- Judge weighing sanctions against insurance company
- Kossoff is reportedly under criminal investigation
(Reuters) – The Chapter 7 trustee overseeing the dissolution of Kossoff PLLC is stepping up his fight to gain access to records of the defunct New York real estate law firm, seeking sanctions against an insurance company and pressing one of the largest banks in the world to cooperate.
U.S. Bankruptcy Judge David Jones has ordered American National Life Insurance Co of New York to appear in court Tuesday after it allegedly ignored a subpoena from Chapter 7 trustee Al Togut of Togut, Segal & Segal. The insurer has to show cause as to why it shouldn’t be sanctioned, Jones’ order said.
Jones on Tuesday will also hear Togut’s motion to compel former Kossoff bookkeeper Julia McNally to comply with his subpoena. And he will get an update from Togut and JPMorgan Chase Bank NA over Togut’s request for access to Kossoff’s bank accounts.
The Kossoff firm was forced into bankruptcy in May, after creditors claimed it misappropriated more than $8 million from its escrow accounts. Walter Mack, a lawyer for founder Mitchell Kossoff, has said Kossoff is under investigation by the Manhattan district attorney.
Togut said in an email that lack of cooperation in the case forced him to take a tough approach to gathering records. “It’s time-consuming but it has become necessary,” he said.
JPMorgan has argued that Togut’s motion to compel was filed improperly. The bank said it has already turned over thousands of pages of documents, but the trustee wants online access to the Kossoff firm’s bank accounts so it can determine “which transfers made by the debtor were outside of the ordinary course of business,” wrote Neil Berger, Togut’s partner.
Jones on Wednesday ordered the trustee and the bank to meet and discuss their issues ahead of Tuesday’s appearance.
Togut and Mitchell Kossoff, once a fixture in the New York real estate legal market, have fought over the firm’s records, with Kossoff arguing he would be waiving his right to avoid self-incrimination if he turned them over. Jones rejected that argument in July, and a Manhattan federal judge dismissed Kossoff’s appeal Sept. 30.
Mack declined to comment on their next course of action. “All under consideration,” he said.
A JPMorgan spokesperson declined to comment. Representatives for American National did not respond to a request for comment.
The case is In re Kossoff PLLC, U.S. Bankruptcy Court for the Southern District of New York, No. 21-10699.
For Togut: Neil Berger, Brian Shaughnessy and Minta Nester of Togut, Segal & Segal
For Kossoff: Walter Mack of Doar Rieck Kaley & Mack
For JPMorgan Chase: Alan Brody and Paul Ferak of Greenberg Traurig
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David Thomas reports on the business of law, including law firm strategy, hiring, mergers and litigation. He is based out of Chicago. He can be reached at firstname.lastname@example.org and on Twitter @DaveThomas5150.