News Category: In the News

News

Utility Line Security, LLC Files for Chapter 11 Bankruptcy Protection

PITTSBURGH, PA – Utility Line Security, LLC (ULS) of Pittsburgh, the company which provides the Pittsburgh Water and Sewer Authority’s line warranty program, filed for protection under Chapter 11 of the United States Bankruptcy Code this afternoon.  The filing was made necessary by actions of the PWSA in the wake of a preliminary ruling by an Allegheny County Common Pleas Judge that the contract was not permitted.  ULS filed to protect the customers who have paid for a valuable and needed service under the program and to prevent the PWSA from unilaterally terminating the program.

Continue reading “Utility Line Security Files for Chapter 11 Bankruptcy Protection”

News

Mediator Bob Bernstein Helps Settle Major Dispute in 293 Bankruptcy
Cases

Pittsburgh, PA – In December, U.S. Bankruptcy Judge Thomas P. Agresti appointed Robert S. Bernstein, Esq. of Pittsburgh’s Bernstein-Burkley, P.C., P.C. as Mediator in the dispute between Countrywide Home Loans and Ronda J. Winnecour, the Chapter 13 Trustee in Pittsburgh. After months of conferences and discussions facilitated by Bernstein, on July 15, the parties filed a Motion with the Court asking approval of a settlement.

Continue reading “Mediator Bob Bernstein Helps Settle Major Dispute in 293 Bankruptcy Cases”

News

$11 Million Settlement Approved in Bankruptcy of Cleveland-Based Arter &
Hadden Law Firm

CLEVELAND, OHIO, Sept. 14, 2007: The U.S. Bankruptcy Court in Cleveland approved a settlement for over $11 million between 180 former partners of Arter & Hadden and Marc P. Gertz, the bankruptcy Trustee for the defunct law firm.

Judge Randolph Baxter, the Chief Judge for the U.S. Bankruptcy Court for the Northern District of Ohio, presided over the case, which was filed by Gertz, seeking the recovery of funds and damages from more than 200 former partners of Arter & Hadden, which was headquartered in Cleveland.

Arter & Hadden, one of the country’s oldest law firms with 12 offices nationwide, closed its doors on July 15, 2003, owing millions of dollars in pension obligations and other debts to creditors. The lawsuit was filed by Gertz, who was appointed as Chapter 7 Trustee in January, 2004, and who
conducted an 18-month investigation into the cause of the firm’s demise. Gertz was represented by Robert S. Bernstein, managing partner of Bernstein Law Firm, P.C. based in Pittsburgh, PA, and Irving B. Sugerman, Robert M. Gippin and Michael A. Steel of the law firm of Goldman & Rosen, Ltd. in Akron, Ohio.

The settlement will allow for a significant distribution to the firm’s 400 or more creditors, including former landlords, court reporters, research service providers, suppliers and retired partners, according to attorneys for the trustee. “The number and amount of the creditors to receive payment
is still being reviewed,” Gertz said. “There may be some claims that are objectionable and it might take several months to make a final determination,” he added.

Gertz praised the efforts of his counsel as well as counsel for the former partners. “This was a very complex and emotionally charged case, but in the end, it was determined that this settlement was in the best interests of all of the parties.”

“Creditors should receive distributions in an amount up to 20 percent of their allowed claims, which is in the upper range of similar cases,” said Bernstein. There are also numerous other cases pending against former clients, according to Sugerman. To date, over $10 million has been
collected in assets, in addition to settlements reached with the firm’s lenders, he said, and the total amount of the recovery will exceed $20 million.

The largest group of former partners to settle was attorneys who left Arter & Hadden to form Tucker, Ellis & West in Cleveland and Bailey Cavalieri in Columbus, according to Bernstein. The remaining 100 attorneys to settle worked at Arter & Hadden’s 12 offices throughout the country. Legal proceedings and collection efforts will continue against the remaining 19 partners who have not settled, according to Gertz. A trial date has not been set.

News

Bernstein-Burkley, P.C. Files Suits to Recover Funds for the Creditors of Brownsville General Hospital

PITTSBURGH, Sept. 5, 2007: Bernstein-Burkley, P.C. filed suits yesterday in Federal Bankruptcy Court in Pittsburgh to recover funds to distribute to creditors of former Brownsville General Hospital in Fayette County.

The firm, which represents attorney Robert S. Bernstein, the bankruptcy plan administrator for Brownsville General Hospital, filed several lawsuits yesterday to recover preferential transfers received by “favored” creditors of the nonprofit hospital shortly before it filed bankruptcy on January 24, 2006.

“We are trying to secure an equitable distribution of the hospital’s assets to all of the hospital’s creditors — not just some of them,” said Bernstein, an attorney and managing partner of Bernstein-Burkley, P.C. “Some creditors were treated better than others just before the hospital closed. This doesn’t mean those preferred creditors did anything wrong. It just means they got payments that should come back into the pot to be fairly distributed,” he said. The suits seek the total recovery of $979,915.70 from 29 creditors.

Among the hospital’s priority debts are payments due to former employees totaling almost $1 million. Bernstein has made partial distributions to those employees who didn’t get their last paycheck when the hospital closed abruptly just before the bankruptcy filing. “We are working through the many claims that have been filed,” Bernstein explained. “Some of the claims are unclear and confusing and we are contacting claimants to try to determine which parts of the claims can be paid now and which will have to await recovery of other assets.”

Bernstein also filed suit two weeks ago in Federal Bankruptcy Court against Brownsville Property Corporation and Brownsville Health Services Corporation, two related parties, contending that the 2005 transfer of the hospital property to one of them, the newly created nonprofit Brownsville Property Corp., was fraudulent as to creditors. “Basically, during the conversion of the hospital’s ownership from a non-profit to a for-profit, all the debt stayed with the hospital, but the valuable real estate was transferred to the new entity,” Bernstein said. “We believe the transfer of the hospital property to a third party was a fraudulent transfer under the provisions of the U.S. Bankruptcy Code and Pennsylvania law. In essence, it appears the hospital had sufficient assets to pay its creditors prior to the conversion, but not after. Creditors of the estate, including former employees, should not be left holding that empty bag,” Bernstein said.

There are few sources of payment for creditors, including employees, according to Bernstein. “In addition to the fraudulent transfer of the real property, we have another suit pending against Brownsville Health Services Corporation and West Point Health Corporation, seeking to recover loans of more than $500,000 and $1.2 million, respectively, owed to the hospital at the time of the for-profit conversion. We have an office condominium on the hospital grounds that we are in the process of selling. We are also trying to recover some funds that we believe were overpayments to the former CEO, and we are still trying to determine whether any of the patient accounts receivable are collectible. Ultimately, whether employees and creditors get paid will depend on how successful we are in recovering the money from Brownsville Property Corporation, Brownsville Health Services Corporation and West Point Health Corporation. We think we have solid claims, but this is not going to be easy, or quick.”

Bernstein-Burkley, P.C. Partners Bob Bernstein and Kirk Burkley were listed as representatives of an unsecured creditors’ committee in a news article that ran Nov. 13, 2006, in the Daily Deal entitled “New Owners in Store for W.S. Lee.”