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Lloyd Ward & Associates Filed Bankruptcy Rather Than Settle Its Own Debt. Kind of Ironic.

Under the same heading of people sending me all sorts of stuff about Lloyd Ward, the debt settlement attorney in Dallas, Texas, I got one of these documents below last week and that sent me off today to learn more about what was alleged. I’m not going to write about the documents below but I’ll just post them here so they don’t get lost. Frankly I’m tired of writing about Lloyd Ward.

Here was what was in the original document sent to me that caught my attention.

The court says: Ward defends his conduct and the value of his services to the Debtor by pointing to the imminent problems with Fleet and Colonial, which he claims would have resulted in Colonial’s foreclosure on the Plano Property and the loss of equity in the Plano Property to the Debtor in any event. The Court has adequately addressed the problems with this contention in the Contempt Memorandum Decision. See docket # 580 at pp. 20-22. Moreover, Ward’s testimony during these hearings was simply not credible. He was evasive in answering questions, his memory was convenient at best, and his testimony was often impeached by the documentary evidence.Source

That made me want to look into the matter and try to figure out what actually happened.

Case Documents:

What you see above was originally added as a footnote to another story from last week. But more information just rolled in that made this a post unto itself.

The information below is new research as a result of the discovery of the previous bankruptcy filing for Lloyd Ward & Associates, PC that was brought to my attention.

On January 15, 2004, as the extent of the fraudulent conduct that had occurred in this case was becoming clear, the U.S. Trustee filed a Motion to Disgorge Fees and Disqualify Lloyd Ward from Representing the Debtor and Reorganized Debtor (the “Disgorgement and Disqualification Motion”). – Source

The U.S. Trustee alleged:

  1. Network Cancer Care, L.P. (hereinafter, “debtor”) filed its voluntary chapter 11 petition on October 26, 2002. The debtor is an entity controlled and managed by Dr. Odette Campbell, M.D., and its business is to administer cancer treatment. There was no creditors’ committee in the case.
  2. About one year after the debtor filed its bankruptcy case, the Court confirmed the debtor’s Modified Second Amended Chapter 11 Plan (hereinafter, “Plan”) on September 26, 2003. The Plan created “Reorganized Network” (hereinafter, “RN”) and transferred all assets and liabilities to RN.
  3. About a month after the Court confirmed the debtor’s Plan, RN moved to replace its counsel with new counsel, Lloyd Ward. The Court granted the request on November 13, 2003. Prior to filing his motion to substitute as counsel, Mr. Ward had filed an adversary proceeding and other pleadings on behalf of the debtor and RN.
  4. On November 20, 2003, pursuant to the terms of the confirmed Plan, the Court issued its order selecting the new Reorganized Network, Chief Executive Officer, or “RNCEO.” However, the selected individual contacted the Court subsequent to his “appointment” and informed the Court that he knew not about the particular assignment. Mr. Ward informed the Court that individual subsequently met with Dr. Campbell and made a final determination that he could not provide services as required.
  5. At the Court’s Show Cause hearing, Mr. Ward revealed the following:
    • The debtor did not have an RNCEO operating the debtor as required by the Plan;
    • The RN transferred its only real property asset, valued at about $2.5 million, to an entity owned and/or controlled by Dr. Odette Campbell, and did not comply with the terms of the Plan before the transfer. The debtors’ Schedules averred that this property had equity of about $600,000, yet no money was paid to RN for the property.
  6. Subsequent to the Show Cause hearing, the United States Trustee became informed and believes, from reviewing property records, that the debtor, with the legal assistance of Lloyd Ward, transferred all of its real property to “Plano Cancer Network, L.P.” (hereinafter, “Plano Network”) on November 24, 2003.
  7. State of Texas documents filed November 12, 2003, show Lloyd Ward as the initial
    registered agent for Plano Network. The State of Texas documents reflect that Odette
    Campbell and Roger Good are Plano Network’s only general partners.

  8. State of Texas documents show that, at about the same time Lloyd Ward formed Plano
    Network, he incorporated “Plano Cancer Care Management L.L.C” for Odette Campbell.

  9. Debtor’s new counsel, Lloyd Ward formed a corporation and a limited partnership for Dr. Campbell and caused the transfer of valuable property out of creditors’ reach. Those new entities now own and control RN’s most valuable asset, its real estate, and may be consuming its current receivables as well. The United States Trustee submits that Mr. Ward does not have the best interest of the debtor or reorganized debtor foremost in his acts.
  10. Dr. Campbell knew that RN did not have the requisite RNCEO operating the company and setting her salary, yet she continued to deceive creditors and the Court by ignoring the operating provisions of the Plan. She failed to appear at a Show Cause hearing about the Plan after the Court ordered her to appear personally. Mr. Ward’s actions and inactions aided Dr. Campbell’s misdeeds.
  11. State of Texas Bar Rule 1.06 states that a lawyer shall not represent a legal entity if the representation involves a substantially related matter in which that entity’s interests are materially and directly adverse to the interest of another client of the lawyer. Rule 1.06 further states that, the lawyer shall not represent a legal entity if the representation appears to be or become adversely limited by the lawyer’s responsibilities to another client. The State Bar Rule requires the lawyer to withdraw if such conflicts exist.

The United States Trustee submits that Mr. Ward has an irreparable conflict and cannot represent the debtor or reorganized debtor. He has prepared organizational papers for what appears to be a competing business and caused the transfer of the debtor’s valuable asset out of the debtor’s ownership. Clearly, the debtor/RN has adverse interests to that of Dr. Campbell and her new entities. – Source

After a bunch of back and forth legal wrangling and an appeal to prevent the repayment of $60,000+ in legal fees, the fees had to be paid back.

Subsequently, Lloyd Ward & Associates, PC was unable to settle the debts now owed and the law firm filed for a chapter 7 bankruptcy on March 3, 2006.

The bankruptcy filing was signed by Lloyd Ward as president of Lloyd Ward & Associates, PC.

Documentation of the bankruptcy filing showed $750 in assets and $73,876.38 in liabilities.

Unsecured creditors were listed as the IRS ($11,578.66) and the bankruptcy trustee in the above mentioned case, for $62,297.72.

According to the filing, Lloyd Ward personally paid $7,500 to his attorney to file this bankruptcy for Lloyd Ward & Associates, PC. – Source

The bankruptcy discharge was never granted according to court records. According to court records, the discharge was not applicable and the case closed on April 18, 2006.

Lloyd Ward & Associates Filed Bankruptcy Rather Than Settle Its Own Debt. Kind of Ironic.

Granted this all happened before Lloyd Ward & Associates got into selling debt settlement to consumers but the irony here of course is that Lloyd Ward & Associates filed bankruptcy itself rather than settle the debts it owed. And that’s the part that made this an interesting little news story.

Lloyd Ward & Associates Filed Bankruptcy Rather Than Settle Its Own Debt. Kind of Ironic.
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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Guest

    Didn’t you file bankruptcy?  and you ran credit counselling, kind of ironic you did not settle your debts.  And your company made some of the exact claims that you destroy companies for now. That is ironic.  Your former company also charged sometimes 5000 upfront for programs before ANY work was done, amazingly ironic.  I have a great portfolio of screenshots of your former websites before you scrambled to take them all down off the way back machine. Contracts, quotes, and many other business related items that shall we say shows you operated very similar to the very people you now bash or even some would say slander.  But that is for the court to decide but it is ironic.   Amazing how hypocritical you are. 

    • http://GetOutOfDebt.org Steve Rhode

      You are right, it is ironic.

      When I was going through my troubles in 1989 nobody ever mentioned debt settlement to me, I’m not sure if anyone was actively settling debt. But that’s before we had things like the internet to research and find stuff.

      Looking back, for me, bankruptcy was the better solution in the long run since credit counseling had already told me they could not help.

      I think we had a program that was $3,000. If we had a more expensive program it might have been for the inpatient spending addiction treatment program we had with our staff psychologist.

      Our $3,000 program was an intervention program with creditors. In the end the program did not work as well as we hoped and we stopped it. The big difference is we gave refunds and didn’t trap people into a corner.

      If you have those screenshots and stuff I’d be very grateful if you can send them to me. I’ve been planning on writing an article about what I learned from those days. What you and other fail to realize is that the reason I have the perspective I do is because I was there.

    • http://GetOutOfDebt.org Steve Rhode

      Got my article written and queued up for Monday. Thanks for the push to write it.

      I even used your line as the title, “Amazing How Hypocritical You Are” and link back to your comment in it.

    • http://GetOutOfDebt.org Steve Rhode

      And here is the link to the article I wrote as a result of your comment. Thank you.

      See http://getoutofdebt.org/39158/amazing-how-hypocritical-you-are-steve-rhode

    • http://GetOutOfDebt.org Steve Rhode

      Someone just brought to my attention that I posted and article about this stuff in 2010. You can read that here. http://getoutofdebt.org/22076/how-to-sell-debt-relief-what-i-learned-and-wish-i-hadnt-from-the-front-lines

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