Dordevic v. Layng

Bankruptcy Ct. did not err in directing counsel for debtor to completely disgorge all of his attorney’s fees received from debtor as sanction for counsel’s failure to file updated Rule 2016 disclosure statement of fees that debtor had paid to counsel. Record showed that: (1) debtor’s counsel originally reported in his Rule 2016 disclose statement that debtor had paid him $5,000 in attorney’s fees, while U.S. Trustee learned through discovery that debtor had actually paid counsel $21,500; and (2) counsel failed to file updated 2016 statement in spite of three reminders by Trustee to do so. Trustee thereafter filed motion to have counsel forfeit all fees paid by debtor, and Bankruptcy Ct. granted said motion. District Ct, thereafter affirmed Bankruptcy Ct. order, and Ct. of Appeals affirmed Dist. Ct., after noting that: (1) Rule 2016 statement is due within 14 days of filing bankruptcy petition; (2) attorneys are required to inform Bankruptcy Ct. of any update to information contained in said disclosure statement; and (3) Bankruptcy Ct. could properly discount counsel’s explanation that he was unfamiliar with his obligations under Rule 2016, where counsel had been involved in more than 350 other bankruptcy cases.