Can You Request Another Bankruptcy Judge?
Sometimes a debtor may feel that they are not being treated fairly by their bankruptcy trustee or bankruptcy judge. Do they have recourse? Yes. In the recent bankruptcy case of real estate mogul Tim Blixseth, the billionaire expressed concern that he was being treated unfairly by his bankruptcy judge so he filed a motion to disqualify Bankruptcy Judge Ralph Kirscher from his bankruptcy case.
His move to oust U.S. Bankruptcy Judge Ralph Kirscher comes after an appeal’s court last month faulted the judge’s approval of the club’s 2009 sale. That $115 million deal passed control from Blixseth’s ex-wife, Edra Blixseth, to Sam Byrne of Boston-based CrossHarbor Capital.
On Monday, Tim Blixseth alleged he was cheated in the deal — and that Kirscher allowed it to happen. Tim Blixseth said he filed the disqualification motion himself because his own attorneys and others he had contacted in Montana feared retaliation if they took the case.
The motion alleges that Kirscher showed a pattern of “disdain” for Tim Blixseth and was biased in favor of Edra Blixseth, who has been targeted in an FBI investigation into potential bank fraud.
Tim Blixseth also said the judge and at least one member of his staff had inappropriate communications with Tim Blixseth’s legal adversaries — although he added that he knew of no intentional wrongdoing by Kirscher.
The bankruptcy law allows the disqualification of a bankruptcy judge if “his impartiality might be reasonably questioned.” This impartiality could apply to the entire case as in Blixseth’s accusation that the bankruptcy judge held him with disdain or in a very specific matter. For example, in the sale of the debtor’s business, Blixseth claimed that the bankruptcy judge favored his ex-wife. In either of these situations the bankruptcy judge could be disqualified or he could disqualify himself if he felt that he could not maintain impartiality. If a debtor reasonably feels that a bankruptcy trustee or judge is being unfair to them they need to discuss this with their bankruptcy attorney and possibly consider filing a motion to disqualify the judge or trustee.