sold for, neither distribution of assets, neither amounts distributed to professionals hired by bankruptcy trustees.  The Bankruptcy Code does not provide for who has or does not have standing to oppose trustees and bankruptcy court orders.  However, by legislating from the bench, federal courts have decided that only aggrieved parties with pecuniary interests have standing to oppose or appeal bankruptcy court orders that concern sell of property, or distribution of assets.  The judges' logic is that the debtor ceases to own everything once filing the bankruptcy petition and therefore, lacks standing.  Hence, upon filing a bankruptcy petition, debtors are denied access to the courts. </div> <bR> <div> Bankruptcy trustees are paid a percentage from assets in cases, which motivates them to administer cases for their personal enrichment.   </div> <bR> <div> The Bankruptcy Code is written so that trustees and judges can entertain violations based on what the Code does not say.   Often, alleged crimes have no basis other than the "intent" of defendants.  Bankruptcy judges enter decisions and orders based on their clairvoyance talents of claiming to know the WHY for defendants' actions.  </div> <bR> <div> <B>DO WE HAVE A SOLUTION?  YES </B></div> <bR> <div> A great public outcry must go forth.   </div> <div> <IMG BORDER="0" SRC="Symb075c00b700f000000000.png" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">The Department of Justice must investigate federal offenses committed by bankruptcy trustees.  </div> <bR> <div> <IMG BORDER="0" SRC="Symb075c00b700f000000000.png" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">The Department of Justice must investigate corrupt bankruptcy judges. </div> <div>  </div> <div> <IMG BORDER="0" SRC="Symb075c00b700f000000000.png" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">The Congress must legislate and pass laws to remove the commission based pay to trustees, which inspires them to misuse and abuse their positions for their personal enrichment. </div> <bR> <div> <IMG BORDER="0" SRC="Symb075c00b700f000000000.png" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0"> States must pass laws that guarantee the payment of exemptions to debtors when secured property is sold by bankruptcy trustees.  </div> <bR> <div> <IMG BORDER="0" SRC="Symb075c00b700f000000000.png" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">  The Congress must pass laws that limit commission to realtors and auctioneers who sell real estate in bankruptcy cases.</div> <bR> <div> <IMG BORDER="0" SRC="Symb075c00b700f000000000.png" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">Defendants accused of committing bankruptcy fraud should be provided with a public defender during the bankruptcy case and a trial by jury.  </div> <bR> <div> <IMG BORDER="0" SRC="Symb075c00b700f000000000.png" HEIGHT="16" WIDTH="16" ALIGN="bottom" HSPACE="0" VSPACE="0">Petition preparers accused of violating Section 110, particularly in suits exceeding $25,  should be given Constitutional right to a trial by jury and provided with a public defender.</div> <bR> <div> <IMG BORDER="0" SRC="Symb075c00b700f000000000.png" HEIGHT="16" WIDTH="16" ALIGN="bottom" HSPACE="0" VSPACE="0">Congress must pass laws that all bankruptcy judges be held to the 14 years for which they are appointed and not simply reappoint them forever.   </div> <bR> <div> <IMG BORDER="0" SRC="Symb075c00b700f000000000.png" HEIGHT="16" WIDTH="16" ALIGN="bottom" HSPACE="0" VSPACE="0">Congress must pass laws that no bankruptcy judge can serve in his home state or in a state with which he has an association through attorneys in his home state. </div> <bR> <div> We would also propose that all members of the Chapter 7 Trustee panel: </div> <bR> <div> (a)  Be required to have an undergraduate degree in accounting so they can understand business procedures.   </div> <div> (b)  That no trustee can be appointed who has a license to practice law, or in the alternative, that trustees who are licensed attorneys are not paid legal fees and commission from the same case </div> <div>       (c)  That Chapter 7 Trustee's be appointed for a maximum period of 5 years with no ability to</div> <div>  be re-appointed. </div> <div> (d)  That those attorneys who serve on the Chapter 7 Trustee's  panel be prohibited from engaging in the private practice of law while so  serving.    Nor could they serve as Trustee on any case in which any law firm with which they have previously had an association is involved. </div> <bR> <div> The Bankruptcy System was originally set up to help people reorganize, pay back what they could to creditors or be discharged from debts to start over.  However, as we have seen throughout history, unbridled greed will swing the pendulum to the other side.  Once again, people seeking to benefit from other's misfortunes will exploit a good concept and many people's rights will be violated in the process.  Bankruptcy can hit anyone.  Financial disaster can occur from lawsuits, medical problems, loss of income, divorce etc.  We must stop and investigate the system and incorporate proper checks and balances to where it will function as it was originally intended.</div> <bR> <div> REFERENCES: </div> <div>  Bankruptcy by the Numbers - Chapter 7 Asset Cases" </div> <div> ED FLYNN Executive Office for United  States Trustees </div> <div> <A HREF="mailto:_Edward.Flynn@usdoj.gov" TARGET="_top" TITLE="mailto:_Edward.Flynn@usdoj.gov"><U><U>_Edward.Flynn@usdoj.gov</U></U></A>_ (<A HREF="mailto:Edward.Flynn@usdoj.gov" TARGET="_top" TITLE="mailto:Edward.Flynn@usdoj.gov"><U><U>mailto:Edward.Flynn@usdoj.gov</U></U></A>) </div> <bR> <div> GORDON BERMANT Burke, Virginia <A HREF="mailto:_Gordon.bermant@verizon.net" TARGET="_top" TITLE="mailto:_Gordon.bermant@verizon.net"><U><U>_Gordon.bermant@verizon.net</U></U></A> _ </div> <div> (<A HREF="mailto:Gordon.bermant@verizon.net%20" TARGET="_top" TITLE="mailto:Gordon.bermant@verizon.net%20"><U><U>mailto:Gordon.bermant@verizon.net%20</U></U></A>) </div> <bR> <div> SUZANNE HAZARD Executive Office for United States Trustees </div> <div> <A HREF="mailto:_Suzanne.Hazard@usdoj.gov" TARGET="_top" TITLE="mailto:_Suzanne.Hazard@usdoj.gov"><U><U>_Suzanne.Hazard@usdoj.gov</U></U></A>_ (<A HREF="mailto:Suzanne.Hazard@usdoj.gov" TARGET="_top" TITLE="mailto:Suzanne.Hazard@usdoj.gov"><U><U>mailto:Suzanne.Hazard@usdoj.gov</U></U></A>) </div> <bR> <div> <A HREF="http://www.wellsofjustice.com/" TARGET="_top" TITLE="http://www.wellsofjustice.com/"><U><U>http://www.wellsofjustice.com/</U></U></A></div> <bR> <div> <I>The views and facts expressed in this article are those of the writer unless expressly admitted as a Wells of Justice comment.</I></div> <bR> <bR> </td> </tr></table></body>