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Bankruptcy Scandal: IRS Faces Sanctions for Discovery Order Violation

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About Ralph A. Ferro Bankruptcy Lawyer

Bankruptcy Scandal: IRS Faces Sanctions for Discovery Order Violation

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Written and Verified by Ralph A. Ferro, Jr., Esq.

Bankruptcy Scandals Can Be Avoided - The Bankruptcy Code has strict rules and guidelines

It appears that the IRS was not represented well in the Eagan Avenatti case

 

Is the government required to abide by Bankruptcy Code and Motion Practices ?

Yes - Most definitely

  • Bankruptcy Case # 20-01059

Case Name: Martshak v. Eisenhower Carlson PLLC in re: Eagan Avenatti LLP

Yes, you are reading that correctly

This is the law firm that filed bankruptcy and was founded by Michael Avenatti

As you know, Michael Avenatti is in prison.

  • When a bankruptcy case is being reviewed by a Chapter 7 Bankruptcy Trustee, you must respond to a discovery request.   
  • It is not unusual for a Trustee to look over a case and ask for more details.
  • Even government entities are required to cooperate with bankruptcy inquiries.
  • Recently, the IRS was less than cooperative in bankruptcy case # 20-01059.
  • The Trustee served a subpoena upon the IRS.
  • The government tried to quash the subpoena and was not successful.
  • The Trustee filed a motion to the court to require answers to their inquiry.
  • Even after the Court, Judge Clarkson, issued a 12-page opinion detailing the questions that the IRS was required to answer, the IRS ignored the Court.
  • When the Bankruptcy Trustee requested records from the Internal Revenue Service, they were not cooperative. The Court, Judge Clarkson, issued a 12-page opinion spelling out the questions that were required to be answered.
  • This opinion was based upon the government’s request to squash a subpoena.
     Judge Clarkson determined that the IRS agent willfully violated the discovery order and refused to answer questions that were ordered.
  • The IRS was still uncooperative.

Bankruptcy Case - Key Points

Government was sanctioned $38,000 which was payable to the Trustee.

Government attempted to plead Sovereign immunity 

Judge Clarkson stood firm that sovereign immunity was not applicable.

Bankruptcy Scandal - IRS Outcome

  • $38,000 was awarded to the Trustee for the government’s improper litigation tactics.

 

Are you struggling financially and require bankruptcy assistance?

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Ralph A. Ferro, Jr. Esq. (201) 446-5904

  • I look forward to meeting with you and providing you with the best bankruptcy advice.
  • If bankruptcy is not right for your particular situation, I will tell you. 
  • Every case is unique; there are no cookie-cutter solutions.

Choosing the Best Bankruptcy Attorney is vital for your Success, I am committed to provide:

  • I understand that filing for bankruptcy is both an emotional and a trying time for clients.
  • I take the time to meet with clients personally, understand their goals and needs, and provide recommendations.
  • There are times when I advise clients that bankruptcy is not the correct option. My goal is to enable and support my clients to obtain financial success.
  • From the time I meet with a client, I handle the case from start to finish. You are never passed on to an associate.
  • No stand-in attorneys.    
  • I am completely familiar with your case at all stages of the bankruptcy proceedings.
  • I am reachable before, during, and after you hire me. 
  • No one likes to feel like their case does not matter. 
  • You can always reach me by phone.   
  • I commit to getting back to my clients quickly.
  • Clients are never frustrated by being unable to reach me because my clients are my priority – I provide my cell phone.
  • Call/text me @ (201) 446-5904 or email me ([email protected]). I will speak with you and return all my calls/texts/emails. 

Bankruptcy Scandals

Bankruptcy Scandals – should never happen and will not happen in my Bankruptcy cases.

Board Certification 

Board Certification guarantees clients that I continually pass rigorous testing, demonstrated by my bankruptcy knowledge and case results, to meet the strict requirements of the ABC. Only one other bankruptcy lawyer is Board Certified in Consumer Bankruptcy Law in Northern New Jersey.