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BankruptcyMisconduct.com happened upon this incredible story on the net. The appears too much here to ignore, and in fact we have created a downloads section related to the Sturman bankruptcy cases. We don't know if we've ever seen a lawyer stand so boldy against what he believes to be corruption of the bankruptcy system as we see David H. Relkin do in defense of his client Donna Sturman.
We just happened to focus in on this particular conflict of interest tid bit: One should also note that, at this point in the Cases, the Debtors, Joseph Warren, one of the executors of the Muriel Estate and the Entities were all represented by Stroock Stroock & Lavan, Judge Beatty’s former law firm.
As the coming expurgation of judicial corruption's trail is near approaching, we look forward to a complete investigation and resolution of this matter. Until that time, we offer these materials at our download section, as well as the copy of a letter to the U.S. Trustee's office appearing below, for academics, unbridled journalists, and scholarship competitors...
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CoinkyDoink - Harvard Prof Arrested lying about Wuhan Virus Lab
CA Bar Complaint (13244)
Bankruptcy fraud is not only in Delaware but is going on through out this country. Not only was I punished for attempting to expose it I was put into an involuntary without service and then not given a discharge. The Judge in the cases was the same Prudence Carter Beatty who was forced to take a “medical leave” because of her outrageous conduct in the Delta Airlines bankruptcy.
This is just one of numerous complaints made to US Trustees Offfice all of which were ignored.
October 12, 2007
Ms. Carolyn S. Schwartz, Esq.
Office of United States Trustee
33 Whitehall Street
New York, New York 10004
Attention: Brian S. Masumoto, Esq.
Greg M. Zipes, Esq
Re: In re Wayne A. Sturman 89 B 11932
In re Bruce D. Sturman 89 B 11933
In re Howard P. Sturman 89 B 11934
In re Donna A. Sturman 02B 11671
Dear Ms. Schwartz:
It has come to my attention that the Sturman Brothers Cases are about to be closed. Throughout the course of the Sturman Brothers cases your office has been repeatedly alerted to serious issues of bankruptcy fraud in that an involuntary bankruptcy petition was filed for an improper and illegal purpose. In addition your office has also been advised that there is evidence of serious Trustee misconduct. Misconduct that included theft, embezzlement and conversion of non-debtor property and assets, collusive fee and settlements agreements.
For 18 years the Sturman Brothers cases have been used and prolonged for the improper purpose of obstruction of discovery and justice, to force me to incur excessive legal fees and to ultimately drive me into bankruptcy either voluntarily or involuntarily, by using my own stolen property, and assets against me.
In 1998 and 1999 your office was served with adversary complaints, which were filed on my behalf individually and on behalf of partnerships, corporations and the Estates of Henry and Muriel Sturman, objections to creditors claims and objections to administrative fees In Adversary Complaint No. 98-9435, entitled Donna Sturman et al. v. Chase et al., which was also served upon your office, my counsel Ms. Helen Davis Chaitman and co-counsel Charles A. Stewart III, stated the following:
Chase’s attempt to demonize and punish Donna and her counsel for their efforts to expose Chase’s culpability in the diversion of Sturman family assets is seriously misguided and hopelessly deficient. By these motions, Chase obviously is seeking to shield its own conduct from scrutiny — its grossly reckless conduct in making millions of dollars of improper loans to Donna’s brothers; its conduct in filing a technically deficient bankruptcy proceeding to avoid discovery in an action brought by Donna in New York Supreme Court; its naked attempt to manipulate these bankruptcy proceedings to gain an advantage over Donna; and even its seeming orchestration of the criminal proceedings commenced against Donna’s brothers. MHT improperly instituted this case on August 4, 1989, when MHT without any other creditors filed involuntary chapter 7 petitions against Howard, Bruce and Wayne Sturman. The filing of the involuntary petitions had two purposes: (1) to stop Donna’s discovery of the debtors’ books and records in state court litigation, and (2) to allow MHT to gain an advantage over Donna. The filings followed Donna’s massive state court litigation in which Donna, ironically represented by MHT counsel, Milbank Tweed Hadley & McCloy (“Milbank, Tweed”), was well on her way to establishing that her brothers had stolen her assets and wrongfully pledged them to MHT and that MHT had aided and abetted her brothers.
At the time the involuntary petitions were filed, MHT knew that the debtors had engaged in criminal conduct, MHT undoubtedly suspected at the time that at least one of its own officers may have engaged in criminal conduct. MHT knew at the time that the involuntary petitions were invalid as a matter of Law. MHT knew at the time that the debtors had defrauded Donna and that the mortgages taken by MHT were subject to avoidance. MHT used the involuntary petitions to seek to gain an advantage for itself over Donna. Through stipulations MHT extended the date for entry of orders for relief until it suited MHT’s own interests. The orders for relief were not entered until April 18, 1991.”
Charles A. Stewart III in an affidavit, dated March 9, 1999, stated what investigation and research had been done prior to filing these complaints . (Although, the affidavit was filed in connection to the Chase complaint the same research was used prior to making any of these complaints or objections.)
As you are also aware an adversary complaint was also served upon your office, which was filed against the Sturman Brothers Trustee, Marc Stuart Goldberg entitled Donna Sturman et. al v. Mark Stuart Goldberg Adversary Complaint No. 99-8076.
In that adversary my counsel set forth serious allegations against the Mr. Goldberg, which included the following:
“The Sturman Brothers Trustee, Marc Stuart Goldberg (“Trustee Goldberg”) was openly antagonistic to Ms. Sturman and colluded regularly with the institutional creditors, whose claims he knew were voidable and not bona fide claims.”
“ The Goldberg Trustee with the bankruptcy courts approval effectively precluded Ms. Sturman from having access to funds from the partnerships, corporations, and her parents’ estates, despite the fact that she had an undeniable interest, thereby preventing her from affording, among other things, attorneys to represent her.”
Although duty-bound to close the estates “as expeditiously as compatible with the best interest of parties in interest,” the Trustee actively sought to “milk” the Sturman bankruptcy cases for as long as possible to enrich himself, to the detriment of the interests of other creditors, particularly Donna Sturman. . Throughout these bankruptcy proceedings, the Trustee has been blind to the ethical consequences of his conduct, focusing instead on improving his own position, financially and otherwise, to the detriment of the Estates and its creditors, particularly Donna Sturman. “(Donna Sturman et al. Adversary Complaint against Trustee 76).
In addition my counsel my counsel filed a detailed reply to the objections of the Trustee and The Chase Manhattan Bank to the Claims Donna Sturman, which were also supported by a preliminary forensic accounting done without the benefit of discovery. Which was also served upon your office in their reply my counsel stated the following:
“Donna asserts claims in three capacities: (a) as an unsecured creditor who has filed a $20 million proof of claim in each of the above estates and who holds additional claims; (b) as a 25% owner of various non-debtor partnerships and properties which the trustee has been managing without her consent since 1991 as well as various debtor assets of which Donna is the equitable owner; and (c) as a beneficiary of the estate of Muriel Sturman. Her claims are well-founded and will be proven at trial.”
“Chase obviously is seeking to shield its own conduct from scrutiny –its grossly reckless conduct in making millions of dollars of improper loans to Donna’s brothers; its conduct in filing a technically deficient bankruptcy proceeding to avoid discovery in an action brought by Donna in New York Supreme Court; its naked attempt to manipulate these bankruptcy proceedings to gain an advantage over Donna; and even its seeming orchestration of the criminal proceedings commenced against Donna’s brothers. Chase, not Donna, has characterized Donna’s claim against it as one for aiding and abetting a violation of fiduciary duty. “
The preliminary forensic accountant investigations evidences that even if my alleged creditors, (all of whom aided in allowing me to be defrauded), claims were paid, I was not and could not be insolvent. See Donna Sturman Attorneys reply to the objections of the Sturman Brothers Trustee and The Chase Manhattan Bank.
In short, Donna’s claims total well over $10,543,133. If Donna prevails, she is entitled to be paid for this money dollar-for-dollar because her claims arise from Donna’s ownership interest in assets and property which were never property of the estates due to their having been fraudulently diverted and appropriated by the debtors.
Even though Donna has not yet had a meaningful opportunity to engage in discovery, she nevertheless has gathered documentation to support her claim that the debtors improperly diverted cash pre-petition which belonged to her. Although there are undoubtedly other defalcations regarding which she has not yet obtained documentation, the following siphoning of funds is documented and was presented as evidence to the Bankruptcy Court: H. Development Corp. $14,438,016 of “loans to stockholders” (See Tax Return annexed as Exh. A to the March 11, 1999 Reply of Sturman to the Objections of the Trustee and Chase to the Claims of Sturman (the “Reply”)); Yorkville Associates: $2,250,470 “due from affiliates’ See Tax Return annexed as Exh. B to the Reply); A.J. Griffen. 902.61 (calculated by subtracting cash receipts from affiliates (reflected in Exh. C to the Reply) for the period 1982 through l989 of $205,282.04 from cash disbursements to affiliates (reflected in Exh. 1) to the Reply) of $414,184.65 for the same period); Pelham Associates: $648,164 based upon a 1992 Federal Tax Return (Exit. E to the Reply); Cauldwell Management $141,275.66 (calculated by subtracting loans from affiliates (reflected in Exhibit. F to the Reply) of $236,137.07 for the period 1982 through 1989 from loans to affiliates (reflected in Exh. G to the Reply) of $377,412.73 for this same period); Pelham Racquetball & Health Club: $1,025,541 based upon a 1983 financial statement (Exit. H to the Reply); Wayne-Adam Corp: $20,300 based upon a 1990 Federal Tax Return ($10,000 as loans from stockholders and $10,300 as due from affiliates (Exh. I to the Reply). These documented transactions of siphoning of money alone totals $l8, 812,650, of which 25 percent or $4,703,162.50 would have belonged to Donna.
On or about February 1, 1999, my counsel also filed an Omnibus Objection to Claims in which I objected to the claims of Chase, SFS Management, Bank of New York, Stroock & Stroock & Lavan , Leon Charney, Spirelli Electric, Boston Safe (as to the Wayne and Howard estates only), and JMR Concrete of Long Island (as to the Wayne and Howard estates only). My counsel also filed objections to the Administrative Claims of Professionals and Trustee Fees.
In addition based upon the filings and circumstances, I would like to understand how your office did not find the “related to”, involuntary filed against me, on or about April 9, 2002, was not only not filed in good faith (without service to me or my counsel), but was quite obviously just a continuation and “related to”, what could not be accomplished in my Brothers cases. That being discovery and recovery of what has and was stolen, embezzled and other punitive damages for what has been allowed to transpire in these cases.
Most importantly I would truly like to understand and know what Bankruptcy Code or Rules or United States Trustee office rules, permit a Trustee to have an adversary complaint filed against him and is not forced to answer or account for his actions, but is permitted to release himself in a collusive settlement with another Trustee? To give himself a release for serious allegations of fraud, embezzlement, filing false statements, making false accounts, failing to protect books and records that were subject to discovery sanction in another Court, conflicts, fee agreement, which included and openly discussed in court “kick back” deals with management of non debtor property.
Based upon the circumstances and pending claims, it is clear that my Brothers cases were used to intentionally strip me of my properties and inheritance and after that goal was accomplished ,I was to be forced into bankruptcy either voluntarily or involuntarily. The law firm, Pollack & Greene, that put me into involuntary was being sued for fraud in New York State Supreme Court and recent found evidence that they had a more serious conflict that was previously known. In UCC filings it seems Pollack & Greene’s largest creditor was Chase Manhattan Bank and that claim was settled a mere 10 days after they served a temporary restraining and preliminary injunction, not on me or my counsel, but on my Brothers Trustee sometime in December 2001. To date I have never been served with this order. In fact at the time my counsel was supposedly pursuing an appeal overturning their arbitration award and fraud claims against them in New York State Supreme Court. All of which documents I would be more than willingly to supply to your office.
In fact on May 20, 2002, I wrote not only to your office but to numerous parties in the United States Trustees’ Office in Washington, D.C., although lacking in typewriting abilities, nevertheless the substance and evidence support the need for an immediate investigation. I have never been notified in writing about why there was need to commence and investigation into these cases. The serious conflicts of interests that have permeated these cases, and casually been ignored, allowed because only one party to these cases raises objections to them?
I have continually been forced to pay for legal fees while the Trustee has used my money to intentionally “bleed” me out, including his own law firms, as the adversary complaint filed by Ms. Chaitman and Mr. Stewart detailed. I walked into Milbank Tweed Hadley & McCloy in 1986 worth $20 million dollars in property and assets stemming from my parents estates, that is not an unsecured claim that puts me at the back of any line. Since that time as my counsel stated in their reply to the objections of the Trustee and Chase, I have been the “victim of a virtual gang rape”. The culmination of those… efforts was not just an objection to my proof of claim but to sub sequentially put me into involuntary and have my claims settled collusively and releases given to all parties for their gross misconduct. To say the least the emotional and financial damages for what has been allowed to transpire here are real and ongoing for my children and me.
My proof of claim, as Mr. Goldberg testified, included proof, of not just a claim but of pending orders, proof of property rights and proof of what had been stolen diverted and embezzled from me or the Sturman Family Enterprises. Putting everyone on notice that any property or assets that came into these cases was already stolen, embezzled and misappropriated, and the Trustee had a duty to trace and sequester according to pending Court Orders. All of which you are aware he did not do. As you certainly must be aware I am not referring to insignificant amounts
I would appreciate in understanding what set of Bankruptcy Code and Rules the Sturman Cases are administered under? I have found no cases that permit the following:
(a) Notice given that the involuntary petition was not filed in good faith by a bona fide creditor whose loans were not only subject to a dispute but judicial scrutiny in another court being allowed to convert those false claims into secure valid claims by filing a collusive involuntary bankruptcy proceeding ;
(b) The Trustee takeover of non-debtor property and assets on an unsigned order, which was later accomplished under an ex parte order over the objections of a non-debtor owner and partner to deprive that owner of funds;
(c) Use of stolen embezzled non-debtor property and assets to satisfy false claims and collusive settlement agreements, fee agreements or allow a Trustee to use these funds for his own personal "piggy-bank;”
(d) The Trustee intentionally keeping an owner, beneficiary, partner and shareholder from her own assets to keep her intentionally impoverished and unable to defend herself;
(e) Using the property and assets of a beneficiary’ estates, partnerships and corporations to fund vexatious litigation, to aid in the conversion of non estate property to “estate” assets?
(f) Allowing a Trustee to not have to account for missing stock and/or proceeds totaling over $18 million dollars, also not belonging to debtor estates?
(g) Allowing a Trustee to file false partnership and corporation tax returns altering ownership and prior returns?
(h) Allowing property and assets to be sold, transferred, and distributed, in violation of pending New York State Supreme Court and Surrogate Orders?
As your office was aware I was forced to enter into a settlement with the Sturman Brothers Trustee in June 2001, for $3.75 million dollars. In that settlement agreement the Trustee recognized that property obtained by fraud of the bankrupt, or by other tort, is not property of a bankruptcy estate, so it is quite obvious that the settlement made by my Trustee and my Brothers Trustee was not only obviously fraudulent and collusive, but the funds used to satisfy all claims were comprised of the stolen and embezzled property that belonged to me and the partnerships, corporations and Estates of my parents. Any funds that I have been given were already mine to begin with, they are not a settlement of any of my claims, but merely what was already mine and used by the Trustee and others to intentionally keep me impoverished and unable to defend myself. Is it your office policy to permit such conduct?
In settlement hearings held on June 22, 29, and July 3, the Trustee testified under oath, that my claims were “real and frightening” and yet based upon no further discovery or evidence, he no longer found them to be frightening with the aid of my “trustee”, Alan Nisselson, who was obviously brought in to expeditiously “dispose” of them.
I also wish to bring to your attention that neither Trustee Goldberg, nor Trustee Nisselson, has or had any standing to settle or release litigation filed by me, on behalf of the Partnerships Corporation or Estates of Henry and Muriel Sturman, as they are not beneficiaries, shareholders or partners. I was also under the impression that it was against public policy to allow claims sounding in fraud to be settled and releases, and parties guilty of fraud releasing themselves from personal liability with the funds and assets, that they knew were not only not property of the debtors estates, but were already stolen.
“THE TRUSTEE RECOGNIZES THE VALUE OF DONNA’S ARGUMENT …(general rule is that “[p]roperty obtained by fraud of the bankrupt, or by other tort, is not properly a part of the assets of a bankruptcy’s estate” where under state law fraud gives rise to constructive trust), cert. denied, 469 U.S. 1207 (1985); In re Petition of Treco, 205 B.R. 358, 362 (S.D.N.Y. 1997)(more efficient for bankruptcy court to determine whether to impose constructive trust over debtor’s assets); In re Allen-Bradley Co. Inc. v. Commodore Business Machines, Inc. (In re Commodore Business Machines, Inc. ), 180 B.R. 72 (Bankr. S.D.N.Y. 1995)(“A constructive trust may be imposed on property obtained by a defendant by fraud”,”[p]roperty held by the debtor subject to a constructive trusts vest the estate with bare legal title to that property subject to the superior equitable interests of the true owner…. That bare interest is not ‘property of the estate’ available to satisfy the claims of creditors”)).
On July 3, 2001. my counsel, Philip Guarino, cross-examination of the Trustee, Marc Stuart Goldberg, testified under oath the following:
Tr.30-43:
Q. Mr. Goldberg, Donna Sturman asserted her claims against her brothers’ prepetition, correct?
A. She commenced litigation against her brothers’ prepetition, yes.
Q. Do you know whether those claims were incorporated into the proof of claims that she filed inn this Court?
A. Donna’s proof of claim was approximately nine inches thick or a foot thick. It referred to a number of pending litigations and appended pleadings from those litigations to a proof of claim.
MR. GUARINO: Your Honor, I would like to mark the proof of claim of Ms. Sturman in the Howard Sturman estate as Sturman 2.
THE COURT: Okay.
(Proof of claim of Donna Sturman marked Sturman Exhibit 2 for identification as of this date.)
Q. Do you recognize what is marked as Sturman’s Exhibit 2?
A. Yes, 2.
Q. Could you tell us what it is?
A. It is a copy without the 9 to 12 inches. . . inches of additional paperwork of the proof of claim filed by Donna Sturman in the Howard Sturman case and my recollection is that there were essentially the same proofs of claim filed in the Wayne and the Bruce cases as well.
Q. If you would turn to page 2, Exhibit A. What is the amount of the claims as stated?
A. At least $20 million.
Q. Could you tell us what Exhibit B purports to be?
A. I believe Exhibit B purports to be entities in which Donna Sturman asserts that she has an interest.
Q. If you would go to the second page of Exhibit B and the subsequent pages.
A. Yes.
Q. The basis for Donna Sturman’s interest in certain entities or properties as set forth; is that correct?
A. Yes, there are bases for Ms. Sturman’s asserted interests.
Q. And no less than 16 times did Ms. Sturman assert a constructive trust; is that correct?
A. I will have to count them.
Q. I will represent to you it is 16. But you would agree would you not, that certainly on numerous entries she asserted constructive trust?
A. That is correct.
Q. And the next-to-the-last page of the exhibit is an index of Exhibits C through N to the Proof of claim; is that correct?
A. That is what it asserts to be.
Q. And you would agree that that index represents that the State Court pleadings filed by Ms. Sturman against her brothers as incorporated in the proof of claim?
A. Yes.
Q. To your knowledge, did Donna Sturman ever release any of her claims against any of her brothers?
A. Not to my knowledge.
Q. To your knowledge, has she consistently throughout these proceedings asserted a constructive trust?
A. She asserted constructive trust theories going back to March 1992 and there was no time upon which she withdrew those claims of constructive trust.
Q. To your knowledge, did anybody else in this proceedings, any other creditor assert a constructive trust?
A. Such as Chase or Boston Safe?
Q. Yes.
A. They have not, to the best of my knowledge, asserted a constructive trust; certainly, they haven’t pursued a constructive trust, correct. They have pursued no constructive trust, correct. They have pursued no constructive trust theory to my knowledge.
Q. And you have no seen any document, have you, that has been filed in this proceeding in which Chase or any other creditor attempted to trace proceeds?
A. There is none that I could recollect.
Q. If Donna Sturman’s constructive trust theory were to be valid, what…would that mean I terms of the impact upon the estate?
A. It would be enormous.
Q. In what way?
A. As I understand it, Ms. Sturman asserts through her constructive trust theory hat she would be entitled to somewhere in the neighborhood of 8 to 12 to $1 million, predicate upon that theory as equity, as it were of the brothers’ properties and that if, in fact, Ms. Sturman were correct or her theory was indeed proven, it would be approximately $5 million in cash that existed at the time of the filing of the bankruptcy cases would be a fund upon which Ms. Sturman would be able to attach in connection with her allowed constructive trust claim, fees which had been paid to professionals and disbursements which had been made to creditors may be subject to disgorgement requests or litigation. It would be absolutely enormous. Not to mention the obvious cost that would be assumed by the estates, Ms. Sturman and others in connection with that litigation the time that would be involved.
Q. In fact, there might be disgorgement that would be required; would there not?
A. I just testified to that.
Q. Throughout the course of this proceeding, you did do a certain amount of investigation, did you not, to try to determine the purpose for which loans had been made prepetition?
A. Yes.
Q. In fact, you filed a complaint objecting to the grant of discharge of Bruce Sturman; did you not?
A. Yes.
Q. And in that complaint, you set forth a factual basis concerning the Cooper stock and margin calls, correct?
A. I believe so, yes.
MR. GUARINO: Your Honor, can I mark the complaint as Sturman Exhibit 3, please.
THE COURT: You may.
(Complaint marked Sturman Exhibit 3 for identification as of this date.)
MR. GUARINO: May I hand this to the Court?
THE COURT: Yes.
Q. Mr. Goldberg, let me be blunt about it. To the extent Mr. Parry was implying that you had no knowledge or did no investigation concerning the purpose for certain loans, he was incorrect; was he not?
A. Yes.
Q. In fact, if you will turn to Sturman Exhibit 3, page 11, paragraph 49 and 50. You allege there, do you not, that the Bank of New York loan and the Chemical Bank loan in the aggregate amount of $1,150,000 was used to repay the margin debt, correct?
A. Yes.
Q. Throughout this complaint you referred to the fact that there was margin debt and the margin debt was being called?
A. Yes.
Q. And as a result of that margin debt being called, loans had to be obtained, correct?
A. Yes.
Q. So I assume you had some factual basis for filing this complaint, correct?
A. I hope so.
Q. Let me refer you to paragraph 26 on page 7. Do you see that you state in the Butler action the Court issued injunctive relief to Ms. Butler in enjoining Sturman regarding certain family-owned enterprises?
A. Yes.
Q. Ms. Butler is defined as Donna Sturman, correct, earlier in paragraph 23?
A. Ms. Butler, as I understand, is the other party to the settlement agreement that is being proposed in this matter and that is Donna Sturman.
Q. Could you explain to the Court what you meant here in paragraph 26?
A. There was a stay in Court that granted Donna Sturman injunctive relief in connection with a certain interfamily dispute.
Q. Was that in connection with a complaint she filed against her brothers?
A. A complaint, yes.
Q. Am I correct that the basis of that complaint, at least in part, was fraud and diversion of assets?
A. Yes, to the best of my knowledge.
Q. Do you know, are you familiar with the standard of granting injunctive relief?
A. As an attorney, yes I am.
Q. As I correct that to obtain injunctive relief one must show a probability of success on the merits?
A. A likelihood of success, as I understand the language.
Q. What was the basis of your objecting to the grant of discharge of Bruce Sturman?
A. Fraud. Let me just go over the document, if I may. It sets forth on page 4, intent to hinder, delay, defraud his creditors, he transferred to property, he concealed, destroyed or failed to keep vital records and that in connection with her bankruptcy case he made false oaths and accounts.
Q. As Trustee, you took charge of the Debtors’ books and records which bear upon the finances of the three brothers?
A. As best I was able to.
Q. Am I correct that there are prepetition books and records which bear upon the finances of the three brothers?
A. There are some, yes.
Q. On their financial statements?
A. There are.
Q. On their tax accounts?
A. Yes.
Q. On tax returns?
A. Yes.
Q. On banking records?
A. Yes.
Q. In determining to present this settlement to the Court did you consider whether from the documentation available there would be an ability by Donna Sturman to prove her case?
A. I didn’t limit it to the documents that are presently available. I believe there may be other documents that would be obtainable, certain bank documents and other related materials as well as the documents which do exist which would assist Ms. Sturman in proving or not proving her claims.
Q. Are you aware of anything which would form a belief on your part that it would be impossible for her to prove her claim?
A. I think it would be difficult for all of us to go through that process, but I don’t believe it would be impossible for her to prove it.
Q. To your knowledge, has Donna Sturman been afforded discovery?
A. In connection with the claims asserted in the constructive trust?
Q. Right.
A. I don’t believe she has either been engaged or sought discovery I connection with those claims or if she has, she hasn’t yet proceeded.
As your records in these cases evidence, it was in fact Mr. Goldberg and his counsel who continued the sale, transfer and diversion of assets and property from me, knowingly and willingly violating pending New York State and Surrogate Orders, which barred him from doing so.
The Trustees’ counsel, Mr. Spielberg also testified at the same July 3, 2001 hearing. Tr.105-111:
“I would say that no serious person could maintain that Donna Sturman was not badly wronged and damaged and hurt in a variety of ways by her brothers prior to these cases being brought.
She filed a $20 million claim and that claim talks about constructive trust and the Trustee has filed objections. I think, Judge, I signed my name to those objections, and I believe I did my job as a lawyer, and I am not ashamed of it, to have signed my name to an objection to say that Donna’s claim should be no more than a million dollars. ….
But no lawyer is any better than the case he has got and no claim or objection to a claim is any better than the acts of law and circumstances and context in which it is presented.
In making this settlement, the Trustee has determined finally to reject the myopic view of Donna Sturman’s claims that have prevailed here for at least a decade. He has confronted the reality of the fact that Donna Sturman has a claim and has a significant claim and that claim is serious enough and large enough and frightening enough to make a very substantial payment to her justified. The basis for that claim, the basis for his judgment and the reason was in his judgment that it met the lowest level of reasonableness in making the settlement, and the reason the settlement should be granted is that there are substantial and meaningful and undeniable justifications for Donna’s claim. She has presented and there is evidence and there are indications that in the period before the filing of these cases her property interests were evaporated by her brothers. It appears likely that the claim she makes that the $6 million or 5 or $6 million of cash that the Trustee came into possession of at the beginning of the cases were proceeds of the liquidation of Donna’s assets. If that is so, we believe that you would permit Donna to make a claim of constructive trust. If that happened Donna would wipe out the estates. There would be disgorgement and there would be mayhem in the final stages of these cases. It has been shown that the Muriel estate was evaporated, defrauded, and emaciated and defalcated by her brothers. It is clear that Donna has a prima facie claim to take the entire Muriel estate. Would she ultimately prevail in that claim, that is not to be determined on this proceeding. Would she ultimately prevail on the constructive trust claim? That is not to be determined in this proceeding. The law is very clear that Your Honor is not to be a trier of the facts on the underlying claims. We have put before you the considerations and it’s in our motion and I needn’t remunerate the considerations that were decided and determined and have been followed out in re: Best Products.
With respect to the administration of this estate and the potential for claims that Donna could make as a result of it, I remind Your Honor that Donna and the Muriel estates in which Donna probably has a 100 percent interest or may have that interest, owned between 25 and 50 percent of a $16 million asset which over ten years they received zero return upon. The Trustee in doing his job, in following Your Honor’s order to run that property in derogation of the property rights of the Donna and the Muriel estate. There can be no dispute to that. The argument, if this is the argument that Mr. Parry was inferring or will make when he closes, the argument that because Your Honor issued an order that gave the Trustee the right to run the property, he exculpated the estates from the claim of property rights is just absurd. It is unconstitutional. It is an unlawful, unconstitutional taking of her property without compensation. You can’t do that. Nobody can do that. She has a claim. We used her property without paying her for ten years. That claim if this settlement is not approved, that claim will be made here. That claim will be heard by Your Honor, and it worries me because it is real and it is clear.”
Furthermore, the Trustee bought the mortgage, paid himself, in essence, an above market interest rate in derogation of the rights of Donna Sturman and Muriel Sturman. Was that technically legal? Sure. There was an order that permitted him to do it. Is it right? Will it stand up? Will it beat scrutiny in litigation? Who knows. Likely not.
In conclusion, Judge, I ask you not to focus on the objections that were filed.
I ask you not to focus on the myopic arguments that are made against Donna Sturman’s claims. What I ask you to focus on, Judge, is this: In addition to the factors that are incumbent upon you to address, remember this in terms of Donna’s constructive trust claim and the other unliquidated claims she makes, there is no real question that she has an entitlement and she deserves to be paid for them. The constructive trust claims could wipe out the estate.
That being the case, the question is not whether it is 2 million or 3 million or $3,735,000 that should be paid. The question is whether in the Trustee’s reasonable judgment he has brought before you something that meets this very low standard and I ask you, Judge, to find that he has and it is appropriate in this case that this settlement be approved.
Did your office not find it at all suspect that I could be placed into an involuntary bankruptcy less than a year later without notice or service to me or my counsel? I think you will agree with me that based upon the testimony above, it is clear that instead of finally giving me what was already rightfully mine, it was determined that the parties to these cases would use other means to justify their conduct. Or is it the policy of your office that because the Trustee failed to do his job and the Court abused her jurisdiction and powers, that I walk away from my inheritance and allow the Trustee and others to have it?
The circumstances of the involuntary petition filed against me without notice or service to me or my counsel, by my previous counsel Pollack & Greene, based on the circumstances and pattern consistently used against me, acts taken without service, or service to a wrong address, is clear was just a continuation and “related to” what could not be accomplished against me in my Brothers cases.
Mr. Nisselson had before him numerous pre-petition claims filed by me and during the course of the Sturman Brothers proceedings that were based on other counsel review before filing them; as such he had a fiduciary duty to not become a party to these claims and cannot claim that he was not aware of them. Instead Mr. Nisselson knowingly and willing chose to aid and abet the Sturman Brothers Trustee, his agents and the institutional creditors in their fraud.
Instead of fulfilling his fiduciary duties to report such fraud and that the Involuntary filed against me was not filed in good faith or that I could even be insolvent Mr. Nisselson not only chose to aid and abet in fraud, obstruction of justice false statements false filings use of stolen embezzled property and assets not belonging to debtors estates and to use such proceeds to satisfy his fees and expenses.
Even after orders for relief were supposedly entered against me on or about May 14, 2002, my counsel filed an objection to another collusive settlement the Trustee was making with one of the executors of my Mothers estate for his “silence” 3 days later. (and approved by Judge Beatty in violation of her jurisdiction and pending Surrogate Court orders). Those Orders also prevented the sale of the so called “86th Street” Yorkville Associates partnership property that I was stripped of. Still no one raised any objections or questioned how or why I could be placed into what obviously an collusive fraudulent involuntary “related to” proceeding?
In the adversary please note and this is also referred to at the July 3, 2001 hearing, at the start of these cases Mr. Goldberg had turned over to him $6.25 million that did not belong to the debtor’s estates, money that also belonged to me. I would once again like to understand how and why Mr. Goldberg and his law firms have had at their disposal and been permitted to use non debtor properties and assets over my objections as their own personal “piggy-banks”?
I don’t understand why in another case before the same Judge your office objected to this ( In re Palm Coast: Matanza Shores Ltd. Partnership) and yet it was okay for the Trustee to shop the Sturman Brothers Cases around so everyone could profit at my expense?
In fact at a July 15, 1996, hearing the Bankruptcy Court stated the following:
THE COURT: The fact of the matter is it is also the trustee’s duty to determine who the owners are. Remember, the trustee here is in a very unusual position. He was given authority to manage properties that he is not the direct owner of. The result is that the trustee always has the duty under the Code to turn over property to the true owner. This is not about trying to make bucks for the law firm. It is not about trying to pay off the big creditors. It is about trying to create an estate to be disbursed to whoever it rightfully belongs to Tr. 15.
There were numerous documents and evidence including in my Brothers criminal trial that the loans made to my Brothers were not made according to banking policy and could be voided by me. And yet those lenders have been allowed to use our courts systems to intentionally strip me and my children of my inheritance and property and cause severe emotional and financial damage.
How is it that I could be intentionally kept impoverished, numerous threats and then put into bankruptcy and then to top it off I don’t even get a discharge?
And lastly I would like to understand how a bankruptcy Judge with no jurisdiction over properties and assets is allowed to give her approval to all of this, allow these cases to be prolonged and finally when she has serious adversary complaints filed just ignore them, approve collusive settlements, and then 3 years later (even though fully brief and awaiting a decision from her) dismiss that complaint for lack of prosecution?
I was under the impression when I reserved my rights by notice to the Court on May 9, 1991, and thereafter, I had rights, and yet to date they have continually been trampled upon. Including disability rights, in which the law firm that filed the collusive false involuntary petition against me had a full and detailed medical account of and what the effect of prolong stress has on me. Am I not afforded the same constitutional, civil, disability and equal protection under the law rights as other parties?
The collusive involuntary proceeding filed against me has caused my children and me, extreme and ongoing financial and emotional damage, this is in addition to the damages my Brothers cases have caused.
Although I was under the impression that bankruptcy was to be used to give an” honest debtor a fresh start”, nothing could be further from that in these cases. Instead my children and I have been subjected to what could only be viewed as an ongoing attempt to give me nothing more than a “smelly finish”.
While I may not be as “sophisticated or education” as the parties to these cases are, I know there is something wrong here that another “related to” collusive involuntary can not just make disappear as if it never happened. I would think it falls under the category of continuing and aiding and abetting in bankruptcy fraud.
At this time I request a full and detailed account of all property and assets that have come into these cases,(not unaudited), but audited, and how the Trustee has been permitted to hold and use property and assets belonging to the Estate of Muriel Sturman, for which I am a beneficiary. (And no release or settlement has the authority to permit Surrogate Court Orders to be violated from filing an outstanding compulsory accounting).
I would truly like someone in your office to explain to me, in writing within (10) days of receipt of this letter, how all of this is acceptable and allowed by your office. To date I have never received any explanation from anyone, so that I may proceed accordingly.