The bankruptcy attorney for embattled Minnesota lawyer Paul Hansmeier had herself removed from his case Tuesday, saying she could no longer represent him while still meeting her obligation of "fairness and candor" to the court.
Attorney Barbara May — who is still attorney of record for disgraced auto dealer Denny Hecker's attorney of record and who said she prides herself on taking the cases no other attorney wants — told the court that it's only the fourth time in 35 years that she's had to withdraw from a bankruptcy case.
"Sometimes things blow up in our cases quite suddenly that are outside of our range," she told U.S. Bankruptcy Court Judge Kathleen H. Sanberg. She didn't provide details of what happened with Hansmeier.
Her withdrawal comes just days before an evidentiary hearing scheduled for Friday. Hansmeier, apparently in preparation for the hearing, filed documents as his own attorney on Monday.
He filed for Chapter 13 bankruptcy protection last summer while defending himself against sanctions related to a former legal practice that engaged in "porn trolling." The practice was accused of attempting to defraud the courts by getting judges to issue subpoenas so they could obtain identities of people suspected of downloading copyrighted pornography, then pressure them to settle by paying hundreds or thousands of dollars. The sanctions totaled $576,000 as of 2014, according to Hansmeier's bankruptcy filings.
Hansmeier has since launched a lucrative practice suing businesses for alleged violations of the Americans with Disabilities Act. Criticized by advocates for the disabled, the suits rarely lead to trial as the targeted businesses, most of them small, family-owned operations, settle rather than take on a potentially expensive legal battle. A bill before the state Legislature would make it more difficult to bring such lawsuits.
In the bankruptcy proceedings, Hansmeier has been accused by the attorney for one of the trustees of providing false testimony. The lawsuit, when it was filed in March, prompted May to defend Hansmeier, who said at the time that her client had been "scrupulously honest."
Hansmeier made four payments under the original Chapter 13 plan set up last summer totaling $10,169.81. He asked this week that the money be returned to him. The court instead on Tuesday ordered it handed to the Chapter 7 trustee who took over the bankruptcy case in December.
During the brief hearing, May told Sanberg that she would work with the trustee and his counsel to "not have this thing go off its wheels." After granting the motion, Sanberg said: "Unfortunately, I think the wheels have already come off the case based on what was filed yesterday."
She didn't elaborate, but Hansmeier on Monday filed a nine-page statement he called "Paul Hansmeier's Trial Brief" and other documents, acting as his own attorney. Last Friday, Hansmeier filed papers saying trustee Randall L. Seaver and his attorneys should be sanctioned and disbarred. The filing included a photo of a man standing next to a Mercedes-Benz and said Seaver purchases a new Mercedes each Christmas Eve.
"It seems contrary to the interests of justice, and frankly revolting, for a Chapter 7 trustee to make millions of dollars off the backs of 'honest but unfortunate' Minnesotan debtors," Hansmeier wrote.
A petition seeking Hansmeier's disbarment is pending before the Minnesota Supreme Court.
Matt McKinney • 612-217-1747
