Case Type:
Case Status:
22-1128 (9th Circuit, Oct 20,2023) Not Published
The U.S. Bankruptcy Appellate Panel of the Ninth Circuit (BAP) affirmed the findings of the U.S. Bankruptcy Court for the Central District of California (BC) that Michael Eugene Reznick (RZ), an attorney, had knowingly filed a chapter 11 petition on behalf of DA & AR Hospice Care, Inc. (Hospice) with neither authorization or retention and referring him to a disciplinary panel for fraud on the court and a violation of Bankruptcy Rule 9011, not only rejecting his one substantive claim-that the Hospice's director had authorized him to file-as meritless-but also his every other, many irrelevant.
Procedural context:
In December 2021, Hospice filed a skeletal bankruptcy petition under chapter 11 subchapter V. RZ signed the petition as the Hospice’s attorney; Dr. Yvette Hargrove-Brown (HB) signed the petition on behalf of the Hospice, purportedly as its president. Because the Hospice did not file the required schedules and documents by the deadline, the BC ordered the Hospice to file the missing documents by January 19, 2022 or face dismissal. Prior to this deadline, RZ and HB appeared at the § 341(a) meeting of creditors on behalf of the Hospice, during which RZ admitted he had not filed a list of related cases or submit information required by the U.S. Trustee and HB could not answer basic questions about Hospice, having only recently been appointed as the CEO/president of Hospice and its affiliated company, NobleQuest Health Foundation, Inc. (NobleQuest). On January 25, the BC dismissed Hospice's case when none of the required documents had been filed by its January 19 deadline. The U.S. Trustee then filed an application for issuance of an order to show cause (OSC Application) directing RZ and HB should not be sanctioned. The BC granted the OSC Application and issued the order to show cause (OSC). After a hearing, and further briefing, the BC issued a memorandum opinion finding that RZ had committed fraud on the court and referring him to the BC's disciplinary panel. RZ timely appealed the OSC order. ("Later, a three-judge disciplinary panel issued its memorandum decision and agreed with the bankruptcy court that Mr. Reznick had committed fraud upon the bankruptcy court and had violated Rule 9011.").
In October 2021, the Hospice, joined by others and represented by RZ, sued Ailene Rivera, once an officer who sat on the boards of directors of the Hospice and iNobleQuest, for fraud and embezzlement in the Los Angeles superior court. In early December 2021, RZ filed a chapter 11 petition on behalf of NobleQuest. The bankruptcy case was dismissed later that month for the debtor’s failure to file schedules and other documents. That same month, Hospice tendered its own chapter 11 petition.
Robert J. Faris; William J. Lafferty III; and Frederick P. Corbit

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