Trustee Seeks Early Judgment in Miles Guo Bankruptcy Case
The Chapter 11 trustee overseeing the bankruptcy of Chinese exile Miles Guo has requested an early judgment from a bankruptcy judge in Connecticut. This request pertains to an adversary proceeding aimed at recovering nearly $243,000 in legal fees that were allegedly paid to Zeisler & Zeisler PC, the law firm representing Guo and his daughter.
Motion for Judgment on the Pleadings
In a motion filed on Friday, Luc Despins, the trustee, argued that the funds in question — presumed to be legal fees — are subject to clawback. This is because these payments were made to the law firm by shell companies linked to Guo, without the court’s approval, after his bankruptcy filing. Guo is also known by his other name, Ho Wan Kwok.
Details of the Transfers
According to the complaint filed by Despins in February and the firm’s response, Lamp Capital LLC and Greenwich Land LLC transferred a total of $242,917 to Zeisler & Zeisler between April and October 2022. Zeisler & Zeisler has denied the trustee’s claims and requested a dismissal of the complaint in May.
Grounds for Clawback
Despins explained in his memorandum supporting the motion that the transfers need to meet only two criteria to be voided: they occurred after the bankruptcy filing in February 2022 and were not authorized by the court. Since Zeisler & Zeisler acknowledges these facts, Despins contends that his case for recovering the funds is clear-cut.
Defense and Counterarguments
Despins refutes Zeisler & Zeisler’s defense that the payments were not made with funds from the debtor’s estate. He asserts that Lamp Capital and Greenwich Land are among the numerous shell companies used by Guo to conceal assets from creditors, including the funds used for legal fees. Despins has previously initiated adversary proceedings against these companies to have them recognized as alter egos.
Related Case Against Weddle Law
On the same day, a New York legal advocacy group submitted a reply brief in a related case where Despins is seeking to recover fees paid to Weddle Law PLLC. Despins has filed a $585,656 avoidance action against Weddle, a small law firm led by a former federal prosecutor, arguing that the firm should return fees received from postpetition transfers made by HCHK Technologies, HCHK Property Management Inc., and G Club Operations LLC — all alleged alter egos of Guo.
Amicus Brief Controversy
The New York Council of Defense Lawyers (NYCDL), which had previously filed an amicus brief supporting Weddle, responded to Despins’ motion to exclude the amicus brief. The council argued that Despins incorrectly suggested that the NYCDL should only be permitted to file an amicus brief if Weddle lacked competent counsel. The council also criticized Despins for attempting to exclude points raised in the amicus brief, implying that these points are crucial and potentially damaging to his case.
Implications and Precedents
The NYCDL warned that Despins’ case against Weddle could set a troubling precedent. The council contended that the underlying complaint implies that any legal work for clients involved in alleged wrongdoing, or even those who may have witnessed potential crimes, is inherently improper and that attorneys should not be compensated.
Recent Developments
In July, Despins lifted a stay on civil RICO and alter ego claims following Guo’s criminal conviction on various charges, including racketeering conspiracy and money laundering.
Legal Representation
None of the involved parties could be reached for comment as of Monday. The representation in the case includes:
- Zeisler & Zeisler PLLC: Stephen M. Kindseth and James Moriarty
- Miles Guo: Stephen M. Kindseth and James Moriarty of Zeisler & Zeisler PLLC
- Despins: Douglass E. Barron, Nicholas A. Bassett, Georg Alexander Bongartz, and Shlomo Maza of Paul Hastings LLP, along with Douglas S. Skalka, Patrick R. Linsey, Dennis M. Carnelli, James C. Graham, Lucas Bennett Rocklin, and Sarah N. Smeriglio of Neubert Pepe & Monteith PC
- Weddle Law: Jeffrey M. Sklarz and Kellianne T. Baranowsky of Green & Sklarz LLC, and Richard J. Corbi of The Law Offices of Richard J. Corbi PLLC
- New York Council of Defense Lawyers: Harry Sandick, Kimberly A. Black, and Folasade K. Famakinwa of Patterson Belknap Webb & Tyler LLP
Case Numbers
- Despins v. Zeisler & Zeisler PC: Case number 5:24-ap-5208, U.S. Bankruptcy Court for the District of Connecticut
- Despins v. Weddle Law PLLC: Case number 5:24-ap-5188, U.S. Bankruptcy Court for the District of Connecticut
- Adversary Proceedings Against LLCs: Despins v. Lamp Capital LLC, et al., case number 5:23-ap-05023, and Despins v. Greenwich Land, LLC, case number 5:23-ap-05005, U.S. Bankruptcy Court for the District of Connecticut
- Main Bankruptcy Case: In re: Ho Wan Kwok, case number 22-50073, U.S. Bankruptcy Court for the District of Connecticut
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