Skip to Content
Free Initial Consultation
Call Now 305-440-4006
Galanter Law, P.A. Galanter Law, P.A.

Call Now


Bankruptcy, an Adventure Into New Horizons!


I generally use this blog to write about criminal- and traffic-related issues so that the public can have access to a particular subject matter. This is the first time I am using this blog to write and opine about something that has happened in my career. I felt the need to write about this particular topic because, for the first time in my 30 years of practice, I was asked to do something that was out of my comfort zone and out of my area of expertise.

In July 2011 I was approached by a client to represent him in a bankruptcy case that had the potential to be the first of its kind in the United States. It was to be tried in federal district court by a jury. As most of you know, my area of expertise is criminal defense. My work as a prosecutor and criminal defense attorney has given me vast jury trial experience. At the time I was approached I didn’t know anything about the U.S. Bankruptcy Code. Up until the point I was asked to get involved, my client was represented by the prestigious bankruptcy law firm, Genovese, Joblove and Battista. My client’s lawyers — three superb attorneys in my professional opinion — were able to put my client in a position of being able to sue for damages for having an improper bankruptcy petition filed against him. These lawyers are Paul Battista, Carlos Sardi and Allison Day.

What occurred over the next two years was nothing less than remarkable. My colleagues at the bankruptcy firm agreed to teach me everything there was to know about bankruptcy law and I agreed to jump in, out of my comfort zone, and try the first bankruptcy case of its kind in the United States. This was a fantastic team effort that could not have been accomplished without my bankruptcy colleagues.

Here’s the background: In November 2008, our client, Maury Rosenberg, had a series of involuntary bankruptcy petitions filed against him personally and against his company, National Medical Imaging. There are very strict rules that apply when a creditor places a person or a company into an involuntary bankruptcy. Paul, Carlos and Allison were able to get the involuntary bankruptcy petition against Mr. Rosenberg dismissed on the grounds that the petitioning creditors, a conduit of U.S. Bank, were improper. Furthermore, the number of creditors needed for the petition was not lawful, the dispute between Mr. Rosenberg and U.S. Bank was subject to ongoing litigation in Pennsylvania and the litigation itself was subject to dispute.

When my bankruptcy colleagues were able to get the involuntary bankruptcy petition against Mr. Rosenberg dismissed, it subjected U.S. Bank and its subsidiaries to damages, attorney’s fees and costs under Section 303 (I) of the U.S. Bankruptcy Code. Normally, these cases would be decided exclusively in bankruptcy court, by a bankruptcy judge. However, recent changes in the law allowed U.S. Bank —who was not an actual petitioning creditor — to demand, argue and win the right to a jury trial. The courts prior to the commencement of the jury trial had decided that U.S. Bank was in fact an agent of the other defendants, which made it liable for the actions of the subsidiaries.

Trying this bankruptcy case in front of a federal district court jury gave me great trepidation. We were fighting U.S. Bank and its very able legal team. They had no budget, a recalcitrant attitude and a win-at-all-cost position against my client. Even though they lost at the bankruptcy court level, lost the first appeal and lost the second appeal, U.S. Bank and its legal team believed the federal courts were wrong and they were right. My settlement discussions were something out of the Twilight Zone. And because this was going to be the first case of its kind breaking new legal ground, I knew the potential for error was great. To say that I lost a lot of sleep over this case would be an understatement.

My trial experience coupled with my colleagues’ knowledge of bankruptcy law allowed us to not only win the first bankruptcy case of its kind before a jury, but to have a jury determine for the first time in our legal history that U.S. Bank’s filing of the involuntary bankruptcy petitions against Mr. Rosenberg was done in bad faith, with malicious intent and with an improper use of the bankruptcy code. The jury finding allowed us to obtain what we believe is the largest damage award ever in a case involving the filing an improper bankruptcy petition. The jury awarded Mr. Rosenberg $6.1 million in damages, including a $5 million punitive damage award.

Having time to reflect, this experience was one of the most rewarding professional endeavors of my career.  And while having great angst about getting involved, I look back on it as an extremely rewarding, educating and humbling experience. It was great to be the first — and even better win — to forge new legal ground and be part of history.