Business Lawyer Fails to Escape a $364,000 Contempt Fine through Bankruptcy

by San Antonio Attorney

A lawyer from Michigan sought bankruptcy protection to dodge a large fine as a consequence of disobeying a court order.

But a bankruptcy judge ruined the plan of Attorney David W. Charron, ruling that his civil contempt fine of $363,506.77 is a non-dischargeable debt in bankruptcy.  The fine was a result of mobilizing the sale of an insurance company even though a court judge did not allow it.

According to Judge James Boyd, Mr. Charron won’t be able to eliminate his financial obligation to Glenn Morris, the previous co-owner of insurance firm Morris, Schnoor & Gremel Inc.

The monetary charges came from the chaotic split of the insurance company in 2007 that had led to a full on combat in the civil justice system.  The bankrupt lawyer represented a co-owner who offered to purchase the controlling share of Mr. Morris for $2.5 million, but afterwards discontinued making the payments.

The former partners went to court, and the client of Mr. Charron agreed to postpone on transferring the assets for a time.  But after a few months, Mr. Charron assisted in planning the insurance agency’s sale to a different buyer.  Mr. Charron’s involvement of the sale resulted in the contempt fine.

Last year, the breakup of the company became an important news story when the business attorney was fined with $1,000 for calling a Kent County Circuit Court judge a “bitch.”

Mr. Charron is a known business lawyer and he represents several companies in West Michigan. He filed for bankruptcy on Dec. 31, 2014, and the case is now focused on whether bankruptcy can wipe out his fine.

There is no explicit rule that states contempt fines can be discharged during a person’s bankruptcy.  Under the bankruptcy law, most unsecured debts can be forgiven but the person cannot escape a debt that was created “for willful and malicious injury” caused to another person.

The “willful and malicious” concept is subject to interpretation and has obliged other judges to give thought to its meaning, like that case when a man from New York filed Chapter 7 bankruptcy in an attempt to avoid an $110,000 court judgment issued against him for biting his neighbor on the nose in an elevator.

Judge Boyd ruled that the court put together a summary of “willful and malicious” misconduct, and he determined that Mr. Charron should compensate Mr. Morris for the injuries he sustained due the lawyer’s actions.

Not all types of debt can be eliminated in bankruptcy. If you want to file for bankruptcy, make sure you consult a San Antonio Bankruptcy to help you make the best choices for your situation.

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