Upright Law Sanctioned for Improper Bankruptcy Filings

Upright Law LLC, an embattled Chicago firm claiming to have a national bankruptcy practice with more than 400 “partner” lawyers, was sanctioned by a Pennsylvania bankruptcy court for filing bankruptcy petitions without the debtors’ signatures.

Upright and Kevin Tanribilir, its regional partner, have to pay the attorneys’ fees for William G. Schwab, the Chapter 7 trustee in six separate cases who sought the sanctions.

The specific dollar amount of the sanctions will be determined at a future hearing before Judge John J. Thomas of the U.S. Bankruptcy Court for the Middle District of Pennsylvania.

Thomas also ordered Upright and Tanribilir to prepare a “10 page Memorandum of Law” on the requirements of Bankruptcy Rule 1008, to be circulated to all of Upright’s affiliated “partners.” That rule requires that all bankruptcy petitions must be “verified” by the debtor, by signature under penalty of perjury.

The trustee asked for stronger sanctions, including a temporary ban from practicing in the district. The lawyers’ work was “subpar,” and Upright was allowing unlicensed people to provide legal advice, he said.

Thomas declined to make any findings that Upright was practicing before the court without a license, because there was insufficient evidence before him, he said. The debtors didn’t testify in the proceedings.

Other courts have penalized Upright for the unlicensed practice of law.

Tanribilir testified that in at least three of the six cases, he hadn’t received “wet signatures” from the client debtors before filing the bankruptcy cases. The clients authorized him to sign the documents on their behalf, he said.

But Bankruptcy Rule 1008 requires the debtor’s signature on the petition, and Rule 9011 gave Thomas the authority to issue sanctions for submitting unsigned petitions, he said.

Schwab was represented by Eric J. Filer, Lehighton, Pa. Kevin Tanribilir, Berwick, Pa., appeared for Upright Law and on his own behalf.

The case is Schwab v. Tanribilir (In re Klitsch), 2018 BL 209889, Bankr. M.D. Pa., No. 5-17-bk-02271, 6/13/18.