Educate All Students: Larry Miller's Blog

October 8, 2011

U.S. Trustee’s Office Accuses Lawyer of Bungling Case Concerning Michael Bonds

Filed under: American Injustice — millerlf @ 2:20 pm

Mr. Bice, is this not a vindication of  the insinuations you heaped on Michael Bonds in your past opinion column?

By Daniel Bice of the Journal Sentinel Oct. 7, 2011

School Board President Michael Bonds’ bankruptcy filing has been anything but ordinary.

Now it is taking another unexpected turn.

The, which monitors bankruptcy cases, is suggesting that Bonds may have been misled and poorly represented by his former lawyer, Kenyatta Riley.

“Based on Mr. Bonds’ testimony (under oath), Mr. Riley neither fairly represented nor acted in Mr. Bonds’ best interest,” wrote Michelle Cramer, an attorney with the trustee’s office.

Unless Riley can show otherwise, Cramer asked the bankruptcy judge to order the lawyer to refund all $1,300 in legal fees paid by the veteran School Board member.

Riley didn’t return numerous phone calls. He also refused to meet with No Quarter at his office Thursday, telling a secretary that he was too busy to chat.

Bonds, who oversees a billion-dollar budget for more than 87,000 students, filed for Chapter 7 bankruptcy in late May. He listed assets of $242,490 and liabilities of $331,375.

Earlier this year, the 52-year-old school official placed much of the blame for his financial troubles on his wife’s cut in pay, even though he filed the petition alone.

Kathy Bonds had been the principal at Custer High School, but she was reassigned to an elementary school in December, a move that trimmed her pay. For the 2010-’11 school year, her salary without benefits was $125,964, according to the state Department of Public Instruction.

Earlier this year, Cramer asked the judge to toss Bonds’ bankruptcy filing, accusing him of acting “in bad faith” for giving apparently misleading statements about his wife. She also suggested Bonds also submitted inflated or inaccurate numbers in his petition.

Last month, U.S. Bankruptcy Judge James Shapiro granted the request to drop Bonds’ Chapter 7 bankruptcy filing. That type of bankruptcy allows someone to walk away from having to pay most unsecured debts such as credit card balances.

But Shapiro then allowed Bonds to file for bankruptcy under Chapter 13, which permits someone to reorganize their debts and pay most of them off over several years.

“Mr. Bonds stated it was always his intention to file a Chapter 13 because he wanted to repay his creditors,” Cramer wrote in her filing. But Bonds said Riley told him that he would be “better off financially” if he went with a Chapter 7 bankruptcy.

Bonds also told the trustee’s office that he informed Riley of his marital status. His initial filing said he was legally separated from his wife.

The two had gone to court in 2006 and gotten a legal separation. But the two reconciled a year later and now live together. They never asked the court to rescind their separation, however.

“It was never his intention to misrepresent he and his wife’s living situation,” Cramer wrote. “Although legally separated, it was not his intent to portray that he and his wife maintained separate households.”

Bonds told the trustee’s office in sworn testimony that he promptly provided Riley with information responding to complaints about the initial bankruptcy filing. But most of those documents, Bonds said, were never filed with the court or sent to the trustee’s office.

Also, Bonds said he inquired about the option of changing his case to a Chapter 13 bankruptcy. Staffers at Riley’s firm – Eisenberg Riley & Zimmerman – said it would cost him another $481.

“Mr. Bonds balked and stated that was what he wanted in the first place and he was not giving the firm any more money,” Cramer wrote.

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