Bryan Cave wants Estate Financial case dismissed

July 27, 2011

EFI officers Karen Guth and Josh Yaguda

A request by Bryan Cave attorneys to have a $184.7 million malpractice suit filed by Estate Financial Inc. (EFI) bankruptcy trustees dismissed is headed to federal court in Los Angeles. [PacificCoastBusinessTimes]

On April 29, Thomas Jeremiassen, one of the EFI bankruptcy trustees, filed a complaint that claims Bryan Cave LLP, an internationally renowned law firm with 1,000 plus lawyers, and one of its attorneys, Katherine Windler, discovered in 2006 that EFI was breaking “countless real estate, securities and corporate laws, rules and regulations” but failed to advise her client to conform to California and federal laws in an attempt to garner huge legal fees.

Windler’s advice allegedly led directly to the swindling of more than $180 million from more than 1,500 San Luis Obispo County investors.

Bryan Cave attorneys argued that California law prevents a bankruptcy trustee from successfully suing a company’s attorneys for misdeeds of the clients. At a July 15 hearing, the defendants asked bankruptcy Judge Robin Riblet to dismiss the case.

But a U.S. Supreme Court decision hot off the presses prompted Riblet to leave the decision of where the case should be heard to a federal district court judge in Los Angeles because of a June 23 ruling by the U.S. Supreme Court in the case of Stern vs. Marshall.

The case involved Anna Nicole Smith — who died in 2007 — and her estate’s claim for $89 million in damages from the $1.6 billion estate of a much-older oil tycoon whom she married and who died while Smith was still alive.

Chief Justice John Roberts said that bankruptcy judges can’t rule on matters of state law because bankruptcy judges don’t have as much constitutional authority as federal district court judges.

However, when a company is in bankruptcy such as Estate Financial is, all lawsuits are put on hold though complaints can be made through the bankruptcy court.

Bryan Cave attorneys wants its case heard in district courts instead of the bankruptcy court which is charged with recovering money for debtors.

Riblet has given a federal district court in Los Angeles 60 days to decide where pre-trial motions in the case against Bryan Cave should be heard.

Bryan Cave also moved to withdraw a claim against EFI for charges not received.

Riblet denied the motion calling it a move “to get rid of the jurisdictional hook” that could have the case heard before the bankruptcy court rather than a district court.

“There are things in your proof of claims that the trustee could use as admissions,” Riblet said during the July 15 hearing. “If you’ve made admissions in a court filing, I don’t see any reason to allow you to say, ‘Oops, we didn’t mean to say that.’ ”

EFI made short-term “bridge” loans to contractors. Investors, during good times, were promised 12 percent on their money in monthly interest payments, with their entire principal returned upon maturation of the loan.

At the onset of the bankruptcy in 2008, EFI’s portfolio consisted of 500 active loans and more than $317 million in unpaid principle. Only $21,000 was held free and clear, according to court documents.

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Robert Grigger Jones was also involved with the EFI and Hurst Financial situation. He admitted in court last year he represented Kelly Gearhart during several real estate transactions. Don’t get discouraged the agencies policing the FBI and other agencies such as the SLO DA’s offices are aware of cover ups and a consistent “look away” attitutude I have left several messages for Jerret Gran at the SLO DA”s office with no response. Letters have been received stating they cannot proceed with our case for lack of evidence. What lack of evidence? We have an admission by our stepmother that her signature is not on the 1st Amendment, Jones is now stating he doesn’t know how the forged document came to be in his office, He admitted in an affidavit thee document was signed in Califonria and yet our stepmother states she was NOT IN california nor was my father.

Jones tried this crap with another family recently, and he was stopped before he could completely take over the guys estate. However the family did alert the Atascadero Police and submitted his findings to the DA in SLO Now wouldn’t that be enough to open up an investigation on Grigger Jones? Guth and Yakuda are blaming their attorneys stating the attorneys didn’t act on their behalf? They knew what was going on just as our stepmother KNEW Grigger Jones was committed fraud

I will make an effor to be at the next hearing

The NYT article about the Nicole Smith Bankruptcy case provides a direct link to this 63 page Supreme Court case. Since the jurisidictional issue involves the proper forum in which to litigate a bankruptcy case that contains issues involving “…a common law cause of action,” people may want to read the case. What I can’t figure out (without reading the case,) is how Anna Nicole Smith and the estate of her Texas “oil tycoon” deceased husband ended up in Bankruptcy Court.??

The case was made possible from the New York Times’ excellent Web site. You can get a year’s subsciption to the NYT paper for less than it costs to subscribe to the Telegram Tribune, if you hunt for the best subscription deal.

Once again, CalCoastNews’ lightening fast reporting captured important news about an important case.

Even more gold nuggets were discovered when I followed CCN’s 07/27/2011 article to the NYT’s Web site: I found another link to a case concerning Prosecutorial Misconduct which comes out of New Orleans and Harry Connick, Jr.’s court.

Harry F. Connick v. John Thompson was the case that sharply divided the court, 5 to 4. Honestly, I haven’t read the case yet, but the fact that there are four separate dissents, including one by Ruth Bader Ginsberg, lets me know we are going to be hearing about this case again. This kind of case is one all Law & Order fans should read. Go to the NYT Web page to download Ruth Bader Ginsberg’s dissent and read it yourself:

It will give you an idea about the high stakes of litigation in the real world. When you read it, you may weep, or cry out in anger. Then, get active in your community. Don’t just trust that someone else is going to run your town for you.

That case was found through this NYT link:

I see in today’s Trib that the olive ranch is for sale.

I had some serious $ with EF.

Say the lawsuit stays and EF is successful. Who will benefit? The investors or the lawyers?

Lawyers are the only ones that ever benefit. Clients just get ‘made whole’ (if you’re lucky).

With the liberal courts and namby pamby juries we have today, I would not be the least surprised if they walk free…

I’m a flaming liberal and hard core left wing partisan-and I agree with easymoney. Guth AND Cave should be strung up along with gearhead, miller and his little girl brard. The courts are way too easy on these sorts of crooks-these crooks ruin thousands of people and if they get caught they spend a little time in some country club. Shameful…..

By the way, the ongoing lawsuits to get some recovery from the evil title companies and crooks involved in the Hurst financial debacle are mired in discovery evasions and delays, increasing costs to the victims once again. The attack dogs of the corporations are doing a swell job of delaying, and denying, justice. I guess the law gives the crooks ample opportunity to pull these tactics but I wish a decent and hard ass judge somewhere would slam them for it.

Our four little nazis who burned the cross on the lawn, the four murderers who killed Destiny; the endless slime we spend fortunes on just to put them away for a bit-its really infuriating. And the lower than slime guy in Norway (who got much inspiration from American hate radio) will probably spend the rest of his life chuckling at the system that gives him 3 squares after he murdered so many. Something is wrong here.

I have to agree with hotdog, in that white collar crime by public officials or private business seems to always get a pass or timed out in long protracted court arguments and often the cases are thrown on on minor technicalities.

And IMHO, lawyers feed off of this misdirection and deflection, making big money whether a case is ever tried or the perps ever see justice.

In Norway, your slime guy can only be incarcerated for 21 years. He will be in a luxurious prison, compared to most, and will be helped with all kinds of government programs when he gets out, all brought about by Norway’s oil wealth and their ultra liberal philosophy.

Look at Karen Guth’s horrible dye job. She should have gone to George Braddy.

Robert Grigger jones in Atascadero was the attorney of record prior to the bankruptcy filings Is he being held responsible? How about the attorneys for Kelly Gearhart?

If I were Cave, I would try to dismiss the case too! I don’t see how his firm can wash their hands of this malfeasance. I truly hope that the investors are able to recover their losses. I like the way bob put it, “If that puts Cave out of business, too stinking bad. Perhaps a little karma will put the sting on someone’s greed?”

And right here is the crux of the argument as to whether or not Bryan Cave LLC is responsible in any manner in the EFI scandal: “There are things in your proof of claims that the trustee could use as admissions,” Riblet said during the July 15 hearing. “If you’ve made admissions in a court filing, I don’t see any reason to allow you to say, ‘Oops, we didn’t mean to say that.’ ”. It seems that the hubris of Cave in filing the claims in the first place directly placed them in the path of admitting that their advice led to EFI bilking so many out of so much money, but Cave only saw the dollar signs for his company, so damn the torpedoes, full speed ahead. Here’s hoping that justice prevails, that Bryan Cave LLC is on the hook for ALL of the monies that were bilked out of the investors and that they get all of their money back. If that puts Cave out of business, too stinking bad. Perhaps a little karma will put the sting on someone’s greed?