“STUPID BANKRUPTCY LAWYER TRICKS” -An Unauthorized Settlement
(The Bankruptcy Litigation Blog; Steve Jakubowsky; Coleman Law Firm.)

Facing overwhelming evidence that the creditor’s attorney was not authorized to enter into a settlement, (including said attorney’s own affidavit, pleadings and depositions) the debtor nevertheless mounted a vigorous, eighteen month frenzied campaign in an effort to cram down a settlement that had never been confirmed. The debtor also filed for several adjournments during the Unauthorized Settlement phase of their chapter 11 bankruptcy, thus delaying a decision, so that the debtor could continue to occupy the property without paying for it. Obviously, this was a covertly conspired diversion that was very much to the debtor’s advantage.

An Inconvenient Truth

At a hearing held on July 20, 2005 Gerald Orseck, attorney purporting to represent the creditor, Helen-May Holding’s, LLC (Irene Griffin & husband, Paul Griffin) was conveniently, and suspiciously “compromised” when Orseck made an unauthorized settlement with debtor/alter ego, Kolel Mateh Efraim. With due deliberation and malice of forethought, he had falsely advised his own clients that this hearing would be adjourned, and so The Griffins were not present in court while he conducted his stealthy betrayal. Also convenient, is the fact that the debtors and all of their witnesses were not likewise advised of any adjournment and so curiously, they were all present in court for this manipulation of due process. The transcript demonstrates that although only scheduled for a hearing on the issues of adequate protection, and lifting the bankruptcy stay, the debtors however, seized upon the opportunity presented by the absence of the creditor to “cram-down” this covertly conspired settlement. The debtors and their witnesses actively participated in the proceedings while HMH (The Griffins) were denied reciprocity. Subsequently, a trial was held and the court ruled that Gerald Orseck “had lied” to his clients and to the court, and that he had, in fact entered into an unauthorized settlement with the debtor. This distraction from the issues of the debtor’s bankruptcy amounted to an eighteen month diversion, followed by a further delay with an appeal of the decision, and subsequent adjournments. All of this served to deny The Griffins access to, or income from their property, while depleting any resources they might have had, and thus moving them nearer to a default on their mortgage debt. Obviously, the debtor’s best interests were well served, while the entire process was completely avoidable!

It has since been discovered that Orseck has a history of not representing his client’s best interests, and one can only wonder at the “quid pro quo” that took place between Orseck, the debtors, and their attorneys, Backenroth, Frankle and Krinsky, LLP. Subsequently, The Griffins gave Orseck every opportunity to “correct his mistake,” however, that failing…he was fired! Preceding his own pre-trial deposition, Gerald Orseck had contacted the principals of HMH and their attorneys, suggesting that they meet so that they could “agree” on his own testimony. He was immediately and flatly rebuffed. During a recess at his own deposition, Orseck actually approached the principals of HMH (The Griffins), and asked them, how they would like for him to testify! He stated, “That’s why I wanted to get together with you.” (Pangs of guilt or remorse for an unauthorized settlement?) The answer was an emphatic: “just tell the truth!” HMH (The Griffins) immediately discontinued any further conversation. As an officer of the court, Gerald Orseck failed to recognize what was patently obvious to HMH (The Griffins): that it was totally “inappropriate” if not outright illegal for him to approach his former clients and current adversaries in such a manner. The Griffins have filed a complaint against Gerald Orseck with the New York State Bar Association’s Third Judicial District and Standards Of Professional Conduct. Gerald Orseck has yet to be held accountable for this gross breach of his legal and ethical duty as an officer of the court. A Verified Complaint was filed in Sullivan County Supreme Court, however we have not been successful in finding an attorney who will prosecute against a fellow attorney. So much for the legal profession policing its own!