Creditors of a personal bankruptcy law firm, Jacoby & Meyers Bankruptcy LLP, have forced the company into involuntary Chapter 7 bankruptcy. The firm had closed itself facing financial difficulties in December 2013. The firm formed a trust that would pay out the creditors of the firm. Legal Zoom, a legal document service company, is one of the creditors of the firm. Legal Zoom petitioned to have Jacoby & Meyers Bankruptcy file for bankruptcy because it said there was not enough â€œdisclosureâ€ or â€œtransparencyâ€ in the shutdown. Creditors, according to a May 21, 2014 Wall Street Journal article, also did not think the trust was doing enough for creditors.
Now that the case is in court, Jacoby & Meyers Bankruptcy corporate lawyers want the case brought by the debtors to be thrown out, and if that cannot be done, to change the venue of the case. Changing the venue means changing which court hears the case. The case is filled in the Southern District of New York. Instead, the firm wants the case moved to the Northern District of Illinois, which is where Chicago is, if the court will not throw it out altogether. The reason is that the firm was formed from two law firms, one of which was located in Chicago and that was where the Jacoby & Meyers Bankruptcy offices were. New York was only a satellite office. But, the creditors claim that the case should not be moved from one court to another. They note that â€œmarketing materialsâ€ indicate the firmâ€™s New York presence. Additionally, the firm, in its short existence, filed nearly 250 personal bankruptcies in Manhattan and Brooklyn.
In addition, some allege that the firm has broken down legal ethics rules because it did not provide proper information to its clients when it shut down. It will be noteworthy to see if the caseâ€™s venue is changed as there seems to be evidence for both arguments.
If you are in debt, whether from credit cards or medical bills, and are struggling to pay it back, bankruptcy is an option that you may wish to consider. A Chapter 7 bankruptcy is designed to help debtors by wiping away nearly all debt so that the debtor can get a fresh start. Jayson Lutzky is a Bronx, New York attorney with over 30 years of experience practicing law who handles personal bankruptcies. The lawyer offers free in person consultations. To set up an appointment, call 718-514-6619. Saturday appointments are available. Visit www.MyNewYorkCityLawyer.com for more information.