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The U.S. Court of Appeals for the Fifth Circuit has ruled that a Texas businessman who was sentenced to two years in prison for bankruptcy fraud may use the sale of the proceeds of his house to pay his criminal defense attorneys, rejecting a U.S. bankruptcy trustee’s attempts to claim the home sale proceeds as part of his estate, Texas Lawyer reported. Curtis Harold DeBerry, the former owner of a failed produce company in Boerne, Texas, was eventually sentenced to two years in prison last year for hiding assets from creditors in bankruptcy. As part of DeBerry’s chapter 7 bankruptcy case, which he filed in 2014, he used the Texas homestead exemption law to protect his house from the bankruptcy estate. DeBerry sold his house later that year for $364,592, did not reinvest the proceeds and instead transferred the money to his wife and to San Antonio’s Goldstein Goldstein & Hilley for the benefit of Gerry Goldstein and Cynthia Orr, two firm partners who represented DeBerry in a criminal matter.

A national consumer bankruptcy law firm and its local partner attorneys were sanctioned and enjoined by the U.S. Bankruptcy Court for the Western District of Virginia for causing “unconscionable” harm to their clients, according to a DOJ press release. The court found that UpRight Law and its attorneys, among other things, systematically engaged in the unauthorized practice of law, provided inadequate representation to consumer debtor clients, and promoted and participated in a scheme to convert auto lenders’ collateral and then misrepresented the nature of that scheme, Executive Office for U.S. Trustees Director Cliff White of the announced yesterday. The court also revoked UpRight’s bankruptcy filing privileges in the Western District of Virginia for not less than five years, and those of its local partners for 12 and 18 months, respectively. The bankruptcy court also sanctioned Sperro LLC (Sperro), an Indiana towing company that did not respond to the U.S. Trustee Program’s complaints, and ordered the turnover of all funds it received in connection with bankruptcy cases in the district. Read more. 

For further analysis of this decision, be sure to read today's piece in Rochelle's Daily Wire.