Skip to content

Loeb & Loeb Achieves Victory for a Pro Bono Client in the Bankruptcy Court

Loeb recently secured a remarkable pro bono victory for a debtor who had been sued in her bankruptcy case by a creditor seeking to except a large debt from her bankruptcy discharge.

Prior to Loeb’s involvement, the debtor filed a personal Chapter 7 bankruptcy case in the United States Bankruptcy Court for the Northern District of Illinois. A home remodeler that had been retained to repair the debtor’s property filed an adversary proceeding opposing discharge of the amounts it claimed were owed under a contract. The home renovator claimed that the contract had been induced by the debtor’s allegedly fraudulent statements, and therefore, under the bankruptcy code, that debt was non-dischargeable.  

At the outset of the litigation with the creditor, the debtor represented herself pro se.  The presiding bankruptcy judge recognized that justice required assistance for this debtor.  At the judge’s request, the Bankruptcy Court for the Northern District of Illinois’ Volunteer Attorney Panel recruited Loeb to represent the debtor.  As Loeb entered the case, it appeared the debtor would have an uphill battle obtaining the discharge she was seeking, and the plaintiff believed it was in a strong position to negotiate repayment of the debt.

The case proceeded through two years of active litigation, including amended pleadings, motions practice and significant discovery.  Through its efforts, including in connection with a hard-hitting all-day deposition of the creditor’s senior executive, Loeb was able to demonstrate that the creditor’s claims were entirely without merit.  And while the case was pending, the bankruptcy court scheduled a court date to impose sanctions on the plaintiff for a series of calamitous discovery abuses that Loeb had called to the court’s attention.  
With no hope of success on the merits and the threat of very significant monetary sanctions, the plaintiff fully capitulated.  Loeb’s legal team negotiated a settlement that was nothing short of a complete victory.  The plaintiff agreed to fully dismiss its claim for an exception to the discharge, with no money due or owing from the debtor.  
The Loeb legal team was pleased to get a fresh start for this honest debtor who needed legal counsel for her defense.  After years of litigation that could have resulted in financial ruin, the client celebrated this much-deserved victory, stating that it would assist her in helping her daughter pay for college.  
Loeb’s pro bono team for this matter included Noah Weingarten, Laura McNally, Daniel Besikof and Amber Ordonez.
More details about Loeb’s pro bono efforts are available here.