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Sanctions Sustained Against Crowell & Moring Partner
The National Law Journal
June 15, 2009
A federal appeals court has upheld a $372,000 sanction against a Crowell & Moring partner and affirmed his five-year suspension from practice in bankruptcy court in a big swath of Florida.
Peter R. Ginsberg, a white-collar defense attorney in Washington, D.C.-based Crowell & Moring's New York office and a former Assistant U.S. Attorney, lost his appeal of the sanctions on Thursday in the 11th U.S. Circuit Court of Appeals. A three-judge panel found that Ginsberg's attempts to have a bankruptcy judge recuse himself from a Chapter 11 case were in bad faith.
The appeals court affirmed the $371,517 monetary sanction imposed by the judge whom Ginsberg attempted to oust and upheld the judge's suspension of Ginsberg's license to practice for five years in the U.S. Bankruptcy Court for the Middle District of Florida. The district extends from the Georgia border to Florida's southwest coast and includes Jacksonville, Orlando and Tampa, Fla.
Ginsberg, reached by phone on Friday, said that he was disappointed in the decision. "We believe we properly represented our client against an abusive situation in the Florida court," Ginsberg said.
The sanction stemmed from the bankruptcy of Evergreen Security Inc., which, according to Thurday's decision, the bankruptcy court deemed was part of a Ponzi scheme. Ginsberg represented one of principals of Evergreen, who in 2006 was found liable for $8 million for receiving fraudulent transfers of Evergreen's assets. U.S Bankruptcy Judge Arthur B. Briskman presided over the Evergreen case.
Following the judgment against Ginsberg's client, Ginsberg sought Briskman's recusal, alleging that the judge was not impartial. Specifically, Ginsberg alleged that Briskman engaged in misconduct in another case involving one of the Evergreen defendants and that he participated in ex parte communications with the attorney representing Evergreen. Ginsberg also alleged professional misconduct by Evergreen's attorney.
Briskman, who presided over the recusal motion and the sanctions hearings, found that Ginsberg failed to establish any legal or factual support for the allegations and that he had filed the recusal motion as a delay tactic.
In affirming Briskman's decision, the appeals panel found that Ginsberg's conduct was "egregious" and included overzealous litigation tactics and factual inaccuracies. The panel also found that he demonstrated disrespectful behavior and bad faith. The panel noted that Ginsberg's first comments to Briskman during the recusal hearing were, "Your honor has compromised my health, your honor has compromised my immune system."
The appeals panel found that "Ginsberg was extremely difficult to deal with and disrespectful to the court," and that "he refused to answer the court's questions, treated the court as an adversary and continually made inflammatory statements."
The panel determined that the monetary sanctions, based on the attorney fees incurred by the Evergreen Security, were appropriate, and that the five-year suspension from practicing in a Florida bankruptcy court was reasonable for a New York attorney.
Ginsberg joined Crowell & Moring in 2007. He was an Assistant U.S. Attorney for the Eastern District of New York for seven years and previously practiced at Gold & Wachtell in Washington. He holds a law degree from Columbia Law School and a master of science degree from the London School of Economics and Political Science.
He has not determined his next step in the Evergreen case, he said.
The judges in In Re: Evergreen Security v. Ginsberg, No. 6:08cv00046, were Stanley F. Birch Jr., Frank M. Hull and Peter T. Fay, who wrote the decision.
