Distressed real estate lawyer Kossoff cannot protect bankrupt doctors

United States Bankruptcy Court for the Southern District of New York in Manhattan, New York City. REUTERS / Andrew Kelly

  • Judge decides Mitchell Kossoff cannot invoke Fifth Amendment against trustee
  • Kossoff also under criminal investigation

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(Reuters) – A Manhattan bankruptcy judge has again ordered real estate attorney Mitchell Kossoff, who is under criminal investigation amid charges of mismanaging client funds, to cooperate with the Chapter 7 administrator overseeing the liquidation of his law firm.

U.S. Chief Bankruptcy Judge David Jones said in a hearing Thursday that Kossoff could not invoke his Fifth Amendment right against self-incrimination because he was handing over corporate documents to his private company, Kossoff PLLC, not personal records.

Jones rejected the argument made by Kossoff’s criminal defense attorney Walter Mack of Doar Rieck Kaley & Mack that Kossoff and his law firm are indistinguishable.

“These assertions fail to overcome the collective entity doctrine,” Jones said. He ordered Kossoff to turn over the records requested by Al Togut, a bankruptcy attorney overseeing Kossoff PLLC’s estate as Chapter 7 administrator.

Togut praised Jones’ decision in an email, saying it “ends Mr. Kossoff’s claim that his Fifth Amendment privilege relieves him of the obligation to cooperate with the administrator”.

Togut has said he expects Kossoff to show up to a meeting of his law firm’s creditors, where Togut, as trustee, will review him.

Jones’ move comes a month after he appointed Kossoff as head of his real estate law firm, which was forced into bankruptcy by a group of creditors who claimed the firm had embezzled more than $ 8 million. dollars of escrow funds.

Since then, Togut, represented by lawyers from his law firm, Togut, Segal & Segal, has complained that Kossoff wrongly invokes Fifth Amendment privilege in order to protect documents, accusing him in a July 16 filing to engage in “ransom demands and delay tactics”.

Mack at the hearing argued that handing over documents or having to create them could infringe on Kossoff’s Fifth Amendment rights, as he faces possible criminal prosecution. He claimed that Kossoff, under his leadership, could not complete an application for assistance from a pro bono attorney because it would require him to disclose his income.

Mack said the document fight will end once Kossoff pleads guilty to potential charges brought by the Manhattan district attorney or the district attorney’s office drops the case. Mack stated in a July 9 deposit that the Brooklyn US attorney no longer investigates Kossoff, describing the Manhattan district attorney as the “only criminal investigating prosecutor” on him.

“He wants to cooperate. It’s not like we are sitting there hiding documents. We are trying to keep him alive and we are trying to keep him in a situation where his life can continue in a semblance of reason,” said Mack. during the hearing.

Mack declined to say after the hearing whether Kossoff would hand over the records sought by the Chapter 7 administrator. “Time will tell what we do,” he said in an email.

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

Read more:

Bankruptcy judge orders Kossoff to cooperate with trustee

Besieged real estate lawyer Kossoff battles trustee over cases

Bankruptcy judge keeps Kossoff trustee’s subpoena power intact, bigger fight looms

Kossoff’s bankruptcy trustee warns of upcoming contentious case

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