Bankruptcy judge keeps Kossoff trustee’s subpoena power intact, bigger fight looms
- State and federal prosecutors investigate New York real estate attorney
- Administrator and Kossoff’s attorney disagree on whether providing documents would waive Fifth Amendment rights
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(Reuters) – A Manhattan bankruptcy judge on Thursday kept the subpoena power of the trustee overseeing the bankruptcy of New York real estate law firm Kossoff PLLC intact, but there is a fight over whether the documents sought by the trustee waive the founder of the Mitchell firm Kossoff’s Fifth Amendment rights.
U.S. bankruptcy judge David Jones said he was upholding his May 24 order granting an injunction to Chapter 7 Trustee Albert Togut, of Togut Segal & Segal, largely in effect. At a hearing Thursday, Jones said he would add a reservation of rights clause that will allow parties to come back to him in the event of a dispute.
In doing so, Jones rejected a recommendation from Walter Mack, a criminal defense attorney representing firm founder Mitchell Kossoff, that his restitution order would include language not prohibiting his client from providing documents to Manhattan and to federal prosecutors.
Investigators from the Manhattan District Attorney’s Office and the U.S. Attorney’s Office investigated Kossoff PLLC and Kossoff himself, Mack said. Kossoff appeared to disappear in April amid a spate of lawsuits against clients.
Mack said investigators will eventually want more documents. Jones said there was no need to include this language in his relief “because there is nothing imminent planned.”
But even as Jones closed the book on this particular dispute, Thursday’s hearing served as a prelude to an emerging brawl over Kossoff’s Fifth Amendment rights.
Togut seeks another court order designating Kossoff as the responsible officer of the debtor and requiring Kossoff to comply with him. Kossoff, according to Togut, refused to provide everything from bank statements and credit card statements to customer lists.
“The trustee needs Kossoff to do the things necessary to help with the administration of this estate,” Togut wrote in his May 28 motion.
Kossoff claims general privilege under the Fifth Amendment and refuses to provide documents of any kind unless he has immunity from prosecution, Togut said in his petition. Togut’s colleague Neil Berger echoed these arguments during the hearing.
Togut in his motion argued that Kossoff can cooperate with the trustee while retaining his right to assert the Fifth Amendment. Mack at the hearing said that was not possible.
“By submitting all of these things, which the trustee seems to think I have an obligation to do, I’m essentially waiving Fifth Amendment privilege unless I’ve been granted immunity,” Mack said.
Jones has yet to rule on Togut’s motion; Kossoff’s objection is due on June 17, according to federal court records.
Togut and Mack did not respond to requests for comment.
The case is In re Kossoff PLLC, U.S. Bankruptcy Court for the Southern District of New York, No. 21-10699.
For Togut: Neil Berger, Brian Shaughnessy and Minta Nester of Togut Segal & Segal
For Kossoff: Walter Mack de Doar Rieck Kaley & Mack
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