Law Firm Sanctioned for Mishandling Debtor’s Chapter 7


• UpRight Law LLC nothing more than “referral service,” violating Louisiana Rules of Professional Conduct

• Law firm must disgorge all fees paid by debtor, and pay civil penalty of $5,000 for negligence


UpRight Law LLC must refund all fees and pay a $5,000 civil penalty for negligently handling a debtor’s Chapter 7 case and violating the Louisiana Code of Professional Responsibility, the U.S. Bankruptcy Court for the Western District of Louisiana held.

“This case is an unfortunate tale of attorney delay, promises to a client made by counsel but not kept, deception, and professional negligence,” Judge Jeffrey P. Norman wrote Feb. 2.

A 90-day suspension for Lillie Banks’s attorney Andrea Augustus, and UpRight Law from filing any case in the Western District of Louisiana, are appropriate sanctions, the court said.

It’s a cautionary tale, especially for rural debtors like Banks relying on a “virtual multijurisdictional law firm” like UpRight Law to handle their bankruptcy case.

Chicago-based UpRight Law’s business model is “primarily a marketer of legal services” and never provided Banks with any real service, the court said.

Banks retained UpRight Law, taking more than four months to file her case. But it was dismissed three days later because UpRight Law failed to file Banks’s required credit counseling certificate.

UpRight Law made errors in attempting to reinstate Banks’s second bankruptcy case, which was also dismissed due to UpRight Law’s negligent failure to file required documents.

The U.S. trustee sought sanctions on Banks’s behalf against UpRight Law and Augustus after a two-year saga.

UpRight Law is “nothing more than a referral service” that solicits clients and refers them to local attorneys called “partners” who maintain their own practices, the court said.

Neither Augustus nor UpRight Law kept Banks appropriately informed of the status of her case, and repeatedly gave her wrong information, the court said.

The written contract with UpRight Law was void because it was never executed by a Louisiana licensed lawyer, the court said.

The Augustus Law Firm LLC, New Orleans, represented Banks; Trustee John W. Luster, Natchitoches, La., represented himself; U.S. Trustee Richard Drew, Office of U.S. Trustee, Shreveport, La., represented himself.

The case is In re Banks, 2018 BL 40262, Bankr. W.D. La., No. 17-10456 Chapter 7, 2/2/18.

To contact the reporter on this story: Diane Davis in Washington at ddavis@bloomberglaw.com

To contact the editor responsible for this story: Jay Horowitz at jhorowitz@bloomberglaw.com