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A bankruptcy judge in Texas raised the question of whether the findings of an investigation into Marble Ridge founder Dan Kamensky should be referred to federal prosecutors to determine whether the investment manager committed a crime, Bloomberg Law reported. At the end of a court hearing on Friday, U.S. Bankruptcy Judge David R. Jones asked lawyers for the Office of the U.S. Trustee, an arm of the Department of Justice that deals with bankruptcy matters, whether they had given the results of their probe into Kamensky to federal prosecutors. The Trustee’s office said on Wednesday that the hedge fund manager had improperly tried to stop another bidder from buying some of Neiman Marcus Group Inc.’s best assets in the department store’s bankruptcy case. When told by a lawyer for the Office of the U.S. Trustee that it wasn’t clear whether prosecutors are involved, Judge Jones said that he will set a further court hearing on the matter. Kamensky declined to comment.

In related news, Marble Ridge Capital LP, a hedge-fund firm known for investing in distressed companies, is shutting down after a government inquiry found that founder Dan Kamensky tried to suppress bidding for a piece of bankrupt retailer Neiman Marcus Group Ltd, WSJ Pro Bankruptcy reported. A spokesman for Marble Ridge said on Friday that it is “winding down.” The decision marks a stunning fall for Kamensky, who built a reputation sifting through the subprime mortgage meltdown, founded Marble Ridge in 2015 and grew it to a firm with roughly $1 billion in assets under management. Since 2018, Kamensky has waged a legal campaign against Neiman’s private-equity backers, helping snare a big settlement that became his undoing. On Wednesday, watchdogs from the Justice Department concluded that Kamensky had secretly coerced a major investment bank not to bid for shares in Neiman’s e-commerce business, MyTheresa, that are part of that deal. Read more.

A bankruptcy judge last week denied the chapter 7 petition filed by a pair of Spokane, Wash., doctors who lied about their finances, prompting the judge to rule that their “failure to provide accurate information was knowing and fraudulent,” the Spokane Spokesman-Review reported. Dr. Sajid Ravasia, a longtime psychiatrist at Providence Sacred Heart Medical Center, and Dr. Debra Ravasia, a gynecologist, originally filed for creditor protection in 2017 from about 8,000 former clients of Debra Ravasia’s failed businesses, Northwest Health Summit and Ajuva Spa. While it appeared the case had ended with a settlement in 2017, the U.S. Trustee’s Office objected to that settlement and the case proceeded to trial, which convened last month. Chief Bankruptcy Judge Frederick Corbit ruled against the Ravasias on Thursday, agreeing that acting U.S. Trustee Gregory Garvin proved by a preponderance of the evidence that the Ravasias lied about their incomes to avoid a restructuring plan that would have provided some payment to those people and companies that were owed money. Judge Corbit noted that the bankruptcy proceedings exist to allow an “honest debtor to discharge debts and to make a fresh start, free from the burden of past indebtedness,” he wrote. But Judge Corbit ruled that Garvin showed that the couple lied about both their incomes and expenses during the case. The $191 million bankruptcy was filed after Debra Ravasia shut down both of her businesses in 2016, which Sajid Ravasia apparently did not help manage. The couple’s actual debt was vastly lower than $191 million. Their first attorney, Dan O’Rourke, previously explained that they had arrived at the $191 million-figure by assigning a $20,000 value on each of the businesses’ 8,000 former clients. However, the couple nonetheless sought chapter 7 protection under the argument that their living expenses, which included paying staff to care for their lawn, swimming pool and cost of tuition to a private school for their children, far exceeded Debra Ravasia’s ability to pay because she was no longer employed or employable.

A disbarred Beverly Hills lawyer pleaded guilty today to a federal criminal charge for scheming to steal more than $500,000 from a client he represented in bankruptcy proceedings and then use part of the money to pay off a $75,000 debt, according to a Department of Justice press release. Alan F. Broidy pleaded guilty to a one-count information charging him with interstate transportation of stolen property. According to his plea agreement, Broidy was hired to represent GRL-Mesa Investments LLC, a Phoenix-based company that filed for chapter 11 protection in U.S. Bankruptcy Court in Los Angeles in December 2015. In August 2016, the bankruptcy case was resolved and dismissed. Broidy was directed by the court to hold $2,469,926 in a client trust account — funds derived from the sale of assets belonging to GRL-Mesa’s bankruptcy estate. This money was supposed to be distributed to Mesa’s creditors. Although he transferred a total of $1,937,400 of Mesa’s funds to its creditors, including $975 owed to the United States Trustee, Broidy did not return the remaining $512,526 that belonged to Mesa. Instead, he stole it and used it to pay for personal expenses.