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.
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:
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
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.
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