Teresa Giudice is again in the news – this time for suing her bankruptcy attorney for malpractice. In June, 2015, the Real Housewives star sued her former bankruptcy attorney alleging legal malpractice, breach of contract and breach of fiduciary duty.
However, it is interesting to note that Giudice’s conviction was not limited to bankruptcy fraud – those actions she took or failed to take in the filing of her bankruptcy petition – but also pre-petition bank fraud resulting from failures to file income tax and falsified W2 forms on mortgage applications. Yet she claims it is all the fault of her bankruptcy attorney that she ended up in prison.
The attorney representing Giudice in the malpractice lawsuit against her bankruptcy attorney said the following: “Defendant Kridel continuously filed documents that were materially inaccurate, but HE PERMITTED PLAINTIFF GIUDICE TO SIGN DECLARATIONS UNDER PENALTY OF PERJURY THAT THE DOCUMENTS WERE ACCURATE (emphasis added).”
Guidice’s Duty to Provide Information
As I have stated in previous blog posts, a bankruptcy client has a duty to provide their bankruptcy attorney with all necessary information to comply with the Bankruptcy Code and to be truthful in the disclosures to the court. As Mrs. Giudice’s bankruptcy attorney points out, she testified under oath numerous times that she had reviewed her bankruptcy schedules and statements and that the information was truthful and accurate. Teresa Giudice’s credibility will be central to the outcome of this malpractice lawsuit. It’s hard to prove your case when you have made diametrically opposed statements under oath. Methinks the lady doth protest too much.
Now the current kerfuffle has Teresa fighting with her Bankruptcy Trustee on who should be entitled to the money if she is successful in the malpractice claim against her bankruptcy attorney. It seems Mrs. Giudice did not believe her creditors should share in her windfall should she be successful in her lawsuit. However, her malpractice attorneys reached a settlement with the Trustee to divide any lawsuit proceeds received by Giudice between her and her creditors. If approved by the bankruptcy judge, Giudice’s bankruptcy proceeding could again be finalized.
But wait, there’s more! Now the defendant in the malpractice action, Giudice’s bankruptcy attorney, has objected to the settlement between Giudice and the Bankruptcy Trustee claiming a conflict of interest. Just when you thought it was over. Now a decision is expected to be handed down by the bankruptcy judge this month on whether the settlement between Giudice and the Trustee can be approved. Stay tuned!
If you are considering a filing for bankruptcy relief, please contact one of our locations nearest you in Alabama, Mississippi or Tennessee for a free, confidential consultation with one of our experienced, licensed attorneys.
Carla M. Handy is the Managing Partner of the Bond & Botes Law Offices in Gadsden and Anniston, Alabama. She holds a Bachelor of Arts from Auburn University, and a Juris Doctorate from the University of Alabama School of Law. She has been helping families navigate consumer bankruptcy cases since 1994.Read her full bio here.