Real estate lawyer Kossoff cannot defend bankruptcy filings

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United States Bankruptcy Court for the Southern District of New York in Manhattan, New York. REUTERS / Andrew Kelly

  • Judge ruled that Mitchell Kossoff could not invoke the Fifth Amendment against a trustee
  • Kossoff is also under investigation

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(Reuters) – Manhattan Bankruptcy Judge again ordered real estate attorney Mitchell Kosoff, who is under criminal investigation for misuse of client funds, to cooperate with a chapter 7 proxy overseeing the liquidation of his law firm.

Chief U.S. bankruptcy judge David Jones said at a hearing on Thursday that Kossoff cannot claim his Fifth Amendment rights against self-incrimination because he is transferring corporate documents from his private firm, Kossoff PLLC, rather than personal records.

Jones rejected Kossoff’s criminal defense attorney Walter Mack of Doar Rieck Kaley & Mack’s argument that Kosoff and his law firm were indistinguishable.

“These statements cannot overcome the doctrine of collective education,” Jones said. He ordered Kosoff to hand over the documents requested by Al Togut, the bankruptcy attorney who controls the Kossoff PLLC estate as a Chapter 7 trustee.

Togut praised Jones’ decision in an email, saying it “dispels Mr. Kossoff’s claim that his Fifth Amendment privilege exempts him from his duty to cooperate with the trustee.”

Togut said he expects Kosoff to appear at his law firm’s creditors meeting, where Togut, as a trustee, will vet him.

Jones’ ruling came a month after he put Kossoff in charge of his real estate law firm, which was forced into bankruptcy by a group of creditors who said the firm had misappropriated more than $ 8 million in escrow.

Togut, represented by lawyers from his law firm Togut, Segal & Segal, has since complained that Kossoff is misusing the Fifth Amendment privilege to defend documents, accusing him of Submission of documents dated July 16 participation in ransom claims and procrastination tactics.

Mack argued during the hearing that the transfer of documents or the need to create them could violate Kossoff’s rights under the Fifth Amendment, as he faces possible criminal prosecution. He argued that, under his leadership, Kosoff could not complete an application for assistance from a pro bono attorney because it would require him to disclose his income.

Mack said the fight over the papers would end when Kossoff pleads guilty to potential charges the Manhattan District Attorney or the District Attorney’s Office drops the case. Mack pointed in Submission July 9 that the US attorney in Brooklyn is no longer investigating Kossoff, describing the Manhattan district attorney as “the only prosecutor leading a criminal investigation.”

“He wants to cooperate. Not that we were sitting and hiding documents. We are trying to keep him alive, and we are trying to keep him in a situation where his life can continue in a reasonable semblance, ”said Mac. during the hearing.

After the hearing, Mack declined to say if Kossoff would hand over the documents required by the Chapter 7 trustee. “Time will tell what we do,” he said in an email.

This is In re Kossoff PLLC, Bankruptcy Court for the Southern District of New York, No. 21-10699.

For Togut: Neil Berger, Brian Shaughnessy and Minta Nester from Togut, Segal & Segal

For Kossoff: Walter Mack of Doar Rieck Kaley & Mack

Read more:

Bankruptcy judge orders Kossoff to cooperate with trustee

Real estate lawyer Kossoff wrestles with trustee over records

The bankruptcy judge retains the authority of Kossoff’s subpoena.

Bankruptcy manager Kossoff warns of pending litigation

David Thomas

David Thomas talks about the legal business, including law firm strategy, hiring, mergers and litigation. He lives in Chicago. He can be reached at d.thomas@thomsonreuters.com and on Twitter @ DaveThomas5150.



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