Legal Question in Bankruptcy in Ohio

can a special counsel accept an agreement for settlement without first having co

A friend of mine was dismissed from emploment almost two years agao. Because of this he was out of work for 8 months. He retained counsel to represent him in this discharge case. Due to his not working, and then finding another job that paid approximately 20k less than his prior job he was forced to file for bankruptcy. The bankruptcy court appointed his legal councel as special counsel for the court. He just learned that the special counsel settled for the amount of 10k. He was never notified that there was a settlement offer, nor would the special counsel, who was retained by him in the first place, return calls to him. He was finding out what was going on with his case from the internet. He finnally was able to talk with the attorney today, and that is when he was informed what had happened. Is this legal. He never signed any paper work, to his knowledge, stating that he would give up any right to first discuss a settlement, which was to go towards his creditors first. Is there anything that he can do. He has had to be watched before, because of possible suicide, and his counsel knew this. I am now concerned that he may do something tragic.


Asked on 10/22/04, 5:35 pm

1 Answer from Attorneys
Steven Schiller Steven L. Schiller, Attorney at Law

Re: can a special counsel accept an agreement for settlement without first havin

The chap. 7 trustee "owns" the cause of action and the special counsel works for him. The trustee has full say whether to accept a settlement. However, that doesn't mean that the trustee gets all (or any) of the money. That depends on whether the settlement is partly or fully exempt under the debtor's claimed exemptions.

the debtor should contact his ch.7 attorney to assert a claim to whatever part may be exempt. If the suit included a claim for future earnings loss, (after bankruptcy was filed) that part may be fully exempt.

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Answered on 10/23/04, 11:50 am


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