11th Circuit Says This Prominent Attorney And Judge Acted Improperly, Reverses Bankruptcy Sale

, Daily Business Review

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A federal appeals court reversed the bankruptcy sale of a Deerfield Beach company and chastized a prominent Fort Lauderdale attorney for obstructing discovery.

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  • Frank

    Pertinent text from the decision:

    All the more troubling is that Pugatch, a sworn officer of the court, actively obstructed Wortley‘s efforts to obtain evidence of the plan to file for involuntary bankruptcy. He and his associate falsely responded to Wortley‘s November 2010 discovery request by saying that “all non-privileged documents responsive to [Wortley‘s requests]” had been produced. Wortley‘s Mot. for Reh‘g, Ex. H at 3. Clearly, some significant non-privileged and responsive documents had been withheld. Pugatch also represented Tarrant at the deposition, where Tarrant falsely testified that he had had no conversations with Juranitch about filing an involuntary bankruptcy petition. Having participated in the June 17–19 email discussions about the involuntary bankruptcy petition, Pugatch knew that testimony was false, yet he did nothing to correct it or to remedy the earlier failure to produce the June 17–19 email messages. The rules regulating attorney conduct of the Florida Bar required him to do so. See R. Reg. Fla. Bar 4–3.3(a)(2) (“A lawyer shall not knowingly fail to disclose a material fact to a tribunal when disclosure is necessary to avoid assisting a criminal or fraudulent act by the client.”); id. at (a)(4) (“A lawyer shall not knowingly offer evidence that the lawyer knows to be false. A lawyer may not offer testimony that the lawyer knows to be false in the form of a narrative unless so ordered by the tribunal. If a lawyer, the lawyer‘s client, or a witness called by the lawyer has offered material evidence and the lawyer comes to know of its falsity, the lawyer shall take reasonable remedial measures, including, if necessary, disclosure to the tribunal. A lawyer may refuse to offer evidence that the lawyer reasonably believes is false.”). In sum, the parties, who had the evidence that Wortley needed to substantiate his claims, blocked his access to it and deliberately prevented him from finding it. Wortley eventually obtained the emails from a different attorney as part of another lawsuit, but that does not diminish Wortley‘s due diligence or his adversaries‘ apparent malfeasance in the litigation that led to this appeal.

  • Frank

    Pertinent text:

    All the more troubling is that Pugatch, a sworn officer of the court, actively obstructed Wortley‘s efforts to obtain evidence of the plan to file for involuntary bankruptcy. He and his associate falsely responded to Wortley‘s November 2010 discovery request by saying that “all non-privileged documents responsive to [Wortley‘s requests]” had been produced. Wortley‘s Mot. for Reh‘g, Ex. H at 3. Clearly, some significant non-privileged and responsive documents had been withheld. Pugatch also represented Tarrant at the deposition, where Tarrant falsely testified that he had had no conversations with Juranitch about filing an involuntary bankruptcy petition. Having participated in the June 17–19 email discussions about the involuntary bankruptcy petition, Pugatch knew that testimony was false, yet he did nothing to correct it or to remedy the earlier failure to produce the June 17–19 email messages. The rules regulating attorney conduct of the Florida Bar required him to do so. See R. Reg. Fla. Bar 4–3.3(a)(2) (“A lawyer shall not knowingly fail to disclose a material fact to a tribunal when disclosure is necessary to avoid assisting a criminal or fraudulent act by the client.”); id. at (a)(4) (“A lawyer shall not knowingly offer evidence that the lawyer knows to be false. A lawyer may not offer testimony that the lawyer knows to be false in the form of a narrative unless so ordered by the tribunal. If a lawyer, the lawyer‘s client, or a witness called by the lawyer has offered material evidence and the lawyer comes to know of its falsity, the lawyer shall take reasonable remedial measures, including, if necessary, disclosure to the tribunal. A lawyer may refuse to offer evidence that the lawyer reasonably believes is false.”). In sum, the parties, who had the evidence that Wortley needed to substantiate his claims, blocked his access to it and deliberately prevented him from finding it. Wortley eventually obtained the emails from a different attorney as part of another lawsuit, but that does not diminish Wortley‘s due diligence or his adversaries‘ apparent malfeasance in the litigation that led to this appeal.

  • Tony

    It‘s unfortunate that sometimes the Judge‘s in the Bankruptcy Court, the lawyers that work that venue and sometimes even the US Trustees office can‘t seem to act fairly to all the parties in their cases and requires the Federal District Court to remind them that they are not above the law. Judge Ray should be censured by Congress immediately for allowing his judgment to be compromised and the lawyers involved should be ordered to show cause as to why they should be allowed to continue to practice before the Bankruptcy Court. Another black day for the legal profession in South Florida.

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