Ms. Banner filed a ‘bare bones’ Chapter 13 petition signed by her attorney, Joseph Kosko, who was a local partner in the law firm of Volks Anwalt, which solicited Banner as a client through direct mail. After missing numerous deadlines for filing the completed petition, ultimately the bankruptcy court held multiple contempt hearing regarding the representation by Kosko, Volks Anwalt, and its sole owner and managing partner, Jessica McClean. The bankruptcy was actually filed after the 10-day upset period for the sale of Banner’s home, such that the property was not protected nor the foreclosure halted.
The bankruptcy court found that Volks Anwalt’s business plan was developed by McClean and included a marketing plan that used direct mailings targeting individuals subject to foreclosure proceedings. Volks Anwalt operates in 43 states and, as of February 2016, had handled approximately 400 bankruptcy cases since its inception in May 2015. Its local partners, including Kosko, were found through internet recruiting and with minimal due diligence in researching that attorney. The local attorneys have have no authority, control, or input over the operations and management of the firm and, while they have some control over the management of their assigned cases, were not even expected to appear at all §341 Meeting of Creditors. Instead a “coverage attorney,” obtained through an attorney temp service, would appear at the majority.
In this specific case, Kosko and Volks Anwalt not only failed to file the bankruptcy in time to save Banner’s home, but also failed to redact her Social Security number in pleadings, did not provide Banner with any of the disclosures required by 11 U.S.C. §§ 342 and 527, nor even intended to appear at her §341 Meeting of Creditors.
The bankruptcy court found that Kosko violated the North Carolina Rules of Professional Conduct in terms of competence, diligence and his failure to communicate with Banner. Further, Kosko, McClean and Volks Anwalt had engaged in the unauthorized practice of law, as McClean is only licensed in Florida and New York.
Due to this misconduct, the court disbarred Kosko from practicing in the bankruptcy court for one year, McClean for five years, ordered all fees received be disgorged and both Kosko and Volks Anwalt to pay Banner $5,000.00.
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