Moohaven Dairy LLC filed bankruptcy in the Eastern District of MI, Northern Division, requesting legal representation from Attorney Dale Cubitt.
The primary secured creditor Bank of America was granted relief from automatic stay, which permitted them to get an Order against non-debtors in the County Circuit Court.
Under 11 U.S.C. Sec. 327 the Bankruptcy Court found Attorney Cubitt ineligible to represent Debtor Moohaven. Following that the Court determined “this bankruptcy estate required the appointment of a Chapter 11 Trustee”, effectively removing Debtor’s ability to hire any counsel during the bankruptcy.
Upon the Court’s denial of his appointment Attorney Cubitt was immediately stopped from representing Debtor, even to volunteer services.
Attorney Cubitt was otherwise not restricted from representing any other individuals in the local Circuit Court, concerning the lift of stay in contention.
Some time after the denial to be counsel, Attorney Cubitt filed a Motion to Set Aside Judgment (which had lifted the automatic stay) with the County Circuit Court. The Motion was filed on behalf of several defendants, including Debtor Moohaven, counter to the Bankruptcy Court finding. Attorney Cubitt’s actions were then without the authority of the assigned 11 Trustee.
This confusing activity forced Bank of America to expend substantial effort. Their culminating response in Bankruptcy Court was to file a Motion for Temporary Restraining Order pertinent to Attorney Cubitt, and request damages.
After an evidentiary hearing on this, the Opinion from the Bankruptcy Court was that Attorney Cubitt improperly represented Debtor Moohaven without authority in filing the Motion to Set Aside Judgment. Fees were assessed resultant from this impropriety.