CHARLOTTE - Asbestos lawyer Marcus Raichle Jr. of St. Louis objected to an allegation that he and others have abused bankruptcy trusts so badly that future claimants will collect a fifth of what past claimants received.
Raichle posted the objection on the docket of bankruptcy judge Laura Beyer on April 17 in response to a letter she received from California lawyer Michael Mandelbrot.
Raichle called Mandelbrot’s letter salacious.
A committee of plaintiff lawyers employed that adjective last year to describe 221 cases that Georgia Pacific debt entity Bestwall provided to Beyer.
The cases support Bestwall’s theory that estimation of future asbestos liabilities should account for past fraud.
In January, Beyer denied a motion of the plaintiff committee to exclude the case files.
Mandelbrot sent her a letter on March 25 claiming asbestos lawyers coordinated destruction of documents in trusts to evade her rulings.
He claimed they conspired to “forever conceal thousands of fraudulent claims.”
He specifically accused John Simmons of Alton, Steven Kazan of California, and the Maune Raichle firm.
He identified himself as a 30 year asbestos lawyer who has fought criminal conduct at trusts for more than 10 years.
He attached document destruction notices he received from Delaware Claims Processing Facility, a manager of many trust funds.
He claimed document destruction in a Chapter 11 investigation is a felony.
He claimed lawyers misappropriated $5 billion to $10 billion from trusts.
“Every single asbestos disease victim from now until the end of time loses because of this coordinated criminal fraud,” he wrote.
Anyone can mail a letter to a judge but only the judge can make it public.
Mandelbrot later said in an interview that he didn’t expect to see his letter on the docket.
Nevertheless, Raichle’s objection on April 17 focused on procedure.
He called the letter a docket filing by Mandelbrot.
He claimed Mandelbrot wasn’t admitted to practice in Beyer’s court, didn’t enter an appearance and didn’t identify individuals he spoke on behalf of.
“To the extent that Mr. Mandelbrot is appearing pro se he fails to state what standing he personally has in this matter,” he wrote.
He claimed Mandelbrot accused his firm and clients of criminal conduct with regard to cases other than Bestwall.
“Rather than levy these extraordinarily serious accusations to the courts that have jurisdiction over those other trusts, Mr. Mandelbrot has chosen this court. Why?” he wrote.
He claimed anyone seeking equitable relief not otherwise in bankruptcy code must bring it by an adversary proceeding.
He claimed the code requires grounds for a motion to be set forth with particularity.
“The sweeping, salacious accusations in Mr. Mandelbrot’s filing wholly fail to meet the requirements of the rules,” he wrote.
He claimed it was impossible to respond to the allegations because Mandelbrot failed to explain their basis.
He claimed it was absurd “to suggest that our comparatively young firm, which only represents mesothelioma clients, is part of some illuminati secretly controlling the bankruptcy trust system.”
He stated his firm would respond fully if the court would like additional briefing.
Mandelbrot had mailed a second letter a day before but Beyer hadn’t received it at that point.
He sent a third letter on April 18 and Beyer posted the second and third letters on April 23.
His second letter thanked her for posting his first letter and asked her to deny compensation requests of future claimant representative Sander Esserman.
He claimed close relations between Esserman and Kazan invited coordination that should preclude Esserman from acting as fiduciary for any trust.
He claimed the coordinated concealment of exorbitant and grossly excessive payments from trusts involved Ankura Consulting.
He claimed Ankura provided declarations to Beyer that criminally concealed their interest. His third letter responded to Raichle’s objection.
“I am not seeking nor have I ever sought to be a party in the Bestwall case," he wrote.
He stated he wouldn’t object if any party or the court sought his testimony under oath.
He claimed the Justice Department disfavors a fiduciary working on more than one Chapter 11 trust but Kazan is a fiduciary at 30 trusts and Esserman is a fiduciary at more than 20.
He claimed Maune Raichle has been in business more than 20 years and has filed about 150,000 trust claims that have received favorable treatment.
Simmons and Kazan didn’t respond to Mandelbrot as of April 26 and neither did Bestwall.