Houston Bankruptcy Judge Sanctions "Mill" Bankruptcy Firm Macey Bankruptcy, P.C., Partners, Associate & Paralegal for Unethical Conduct

J Thomas Black
Board Certified, Consumer Bankruptcy Law- Texas Board of Legal Specialization
Posted on Jul 30, 2013

On July 16, 2013, U.S. Bankruptcy Judge Jeff Bohm issued a scathing 92-page Memorandum Opinion, finding that a law firm currently doing business as Jacoby & Myers Bankruptcy, LLP, f/k/a Macey Bankruptcy, P.C. f/k/a Macey and Aleman, L.L.P., f/k/a Legal Helpers, P.C. (the Firm), as well as their individual partners Jeffrey Aleman and Thomas Macey, their associate attorney Nosa Aduwa, and a paralegal Aurelia Gutierrez, engaged in unethical conduct (either directly or by imputation) in handling a case known as In re Bradley, Case No. 09-36608, in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division.

The Firm is a large, out of state law firm with a local office in Houston. According to the Court, the Firm is a "mill" firm, which the Court defined as a firm whose business model is dependent upon bringing in a large volume of consumer debtor clients while simultaneously minimizing expenses by having as few attorneys as possible, who are paid extremely low salaries.

The opinion was in response to an Order to Show Cause issued in response to a Motion to Show Cause filed by a chapter 7 trustee, after the Bradleys appeared at their Sec. 341(a) Meeting of Creditors and indicated that they had not had any face to face discussions with Aduwa about converting to chapter 7, or the implications of doing it. The court found that the debtors' signatures on certain pleadings was forged by the firm.

The firm and members of the firm were also show caused for: Filing the Schedules and SOFA without an attorney from the Firm personally meeting with the Debtors to review the Schedules and SOFA for accuracy; Allowing a legal assistant to practice law; Neglecting to ensure that the attorney-in-charge (i.e., Aduwa) has face-to-face communications with the clients (i.e., the Debtors); Failing to prepare the clients for the meeting of creditors; Not appearing at the meeting of creditors to represent the clients; Sending an uninformed appearance attorney to the meeting of creditors to represent the clients; Misrepresenting to the Court in a Rule 2016 Disclosure the amount of money paid by the Debtors for prosecution of their Chapter 13 case; and Misrepresenting to the Court in a Rule 2016 Disclosure [Doc. No. 121] the amount of money paid by the Debtors for prosecution of the case after conversion to Chapter 7.

The Court found that the Firm had been sanctioned previously:

Prior to the matter now at bar, the Firm has been subject to show cause orders and sanctions at least six times. Two of those show cause orders were before this Court. In all these prior instances, the Firm showed a lack of control over its attorneys and an utter disregard for its clients. The Firm has repeatedly acted in ways that are contrary to the very essence and purpose of legal representation.

In addition to money sanctions amounting to several thousand dollars, the Court ordered that the Firm could either close its Houston office, or if it elected to remain open, one of its partners must reside in the Houston area, be in charge of the Firm's practice here, must sign all legal pleadings for the Firm, and must have a status conference with the Court every 30 days in every bankruptcy case filed in Judge Bohm's court.

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