Case 24-00301-KRH Doc 58 Filed 04/07/25 Entered 04/07/25 15:34:14 Desc Main
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`UNITED STATES BANKRUPTCY COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`Richmond Division
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`In re: RECOVERY LAW GROUP, APC,
`D/B/A WAJDA LAW GROUP, APC,
`D/B/A WAJDA & ASSOCIATES, P.C.,
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`In re: TRISHA LYNN LINDERMAN,
`Debtor,
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`Case No. 24-301-KRH
`Miscellaneous Proceeding
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`Case No. 24-31714-KRH
`Chapter 7
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`Case No. 24-32478-KRH
`Chapter 7
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`Case No. 24-32957-KLP
`Chapter 7
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`Case No. 24-32962-KRH
`Chapter 7
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`Case No. 24-33369-KRH
`Chapter 7
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`In re: JEANNETTE LEVETAS PAULEY,
`Debtor,
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`In re: JOANN ELIZABETH RUSSELL,
`Debtor,
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`In re: SHAWN CORIGAN LEE,
`Debtor,
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`In re: JENNIFER REBECCA POULSTON,
`Debtor,
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`MEMORANDUM OPINION
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`These matters come before the Court upon a myriad of pleadings filed by the Office of the
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`United States Trustee (the “U.S. Trustee”) regarding the quality of the representation that was
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`received by the five consumer debtors in the above-captioned bankruptcy cases (the “Five
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`Consumer Bankruptcy Cases at Bar”). Each of the debtors was represented by Recovery Law
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`Group, APC d/b/a Wajda Law Group, APC d/b/a Wajda & Associates, P.C. (“RLG”) and Thomas
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`Watson, Esquire (“Watson”). In the Five Consumer Bankruptcy Cases at Bar, much like those
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`that were before the court in the Western District of Virginia in Robbins v. Barbour, a
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`“multi-jurisdictional practice” unleashed a gallimaufry of unethical issues upon hapless clients
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`utilizing “the ‘national law firm’ business model, where law firms in distant locations around the
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`country advertise on the internet, and then seek to retain a local attorney to become a local
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`‘member’—albeit one with limited, if any, rights other than in the cases they actually take.”
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`Robbins v. Barbour (In re Futreal), Nos. 15-70886, 15-70885, 16-60736, 16-61448, 16-61249,
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`16-00701, 2016 Bankr. LEXIS 3974, at *40-42 (Bankr. W.D. Va. Nov. 15, 2016) (not reported on
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`Westlaw).
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`RLG is such a multi-jurisdictional practice. In the Five Consumer Bankruptcy Cases at
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`Bar, RLG actually “acknowledge[d] that its clients were not adequately represented.” Resp. to
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`Recommendation of the U.S. Trustee as to Monetary Sanctions ¶ 1, In re Recovery Law Grp.,
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`Misc. Pro. No. 24-301-KRH, ECF No. 41 at 2. RLG admitted that it did not “provide appropriate
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`oversight of the performance of Watson in representing [RLG’s] clients.” Id. Nevertheless, RLG
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`tried to absolve itself of blame by pointing its finger at Watson. He was the local attorney RLG
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`engaged to represent the clients RLG had acquired on the internet. For the reasons set forth herein,
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`RLG and Watson share joint responsibility for the transgressions that occurred in these cases. Both
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`“demonstrated an utter disregard” for the consumer debtors they had the honor and the privilege
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`to represent. In re Banner, No. 15-31761, 2016 WL 3251886, at *9, 2016 Bankr. LEXIS 2214, at
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`*29 (Bankr. W.D.N.C. June 2, 2016).
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`Jurisdiction
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`This Court has jurisdiction over this matter pursuant to 11 U.S.C. § 105 and 28 U.S.C.
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`§§ 151, 157(a), and 1334(a). Venue is proper pursuant to 28 U.S.C. § 1409. This matter is a core
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`proceeding within the meaning of 28 U.S.C. § 157(b)(2). This Memorandum Opinion constitutes
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`2
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`the Court’s findings of fact and conclusions of law in accordance with Rule 7052 of the Federal
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`Rules of Bankruptcy Procedure.1
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`1.
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`The Parties
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`Findings of Fact
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`RLG is a multi-jurisdictional law firm. It operates in over thirty states and in approximately
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`ninety jurisdictions. Watson is an attorney licensed to practice law in the Commonwealth of
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`Virginia. He is admitted as a member of the bar of this Court. Watson was employed by RLG.2
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`Together they appeared on behalf of and purported to provide legal representation for the five
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`consumer debtors in the Five Consumer Bankruptcy Cases at Bar (collectively, the “Affected
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`Debtors”). In December 2024, Michael Sandler, an attorney licensed to practice in Virginia and a
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`member of this Court, intervened in the Five Consumer Bankruptcy Cases at Bar, filing a notice
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`of appearance on behalf of the Affected Debtors.3 Watson has not requested or nor has he received
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`1 Findings of fact shall be construed as conclusions of law and conclusions of law shall be construed as findings of
`fact when appropriate. See Fed. R. Bankr. P. 7052.
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`2 The evidence concerning the existing relationship between RLG and Watson was somewhat muddled. On
`September 11, 2024, RLG, through its general counsel, Peter Mulcahy (“Mulcahy”), advised that Watson’s
`employment with RLG had been terminated. Clearly, as the facts bear out, he was not terminated. Watson, on
`the other hand, testified that he had not been employed by RLG, but rather, that he was acting as a local contractor
`for RLG. Lee Ex. 105 7:17-19.
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`The distinction is important. If Watson was acting as an independent contractor, RLG and Watson would have
`been engaged in a fee-sharing arrangement. Any such an arrangement had to be disclosed on the Disclosure of
`Compensation form required by Rule 2016 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy
`Rules”). No such disclosure was ever made. Accordingly, the Court finds that Watson was an employee of RLG
`and that his employment was not terminated on September 11, 2024.
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`3 The findings of fact and conclusions of law relate solely to RLG and Watson, as more fully detailed herein, and
`do not relate to Mr. Sandler’s conduct. The Court welcomed Mr. Sandler’s appearance in these cases and has
`been pleased with Mr. Sandler’s representation of the Affected Debtors. Mr. Sandler has provided every
`document requested by the U.S. Trustee, has spoken with each Affected Debtor about the status of their respective
`cases, has filed all the necessary amendments to the deficient Court filings, and has successfully shepherded the
`Affected Debtors through to conclude their cases. See Hr’g Tr. 3:8-4:5, ECF No. 55.
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`3
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`leave to withdraw as counsel of record for the Affected Debtors, although he no longer appears to
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`represent them.
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`2.
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`RLG’s Business Model
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`RLG acquires its clients on the internet. The banner displayed across its professionally
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`designed website advertises “immediate access to legal advice to eliminate your debt.” Recovery
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`Law Group, http://www.recoverylawgroup.com/ (last visited Apr. 4, 2025), archived at
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`https://perma.cc/C4RX-BX7W.4 A prospective client contacting RLG initially communicates
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`with a bankruptcy attorney who answers general bankruptcy questions. That RLG attorney is not
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`necessarily based in the jurisdiction where the prospective client is located.5 After a client agrees
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`to the engagement, RLG prepares a draft bankruptcy petition that it transmits by email to the new
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`client. See Lee Ex. 113; Poulston Ex. 117; Russell Ex. 120; Linderman Ex. 136. RLG instructs
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`the new client to “[p]rint the signature pages attached to this email. Hand-sign all of the pages in
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`th[e] document but DO NOT DATE them.” Lee Ex. 113; Poulston Ex. 117; Russell Ex. 120;
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`Linderman Ex. 136. RLG then instructs the new client to mail the executed signature pages back
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`to RLG through the United States Postal Service. Global Ex. J.
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`Having procured the client’s signature on the signature pages in this manner, the client is
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`then instructed to review the draft bankruptcy petition and accompanying schedules and statement
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`of financial affairs and “indicate changes that need to be made.” Lee Ex. 113; Poulston Ex. 117;
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`Russell Ex. 120; Linderman Ex. 136. The cover email includes links to several videos “to walk
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`4 The website touts the firm’s “convenience, simplicity, and affordability,” claiming “[w]e are always on your side
`and ready to provide the legal support you need.” See Recovery Law Group, http://www.recoverylawgroup.com/
`(last visited Apr. 4, 2025), archived at https://perma.cc/C4RX-BX7W. That was far from the experience afforded
`the Affected Debtors.
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`5 RLG claims that it has or is now implementing a different process in Maryland, South Carolina, Central District
`of Illinois, and Michigan.
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`4
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`you through a Bankruptcy Petition.” Lee Ex. 113; Poulston Ex. 117; Russell Ex. 120; Linderman
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`Ex. 136. No lawyer meets with the new clients to review the draft bankruptcy documents with
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`them. This process for reviewing the bankruptcy petition, the schedules, and the statements was
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`utilized in all Five of the Consumer Bankruptcy Cases at Bar.
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`“Courts have criticized similar business models for ‘foster[ing] an environment of
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`confusion, incompetence, and apathy.’” Townson v. Sheppard (In re Gibson), 658 B.R. 706, 730
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`(Bankr. S.D. Ga. 2024) (quoting In re Deighan Law LLC, 637 B.R. 888, 921 (Bankr. M.D. Ala.
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`2022), amended, MC 19-301-CLH, 2023 WL 8924747, 2023 Bankr. LEXIS 3049 (Bankr. M.D.
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`Ala. Dec. 8, 2023)). RLG has been sanctioned by numerous courts around the country for
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`employing this business model. E.g., In re White, 659 B.R. 68, 71 (Bankr. D.S.C. 2024) (imposing
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`civil penalty of $10,000 where debtor had engaged RLG to save home and case was not filed until
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`after foreclosure); In re Gibson, 658 B.R. 706 (sanctioning RLG and contract attorney for, among
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`other things, unauthorized practice of law, failure to disclose in accordance with section 329(a)
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`and Bankruptcy Rule 2016, and making false statements in violation of section 707(b)(4)(C) and
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`Bankruptcy Rule 9011); In re Thomas, 657 B.R. 613, 631 (Bankr. C.D. Ill. 2024) (denying
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`application for compensation
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`in full where documents contained obvious errors and
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`inconsistencies, which “could easily have been promptly cured if not avoided altogether had [the
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`RLG attorney] simply taken the time to give the case the necessary attention.”); In re Burnett, No.
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`21-02018-dd, 2022 WL 802586, 2022 Bankr. LEXIS 684 (Bankr. D.S.C. Mar. 16, 2022) (imposing
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`a civil penalty of $25,000 and enjoining RLG from filing future cases in the District of South
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`Carolina); In re Green, Case No. 20-03190-HB, 2021 WL 5177427, 2021 Bankr. LEXIS 3059
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`(Bankr. D.S.C. Nov. 3, 2021) (imposing sanctions for violating section 526(a)(1), (2), and (3)(A),
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`failing to satisfy its obligations under section 528, failing to disclose in accordance with section
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`5
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`329, and for charging unreasonable compensation); In re Pearson, Case No. 20-30077, 2020 WL
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`1845048, 2020 Bankr. LEXIS 972 (Bankr. N.D. Tex. Apr. 9, 2020) (issuing a show cause based
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`on RLG’s “woefully erroneous bankruptcy paperwork” and “a nonsensical plan.”).
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`Similar proceedings were initiated against RLG (but not Watson) in the United States
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`Bankruptcy Court for the Western District of Virginia (the “Western District Proceeding”). See
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`Global Ex. 101. The Western District Proceeding resulted with the entry of a stipulation between
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`RLG and the Office of the U.S. Trustee6 (the “Western District Stipulation”), which was approved
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`by Judge Black on June 17, 2021.7 Global Ex. 101; Joint Stipulation of the U.S. Trustee with RLG
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`¶ 5, In re Recovery Law Grp., Misc. Pro. No. 24-301-KRH, ECF No. 42 [hereinafter the “MP
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`Stipulation”]. The Western District Stipulation required RLG to “immediately take all actions
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`necessary and appropriate to obtain a Certificate of Registration from the Virginia State Bar.”
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`Global Ex. 101 ¶ B. Judge Black ordered that all fees paid by the debtors be refunded, and he
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`imposed a civil penalty in the amount of $4,000. Global Ex. 101 ¶¶ 2, 5.
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`The Office of the U.S. Trustee and RLG subsequently agreed to a second stipulation, which
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`was also approved by Judge Black. Global Ex. 102; MP Stip. ¶ 6. RLG agreed as part of the
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`second stipulation to cease practicing bankruptcy law in the Western District of Virginia. Global
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`6 The Office of the U.S. Trustee is a part of the Department of Justice. The Attorney General appoints a U.S. Trustee
`for each of the various regions established by Congress around the country. 28 U.S.C. § 581. The duties of the
`U.S. Trustee are set forth in 28 U.S.C. § 586. The U.S. Trustee has a right to appear and be heard in all bankruptcy
`cases. 11 U.S.C. § 307.
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`7
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`Judge Black consolidated the contested matters pending in three separate bankruptcy cases. Agreed Order to
`Consolidate Adversary Proceedings, In re Adkins, Case No. 20-71043-PMB (Bankr. W.D. Va. Apr. 28, 2021),
`ECF No. 34; In re Stottlemyer, Case No. 20-50669-RBC (Bankr. W.D. Va. Apr. 28, 2021), ECF No. 30; In re
`Wagner, Case No. 20-61629-RBC (Bankr. W.D. Va. Apr. 28, 2021), ECF No. 19. Identical stipulations were
`entered in each of the three cases. Stipulation of Wajda Law Group, APC & Order Resolving Mots. Filed by the
`U.S. Trustee to Review & Impose Civil Penalties, In re Adkins, Case No. 20-71043-PMB (Bankr. W.D. Va. Apr.
`28, 2021), ECF No. 50; In re Stottlemyer, Case No. 20-50669-RBC (Bankr. W.D. Va. Jun. 17, 2021), ECF No.
`31; In re Wagner, Case No. 20-61629-RBC (Bankr. W.D. Va. Jun. 17, 2021), ECF No. 20. For ease of reference,
`citations to the Western District Stipulation will reference the stipulation entered in In re Adkins, Case No.
`20-71043-PMB only, which was marked and admitted as Global Ex. 101 before this Court.
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`6
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`Ex. 102 ¶ (i). RLG further agreed to a one-year bar from practice. Global Ex. 102 ¶ (iv). If RLG
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`wished to resume practice in the Western District after the expiration of the one-year bar, RLG
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`agreed to file a motion with the Court “after providing 60 days’ notice prior to the filing of said
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`motion to the Office of the United States Trustee, and demonstrate it is in complete compliance
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`with [the Western District Stipulation].” Id.
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`3.
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`The Sorgho Case
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`On October 11, 2023, RLG, by and through Watson, filed a voluntary Chapter 7 petition
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`on behalf of Djibril Sorgho in this Court. In re Sorgho, Case No. 23-33495-KLP, ECF No. 1 (the
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`“Sorgho Case”). The petition date in the Sorgho Case preceded the commencement of the Five
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`Consumer Bankruptcy Cases at Bar. The Office of the U.S. Trustee filed a Motion to Examine
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`Debtor’s Transactions with Wajda & Associates, P.C., Wajda Law, the Recovery Law Group, and
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`Thomas Watson, Esquire, and for Return of Attorney’s Fees, and Imposition of Sanctions and
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`§ 526(c) Remedies (the “Sorgho 329 Motion”) in the Sorgho Case on April 17, 2024. MP Stip.
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`¶ 7; Global Ex. 103. On May 9, 2024, Watson, acting on his own behalf and as counsel for RLG,
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`filed an answer to the Sorgho 329 Motion. MP Stip. ¶ 8; Global Ex. 104. The issues raised in the
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`Sorgho 329 Motion were resolved by the agreement of Watson and RLG to the terms of a proposed
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`consent order. MP Stip. ¶¶ 9-10; Global Exs. 105 & 106. On May 21, 2024, Judge Phillips entered
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`the consent order (the “Sorgho Consent Order”). Global Ex. 107.
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`The Sorgho Consent Order required RLG to refund $2,350 in fees to Mr. Sorgho. Global
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`Ex. 107 ¶ 1. It also required RLG to pay a sanction in the amount of $500 to Mr. Sorgho.8 Id. ¶ 2.
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`The Sorgho Consent Order further provided that
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`Recovery Law Group shall not file any bankruptcy cases in [the]
`Bankruptcy Court for the Eastern District of Virginia until and
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`8 RLG made such payments to Mr. Sorgho. See MP Stip. ¶ 15;Global Ex. 111.
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`7
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`unless Debtor’s Counsel complies with § 54.1-3902 of the Code of
`Virginia and Part Six, Section IV, Paragraph 14 of the Rules of the
`Supreme Court of Virginia and actually receives a Certificate of
`Registration from the Virginia State Bar.
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`Id. ¶ 3 (emphasis added). The Sorgho Consent Order was endorsed by Watson on behalf of RLG,
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`as well as on his own behalf. Id. at 3. The Sorgho Consent Order is now a final and unappealable
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`order. See generally In re Sorgho, Case No. 23-33495-KLP.
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`Notwithstanding that RLG had agreed to “immediately take all actions necessary and
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`appropriate to obtain a Certificate of Registration from the Virginia State Bar,” Global Ex. 101
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`¶ B, it was not until almost three years later that RLG submitted an Application for Certificate of
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`Registration for Professional Law Corporation to the Virginia State Bar (the “VSB”). Global Ex.
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`110. On September 13, 2024, RLG submitted a second such application to the VSB. Id. At the
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`Trial9 of the Five Consumer Bankruptcy Cases at Bar, Mulcahy testified that RLG had finally
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`received the certificate of registration from the VSB. Mulcahy could not provide the date of its
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`receipt nor did RLG seek to admit a copy of the certificate into evidence. See Jan. 21, 2025, Hr’g
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`Tr. 33:23-34:16, 42:22-43:3. RLG had the burden of proving at Trial that it had “actually
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`receive[d] a Certificate of Registration from the Virginia State Bar.” The best evidence the Court
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`has is the records of the VSB, which revealed that RLG was not registered with the VSB as of
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`October 24, 2024. Global Ex. 110.
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`Although it lacked the requisite certificate of registration with the VSB, RLG, through
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`Watson, proceeded to file five Chapter 7 consumer bankruptcy cases in contravention of the
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`Sorgho Consent Order: (1) Richard Gilliam Seeley, Jr. (“Mr. Seeley”)10 filed on June 20, 2024,
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`9 As hereinafter defined, see infra p. 63.
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`10 Mr. Seeley’s case was not included in the miscellaneous preceding nor was it one of the Five Consumer
`Bankruptcy Cases at Bar.
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`8
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`Global Ex. 112; (2) Jeannette Levetas Pauley (“Ms. Pauley”) filed on July 3, 2024, Global Ex.
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`113; (3) JoAnn Elizabeth Russell (“Ms. Russell”) filed on August 9, 2024, Global Ex. 114;
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`(4) Shawn Corigan Lee (“Mr. Lee”) also filed on August 9, 2024, Global Ex. 115; and (5) Jennifer
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`Rebecca Poulston (“Ms. Poulston”) filed on September 9, 2024, Global Ex. 116. RLG
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`acknowledged that it had not received the required certificate of registration from the VSB when
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`it filed each of these cases. MP Stip. ¶¶ 18, 21, 26, 30. The Court finds in each instant that the
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`filing of these five cases violated the Sorgho Consent Order.
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`4.
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`The Five Consumer Bankruptcy Cases at Bar
`A.
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`The Linderman Case, Case No. 24-31714-KRH
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`On January 26, 2024, Trisha Linderman (“Ms. Linderman”) and RLG, by and through
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`Nicholas Wajda (“Wajda”),11 entered into a Chapter 7 Retainer Agreement (the “Linderman
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`Retainer Agreement”). Linderman Ex. 135. Under the terms of the Linderman Retainer
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`Agreement, RLG, among other things, agreed to:
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`4. Review with the Client and sign the completed petition,
`statements, and schedules, as well as all amendments thereto,
`whether filed with the petition or later.
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`5. Timely prepare and file the Client’s petition, statements, and
`schedules after receipt of all necessary documentation and
`payments from the Client.
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`*****
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`3. Provide knowledgeable legal representation for the Client at the
`§ 341(a) meeting of creditors and with regard to motion and/or
`any motion hearing during the case.
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`11 Wajda is the managing partner of RLG. Global Ex. E at ¶ 4 & Ex. 2. He is not admitted to practice before this
`Court. Wajda is admitted to practice in California and Nevada. Id. The Court received no evidence regarding
`Wajda’s admission status in the Commonwealth of Virginia and, therefore, it declines to consider the propriety
`of Wajda’s execution of a retainer agreement regarding a legal engagement in Virginia.
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`*****
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`9
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`6. Timely respond to trustee inquiries, including those by the
`United States Trustee’s office.
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`7. Timely prepare, file, and serve any necessary amended
`statements and schedules and any change of address, in
`accordance with information provided by the Client.
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`8. Be available to respond to the Client’s questions throughout the
`term of the case.
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`9. Prepare, file, and serve timely modifications or amendments to
`the petition, schedules or statements, when necessary.
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`*****
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`14. Provide any other legal services necessary for the administration
`of this case before the bankruptcy court.
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`Linderman Ex. 135. In exchange for the services RLG agreed to provide, Ms. Linderman agreed
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`to pay RLG $1,950.00, inclusive of the applicable filing fee, prior to the filing of her case. Id. Ms.
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`Linderman paid the entire fee in the amount of $1,950.00 to RLG on January 26, 2024. Linderman
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`329 Motion ¶ 15.12
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`On January 29, 2024, RLG sent a draft bankruptcy petition, draft schedules, and a draft
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`statement of financial affairs to Ms. Linderman by email. Linderman Ex. 136. The email
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`instructed Ms. Linderman to first manually sign, but not date, all provided signature pages.
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`Linderman Ex. 136. Following execution of the signature pages, Ms. Linderman was then
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`instructed to review the draft documents that RLG had provided and to indicate any necessary
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`changes. Linderman Ex. 136.
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`12 The “Linderman 329 Motion” refers to the Motion to Examine Debtor’s Transactions with Thomas Watson,
`Esquire, Recovery Law Group, APC, and Wajda Law Group, APC, for Return of Attorney’s Fees, and Imposition
`of Sanctions [In re Recovery Law Grp., Misc. Pro. No. 24-301-KRH, ECF No. 22].
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`10
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`

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`On May 2, 2024 (the “Linderman Petition Date”),13 RLG filed a voluntary petition (the
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`“Linderman Petition”) under Chapter 7 of the Bankruptcy Code on behalf of Ms. Linderman.
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`Linderman Ex. 123. Part 7 of the Linderman Petition reflects an electronic signature by Ms.
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`Linderman and an electronic signature by Watson as an attorney with “Recovery Law
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`Group/Wajda Law,” 309 W. 11th Street, Anderson, Indiana 46016. Id.
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`With the Linderman Petition, Watson filed (i) a summary of assets, liabilities and certain
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`statistical information, (ii) schedules A-J, along with a declaration (collectively, the “Linderman
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`Schedules”), (iii) a statement of financial affairs (the “Linderman SOFA”), (iv) a statement of
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`intention (the “Linderman SOI”), (v) a Chapter 7 statement of current monthly income (the
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`“Linderman Form 122A-1”), and (vi) a disclosure of compensation (the “Linderman 2016
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`Disclosure”).14 Id. Watson signed the Linderman 2016 Disclosure, which stated in part that he
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`agreed to provide the following services: (a) analysis of Ms. Linderman’s financial situation, and
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`rendering advice to Ms. Linderman in determining whether to file a petition in bankruptcy;
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`(b) preparation and filing of any petition, schedules, statement of affairs and plan which may be
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`required; and (c) representation of Ms. Linderman at the meeting of creditors and any adjourned
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`meetings thereof. Id.
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`The documents filed by Mr. Watson and RLG disclose the following:
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`(cid:237) As of the Linderman Petition Date, Ms. Linderman had been
`employed with NCR/Voyix for one year and her gross monthly
`income was $2,907.22. Id.
`
`(cid:237) Ms Linderman had income of (i) $7,962.14 for the period of
`time between January 2024 and the Linderman Petition Date;
`
`
`13 This petition date occurred prior to entry of the Sorgho Consent Order.
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`14 Bankruptcy Rule 1007(b) requires that these documents be filed in all Chapter 7 bankruptcy cases as prescribed
`on the Official Forms within the time limits set forth in Bankruptcy Rule 1007(c).
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`11
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`(ii) $37,510.51 for calendar year 2023; and (iii) $18,632.00 for
`calendar year 2022. Id.
`
`(cid:237) Contrary to the income reported on the Linderman Schedules
`and the Linderman SOFA, the Linderman Form 122A-1
`reflected that the Debtor had no earnings in the six months prior
`to filing Chapter 7. Id.
`
`
`
`
`
`(cid:237) The Linderman SOFA disclosed that Ms. Linderman had paid
`$1,950 to RLG, id., in accordance with the terms of the
`Linderman Retainer Agreement, Linderman Ex. 135. However,
`the Linderman 2016 Disclosure stated that Ms. Linderman had
`paid only $1,850 to RLG. Linderman Ex. 123.
`
`On May 3, 2024, the Court docketed a Notice of Debtors Prior Filings, indicating that
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`Ms. Linderman had previously filed a Chapter 13 case in the Western District of Oklahoma, Case
`
`No. 18-13735, on August 31, 2018, and that she received a discharge in that case on November
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`19, 2021 (the “Oklahoma Case”). See Docket, In re Linderman, Case No. 24-31714-KRH. On
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`May 5, 2024, the Clerk’s Office issued a Notice that Debtor is Ineligible for Discharge (the
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`“Ineligibility Notice”), noting that it appeared that Ms. Linderman was not eligible to receive a
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`discharge pursuant to sections 727(a)(8), 727(a)(9), or 1328(f) of the Bankruptcy Code.
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`Linderman Ex. 127. The Ineligibility Notice required any “[o]bjections contesting the record [to]
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`be filed with the Clerk of the U.S. Bankruptcy Court within twenty-one (21) days from the date of
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`this notice.” i.e., no later than May 24, 2024. Id.
`
`While a Chapter 13 bankruptcy case was filed in Oklahoma using Ms. Linderman’s social
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`security number, a cursory review of the Oklahoma Case would reveal that the Oklahoma Case
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`was filed by another individual – not Ms. Linderman. This information was readily available and
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`actually known by her counsel, see Linderman Ex. 101 at 5:1-15, but was not brought to the
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`attention of the Court. Watson and RLG owed a duty to Ms. Linderman to respond to the
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`Ineligibility Notice. They did not. Having received no response or objection to the Ineligibility
`
`12
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`Notice, the Court entered an Order (the “Ineligibility Order”) on May 29, 2024, finding
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`Ms. Linderman to be ineligible for a discharge and ordering the Clerk to not enter a discharge in
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`Ms. Linderman’s bankruptcy case. Linderman Ex. 128.
`
`On June 11, 2024, the Chapter 7 Trustee assigned to Ms. Linderman’s bankruptcy case,
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`Jennifer West (“Ms. West”), convened the meeting of creditors required pursuant to 11 U.S.C.
`
`§ 341 utilizing a Zoom platform. (the “First Linderman Meeting of Creditors”). Linderman Ex.
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`101. Ms. Linderman and Watson appeared at the First Linderman Meeting of Creditors.
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`Linderman Ex. 101 at 3:1-14. Ms. Linderman testified that she had only had one phone
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`conversation with Watson prior to the First Linderman Meeting of Creditors. Id. 11:13-16.
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`Ms. Linderman testified that during that single phone conversation she and Watson did not discuss
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`the bankruptcy documents that RLG had drafted and filed for her. Id. 11:10-20. Ms. Linderman
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`testified that, after executing the signature pages as instructed, she had reviewed the bankruptcy
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`documents that RLG had drafted for her all by herself. Id. 11:1-9. Ms. Linderman stated that she
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`was confused by the draft bankruptcy documents. Id. 11:1-5; 12:22-13:7. She expressed concern
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`to the Chapter 7 Trustee that she may have missed something. Id. 12:8-25.
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`During the First Linderman Meeting of Creditors, the U.S. Trustee informed Watson twice
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`that he would need to address the Ineligibility Order so that Ms. Linderman could receive her
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`discharge. Id. 8:2-12; 14:7-9. Because the initial meeting of creditors was conducted within
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`fourteen days of entry of the Ineligibility Order, Watson could have timely moved for
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`reconsideration under the more relaxed standard of Bankruptcy Rule 9023. He failed to do so.
`
`13
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`The U.S. Trustee also informed Watson that he would need to amend the Linderman Form
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`122A-1 to accurately reflect Ms. Linderman’s income.15 Id. 9:1-14. The Chapter 7 Trustee
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`advised Watson that the Linderman SOI was blank and would need to be amended. Id. 14:23-25.
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`The Chapter 7 Trustee also advised Watson that she still required certain documentation to
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`conclude her review of Ms. Linderman’s case.16 Id. 15:2-5.
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`Although Watson did file an amended Form 122A-1 on behalf of Ms. Linderman,
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`Linderman Ex. 124, Watson failed to provide the requested documentation to the Chapter 7
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`Trustee. He also failed to file an amended statement of intention. The Chapter 7 Trustee contacted
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`Watson about these deficiencies on May 7, June 11, July 10, August 7, August 21, August 27,
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`September 14, September 18, October 7, October 15, October 17, and October 23, 2024.
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`Linderman 329 Motion ¶ 29. The U.S. Trustee also sent follow-up email reminders to Watson
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`about the need to correct the deficiencies on June 17, July 5, July 22, August 5, August 8,
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`September 19, October 7, October 22, and November 1, 2024. Linderman Exs. 113-121. Because
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`Watson and RLG failed to timely address the outstanding issues, Ms. Linderman’s meeting of
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`creditors had to be adjourned a total of nine times. Linderman Ex. 134 6:7-8.
`
`15
`
`
`MS. PECORARO: [O]ne of your forms was filled out and it looks like it may not
`be complete. . . . Mr. Watson, if you’re able to amend that means test and correct
`it.
`
`MR. WATSON: I will do that. I apologize. I’ve had some issues with our
`software. I could leave it at that.
`
`
`
`Linderman Ex. 101 9:1-14.
`
`16 The documents that were requested from Ms. Linderman were documents that are routinely required to be
`produced in every Chapter 7 bankruptcy case under the provisions of section 521 of the Bankruptcy Code and
`Bankruptcy Rule 4002. Watson should have collected the documentation prior to the Linderman Petition Date
`and should have provided the documentation to the Chapter 7 Trustee for review prior to the First Linderman
`Meeting of Creditors.
`
`14
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`

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`On August 13, 2024, the Chapter 7 Trustee convened one of the adjourned § 341 meetings
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`(the “August 13 Adjourned Meeting”) at which Ms. Linderman and Watson appeared. Linderman
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`Ex. 102 2:2-3. Ms. Linderman testified that she had provided all of the requested documents to
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`Watson. Id. 4:8-23. Watson stated that he thought he had provided all of the documents to the
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`Chapter 7 Trustee or had tried to load them into the system. Id. 2:7-12. Ms. Linderman further
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`testified that she could not get a response from Watson or RLG about the status of the Ineligibility
`
`Order.17
`
`After the conclusion of the August 13 Adjourned Meeting, Watson emailed the U.S.
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`Trustee on August 16, 2024, requesting help in contacting the Office of the U.S. Trustee in
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`Oklahoma about the Oklahoma Case. Linderman Ex. 103. On August 19, 2024, the U.S. Trustee
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`responded to Watson, “[a]s I told you at the [First Linderman Meeting of Creditors], our office has
`
`reached out to the Oklahoma office. You need to do something in this Court as indicated on the
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`notice docketed in the case.” Id.
`
`
`17 The transcript from the August 13 Adjourned Meeting provides the following exchange:
`
`MS. LINDERMAN: Can I just say something?
`
`MS. WEST: Yes, go ahead.
`
`MS. LINDERMAN: Every time we ask about the social it’s a follow-up, it’s a
`follow-up. What is going on? Because to my knowledge I was supposed to be
`discharged August 12th.
`
`MS. WEST: Okay. So, you haven’t gotten any answers from your counsel either?
`
`MS. LINDERMAN: No.
`
`MS. WEST: Okay.
`
`M