Revised ethics complaint to the California State Bar ("CA Bar") alleging a series of disclosure failures and extreme misconduct by Hennigan, Bennett, & Dorman ("HBD") with respect to their appointment as counsel to the Debtor In Possession Aureal, Inc. vis a vis a number of HBD's simultaneous clients which were adverse to Aureal including hedge fund Oaktree Capital et al., Argo Partners, and PriceWaterhouseCoopers. Reversing the previous decision by the CA State Bar against taking action on the original complaint, the CA State Bar forwarded this Revised Complaint to their Enforcement Division and opened case numbers 06-O-15523 through 06-O-15529. Read about what is apparently an incredible bungled attempt at #Evidence #Fabrication with the #ManicMonday discovery response delivered with the identified officer who denied he performed a document search or had even seen the documents. This complaint was supplemented by a cover letter entitled CABAURHBDreq1.pdf containing additional documents requested by the CA Bar and was thereby expanded to include ethical violations related to and intertwined with SEC Violations. These related SEC Violations were specifically brought to the attention of SEC enforcement officials via a series of letters most notably the document which is available on this site under the title:SEC filings by client of PriceWaterhouseCoopers and HBD.

Note: This Revised Complaint file CABAURHBD26.pdf references the original complaint file CABAURHBD1v5.pdf. Both files are referenced in the SEC letters SECAURHBDreq1sup.pdf and SECAURHBDreq1.pdf

Voluminous exhibits to the appeal of the California State Bar's flip flopping effort to review the complaint and clear evidence of ethics and law violations.

Download CABAURHBDS157298-exhibits.pdf for free.

California State Bar complaint number 05-20211 (Note: revised filing below) against the Hennigan, Bennett & Dorman ("HBD") law firm and certain of its partner and employee attorneys in connection with their conduct as official counsel to the Debtor In Possession during the Aureal, Inc. bankruptcy proceedings in the Northern District of California case number 00-42104 (T). This complaint points out that the law firm HBD and its lawyers failed to make a timely and complete disclosure of all facts and relevant circumstances related to their concurrent representation of their conflicted hedge fund client Oaktree Capital et. al which was indisputably adverse to the Debtor as the sole secured creditor and largest stockholder of the Debtor. Thus, every official act performed by HBD in the Aureal proceedings that involved their conflicted client Oaktree was an unwaivable conflicted prohibited by Federal law and in further violated numerous provisions of the California Rules of Professional Conduct (ethics laws), including without limitation CRPC 3-310. False statements and intentionally withheld information in a bankruptcy case constitutes bankruptcy fraud, unless there exists special immunity for acts committed by former DOJ employees or by lawfirms with former partners currently employed within the DOJ.

Note: This original complaint CABAURHBD1v5.pdf was supplemented by the Revised Complaint CABAURHBD26.pdf and is referenced in the SEC letters SECAURHBDreq1sup.pdf and SECAURHBDreq1.pdf all of which may be downloaded without charge from BankruptcyMisconduct.com

Color coded chart showing the chronology of certain instances of Attorney Misconduct with hyperlinks within the Revised Complaint.

The conflict of interest involves Argo Partners, a bankruptcy claims trader which purchased a claim from Center Capital Corp., and the California law firm Hennigan, Bennett, & Dorman ("HBD"). This law firm simultaneously represented as debtor's counsel the public company Aureal, Inc. as well as their most significant creditors Argo Partners and the hedge fund Oaktree Capital.

HBD objected to and won the complete disallowance of the Center Capital claim.  However, HBD later realized that the claim was one of the claims purchased by their conflicting client Argo Partners. Even though the 10 day period elapsed after the Court's final order which disallowed Argo's claim, this law firm side stepped the unappealable final order and pushed a stipulation paying their adverse client Argo on the full amount of the already expunged claim.

The bankruptcy estate of Aureal Inc. thus paid for the disallowed claim owned by Argo, plus all of the legal fees of HBD as they obtained the disallowance of the claim, and then paid even more: once HBD learned that the claim was owned by Argo there were additional legal fees for HBD as they sought to get around the disallowance of the claim.

Chronology of Conflicted Representation with hyperlinks into the Revised Complaint.

The conflict of interest summarized in this color coded chart involves Argo Partners, a bankruptcy claims trader which purchased the majority of the claims in amount and number in the bankruptcy of the public company Aureal, Inc. The California law firm Hennigan, Bennett, & Dorman was retained as the official debtor's counsel to the public company Aureal Inc. in federal bankruptcy court as the firm simultaneously represented this same debtor's most significant creditors Argo Partners and the hedge fund Oaktree Capital.

By "coincidence", this conflicted law firm ensured that their conflicting client, the majority stockholder Oaktree et al, received over $20 Million dollars from the bankruptcy case while the minority stockholders did not receive a penny.

This chart is Exhibit J of the Revised Complaint.

Color coded chart showing the chronology of Conflicted Representation with hyperlinks into the Revised Complaint. This chart is Exhibit X of the Revised Complaint.

PriceWaterhouseCoopers ("PWC") was spanked by the judge in the Aureal Inc. bankruptcy proceedings. Legal misconduct by PWC was found to have been performed with the assistance of Aureal's bankruptcy counsel Hennigan, Bennett, and Dorman ("HBD"). PWC was simultaneously a client of HBD, a fact that does not appear to have been disclosed in any of the sworn declarations as required from HBD as part of their fee requests.

The Court found that a 29 day failure to disclose a conflict in relation to PWC was "purposeful" and warranted the disgorgement of legal fees. In comparison the Revised Complaint details multiple failures to disclose a conflict by HBD of 90 days and 239 days involving two separate representations with their conflicting client Argo Partner concurrent with the bankruptcy case.

This letter CABAURHBDreq1.pdf contains additional documents requested by the California State Bar in conjunction with their evaluation of the Original Complaint as Revised against the firm Hennigan, Bennett & Dorman LLP (" HBD ") and all lawyers therein who simultaneously represented conflicted clients Oaktree Capital et al., Aureal, Inc. and Argo Partners.

The California State Bar wanted a copy of the Judge's order in the Aureal, Inc. bankruptcy in which she found misconduct by professionals. Included in the letter was newly uncovered information showing that the ethical violations in the revised complaint were inextricably intertwined with numerous SEC Violations.

When a public company such as Aureal, Inc. files its mandatory 8K report listing "current items", they are required to answer under criminal penalty of Title 18 U.S.C. Section 1001 "Are there any other current items to report? ".  Aureal, through it's agents and lawyers, fraudulently answered "No" as they excluded mandatory disclosure of resignations of directors, resignation of a director for cause, and the consolidation of control by the hedge fund Oaktree Capital, et al. The fraudulent filings are exacerbated by the fact that Oaktree Capital was the simultaneous client of HBD, the same law firm which was in control of Aureal during its bankruptcy and the numerous SEC Violations.