A bankruptcy trustee’s attempt to avoid a California law firm’s pre-petition lien on a debtor’s assets has been rejected by a Western District judge in an extensive analysis of the circumstances where a security interest for legal fees will be deemed a fraudulent conveyance.
Chief Bankruptcy Judge Carl Bucki said the San Francisco firm of Moscone, Emblidge & Quadra, which was retained by the debtor in a complicated pre-bankruptcy breach of contract action, is entitled to more than $200,000 in fees. Bucki said that to deny the fees would undermine the administration of justice.
