The Bangor (Maine) Daily News recently reported that F. Lee Bailey has filed for bankruptcy in Maine. According to the news story, Mr. Bailey sought bankruptcy relief to resolve an outstanding federal tax debt from a dispute that ended his legal career. Reportedly, Mr. Bailey is a resident of the State of Maine, having moved there in 2010 and that is why he filed his case in that state.
Mr. Bailey owed the IRS around $5 million according to the article. This amount arose from dealings that Mr. Bailey allegedly had with a client in the mid-1990’s. According to the news story, Mr. Bailey was representing a client in a drug smuggling and money-laundering case when he agreed to take over the client’s shares in a pharmaceutical company. He and another attorney then took their pay out of the sale of those shares. At the time of the sale of the shares, the value of those shares had increased significantly. This led to a dispute between Mr. Bailey and the federal government over the amounts due in taxes to the government resulting from the sale of the shares. During this dispute, Mr. Bailey spent 44 days in jail. When the federal government sought to collect the $5 million from Mr. Bailey, he challenged the government in the U. S. Tax Court. However, his challenge was not successful.
Mr. Bailey previously filed a Chapter 7 bankruptcy and was able to eliminate much of his debt in that case. According to the news article, Mr. Bailey was also able to resolve his personal liability to pay the taxes alleged to be owed; however, there are liens from these taxes remaining on some of his property. The new bankruptcy case is filed under Chapter 13. According to Mr. Bailey’s attorney, James Molleur, the purpose of the new case is to pay the value of the liens against his property over time so that he can finally be finished with the IRS matter. Unfortunately, Mr. Bailey was disbarred in Florida and Massachusetts in 2001 and currently is not licensed to practice law. However, he is seeking to become readmitted to the bar.
What has happened in Mr. Bailey’s case is not all that uncommon. His situation illustrates how the federal debt relief laws can be properly utilized to resolve a wide range of debt problems, including federal tax debts and liens. If you or someone you know is facing this type of situation, there are legal and proper ways to address it. Our attorneys have many years of experience in getting meaningful and lasting debt relief. We would be happy to help you.