Teresa Denise Green

U.S. BANKRUPTCY COURT

District of South Carolina

Case Number: 20-03190-hb

ORDER SANCTIONING RECOVERY LAW GROUP, APC

The relief set forth on the following pages, for a total of 29 pages including this page, is

hereby ORDERED.

FILED BY THE COURT

11/03/2021

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Entered: 11/03/2021

UNITED STATES BANKRUPTCY COURT

DISTRICT OF SOUTH CAROLINA

IN RE:

C/A No. 20-03190-HB

Teresa Denise Green, Chapter 7

Debtor(s). ORDER SANCTIONING RECOVERY

LAW GROUP, APC

THIS MATTER is before the Court on the Motion filed by Linda K. Barr, attorney for

John P. Fitzgerald, III, Acting United States Trustee for Region Four1 seeking sanctions and other

relief involving Recovery Law Group, APC, and the Objection thereto.2 The parties filed a Joint

Statement stipulating certain facts, including exhibits.3 At the hearing, attorney Andrew Brown,

Debtor Teresa Denise Green, Julie Smoak (auditor with the UST), Chapter 13 Trustee Gretchen

Holland, and Nicholas Wajda (sole owner of Recovery Law) testified. The Court allowed the

opportunity to submit post-trial briefs.4 After careful consideration, the Court enters the following

findings of fact and conclusions of law pursuant to Fed. R. Bankr. P. 7052 and 9014.

FINDINGS OF FACT

I. GREEN’S BANKRUPTCY CASE

Green is an “assisted person” as defined by 11 U.S.C. § 101(3) and resides in South

Carolina. She discovered Recovery Law after conducting an internet search for bankruptcy

lawyers and finding its website. Green testified that she spoke with attorney Karen Kealey, who

advised Green on the bankruptcy process, her financial condition, and the documents and

information required to file for bankruptcy relief.

1 ECF No. 33, filed Apr. 1, 2021.

2 ECF No. 50, filed May 3, 2021.

3 ECF No. 65, filed Aug. 13, 2021.

4 ECF Nos. 71-72.

Green entered into a Retainer Agreement with Recovery Law on July 10, 2020.5 At that

time, no attorney admitted to practice in the U.S. District Court for South Carolina and thus, also

admitted to practice in this Court (“admitted attorney”) was employed by or associated with

Recovery Law. The Retainer Agreement does not disclose an attorney assigned to Green’s case

and it was not signed by any representative of Recovery Law.

Under the Retainer Agreement, Green was to pay Recovery Law $1,635.00 for a fully

earned, nonrefundable flat fee that:

will not be shared with any other person unless they are members of this law firm.

However, we occasionally may request an attorney, who is not a member of this

firm to appear at a scheduled 341 meeting or other Court hearing and this

appearance is made without compensation. In other instances, this firm may share

fees with special appearance counsel and in an amount not to exceed $250 per

appearance. If fees are shared, there is no additional charge to you, the debtor(s).

The Retainer Agreement provides “[t]he services agreed to here are inclusive of the preparation of

the bankruptcy petition and schedules and the handling of creditor communication. These actions

typically are done immediately upon hiring of [Recovery Law] and thus fees paid up to the first

$1,200.00, at a minimum, are earned by these actions.” Excluded from the flat fee are preparing

motions to avoid liens, drafting reaffirmation and redemption agreements, and representing the

debtor in response to any objections to exemptions, motions to dismiss, and/or motions for relief

from stay. It states “[o]ur representation of you in any of said extraordinary matter will [be] done

so pursuant to a separately agreed upon fee arrangement between you and this firm.” Green was

not provided a schedule of fees or separate agreement for the excluded services.

Brown is an admitted attorney. On July 3, 2020, Brown responded to Recovery Law’s job

posting for “Attorney for Bankruptcy Law Firm – Contract Basis with Room to Advance.”6 He

5 UST Ex. 3.

6 UST Ex. 2.

executed an Employment Agreement with Recovery Law on August 5, 20207 – 26 days after Green

retained and paid Recovery Law to file a bankruptcy case. The parties stipulated that under the

Employment Agreement, Brown’s employment with Recovery Law commenced upon its

execution. Two days later, on August 7, 2020, a voluntary petition was filed on Green’s behalf

using Brown’s U.S. District Court admission and bankruptcy CM/ECF permissions, and with his

electronic signature included on the filing, making him the attorney of record for the case.8

Brown did not speak with Green before she decided to file for Chapter 7 relief or otherwise

communicate with her during the prepetition preparation of her filings. Indeed, Brown never

consulted with Green pre- or post-petition. When she tried to contact Brown, he was unavailable

and his voicemailbox was full. There is some evidence Brown experienced personal difficulties

around that time, but the details are vague. Green only communicated with non-attorney personnel

at Recovery Law and Kealey, who prepared her petition, schedules, and statements but is not an

admitted attorney. Brown did not supervise the personnel who provided legal services to Green

or review the documents prepared by them. There is no evidence that Green was advised as to any

rights pursuant to § 524(c) (reaffirmation agreements). Wajda testified that if those discussions

occur, they are generally during the initial consultation with Recovery Law’s attorneys who are

not admitted attorneys.

The Disclosure of Compensation of Attorney for Debtor (Official Form B2030) filed with

Green’s petition states Brown agreed to accept and received $0.00 for his legal services.9 The

Statement of Financial Affairs is inconsistent and states Green’s daughter paid Recovery Law

$1,835.00 in July 2020 for attorney’s fees and the filing fee. Recovery Law was actually paid

7 UST Ex. 1.

8 UST Ex. 9.

9 UST Ex. 10.

$1,635.00 (as set forth in Green’s Retainer Agreement) to cover the $335.00 filing fee and $300.00

to Brown for representing Green in this case, with the remainder earmarked for Recovery Law.

Wajda testified that Brown was paid to review and file the petition, schedules, and statements, and

to handle any post-petition matters covered by the Retainer Agreement. However, Brown did not

receive a copy of Green’s Retainer Agreement to know what services were included. The

Disclosure of Compensation states that for his portion of the fee, Brown:

agreed to render legal service for all aspects of the bankruptcy case, including:

a. Analysis of the debtor’s financial situation, and rendering advice to the

debtor in determining whether to file a petition in bankruptcy;

b. Preparation and filing of any petition, schedules, statement of affairs and

plan which may be required;

c. Representation of the debtor at the meeting of creditors and confirmation

hearing, and any adjourned hearings thereof; [and]

d. . . . Negotiations with secured creditors to reduce market value; exemption

planning; preparation and filing of reaffirmation agreements and

applications as needed . . .

There are errors in Green’s schedules and statements, including: the Statement of Intent is

incomplete; inconsistent pension income between Schedule I and the means test; information

missing for her bank accounts, pension account, and tax refunds owed; Mariner Finance, LLC and

Republic Finance are scheduled as unsecured debts despite motions to avoid their judicial liens

subsequently filed; and according to Green’s testimony, incorrect income is listed in Schedule I.

Wajda testified these errors were caused by Kealey, who is no longer employed by Recovery Law

for this reason. No amended schedules were filed to correct these errors.

Green’s meeting of creditors pursuant to § 341 was originally scheduled for September 30,

2020.10 Green attempted to speak with Brown prior to the § 341 meeting, but Brown did not

contact or communicate with her. Green called-in to the telephonic § 341 meeting, but Brown

10 UST Ex. 7.

failed to do so. Both Brown and Green participated in the continued telephonic § 341 meeting on

October 14, 2020.

Brown testified that he drafted two motions pursuant to § 522(f)(1)(A) (avoid judicial liens)

with the assistance of Recovery Law personnel. The Court issued multiple deficiency notices due

to a failure to comply with local procedure and requirements. Brown testified that he did not

advise Recovery Law personnel on local procedure, but rather contacted non-admitted attorneys

at Recovery Law for assistance in complying therewith. There was significant delay because the

motions were withdrawn, re-filed, and amended several times in attempts to cure the deficiencies.

Despite no objections, orders granting the requested relief were not entered until five and six

months after the motions were initially filed.

Although Green received her credit counseling in February 2020 and her case was filed in

August 2020, her required certificate of credit counseling was not filed until January 4, 2021, after

a reminder from the Court. Green eventually received her discharge on June 10, 2021. After the

UST’s Motion was filed, Recovery Law paid $1,835.00 to Green.11

II. RECOVERY LAW

Recovery Law advertises itself on the internet as a business having offices located

throughout the United States, including South Carolina. Recovery Law’s website lists its local

address as 1014 Raleigh Ridge, Fort Mill, which is an apartment building. It is a domestic

corporation formed in Nevada and is not registered to do business in South Carolina.

Recovery Law markets itself online as affordable and flexible by promoting technological

efficiencies, including remote consultations and online document sharing, and accessibility by

11 This is the amount included on Green’s Statement of Financial Affairs, even though Recovery Law only received

$1,635.00 for its attorney’s fees and the filing fee.

“offering legal services to everyone in the country.”12 Its website invites potential clients to

“Access Recovery Law Group’s legal expertise and go debt-free wherever you are in the US. Click

on your nearest location below and get connected with a local bankruptcy expert.”13 South

Carolina is one of the locations listed on Recovery Law’s website with the option to connect with

a “local bankruptcy expert.” The website’s marketing to potential clients also states:

Your case is safe in the hands of our dedicated and experienced attorneys.

Throughout our years of practice, we have understood the legal system and laws to

the core, and we have brought together the strategies and legal systems in a way

that helps us to protect consumers and resolve the problems of our clients,

uniquely.14

Brown’s application for employment with Recovery Law indicated he had two years of

bankruptcy experience and previously worked as an associate attorney at a local consumer debtor

firm in Columbia, South Carolina. His Employment Agreement with Recovery Law indicates it

was an at-will, part-time, contract position as a non-equity, non-voting partner/member to be

compensated per case as follows: $300.00 per Chapter 7 case filed; $350.00 per Chapter 13 case

filed; and $350.00 per Chapter 13 case subsequently confirmed. Brown’s duties under the

Employment Agreement included:

• final preparation of bankruptcy petitions, preparing and filing motions and managing

Chapter 7 and Chapter 13 client cases;

• working collaboratively with the managing attorney and staff;

• managing client caseload, while producing high quality work product;

• communicating with clients via telephone, email, and in-person meetings;

• appearing, or scheduling reliable appearance counsel, at all required meetings of

creditors, motion hearings, and/or confirmation hearings on cases Brown files;

12 UST Ex. 20 at 7.

13 Id. at 19.

14 Id. at 16.

• communicating with trustees and court officials via court-call, email, phone

conferences and in-person; and

• maintain admission to all districts where Brown will be practicing and maintain an

active ECF filing account within each district.

Brown was required to add Recovery Law’s email address to all ECF notice email groups prior to

filing cases to allow Recovery Law personnel to review filings and docket activity in cases filed

by him. The Employment Agreement also states:

[i]mmediately upon being notified of an appointment with a client, [Brown] will

cross-check against the database of any other law firm associated [sic] also

associated with [Brown], to identify any conflicts of interest which might interfere

with [Brown]’s or [Recovery Law]’s representation of such client and will

immediately notify [Recovery Law] of such conflict. Furthermore, [Brown] will

update each other law firm’s database to disclose [Recovery Law]’s potential

representation and avoid such future conflict.

Under the Employment Agreement, Brown authorized Recovery Law to represent to the public

that his physical address was also that of Recovery Law. Brown was supposedly supervised by

Wajda – an attorney licensed in California, Nevada, Colorado, and Texas – and received case

direction from other individuals who are not admitted attorneys.

Despite the terms of the Employment Agreement, all prepetition work for cases filed by

Brown was performed by others at Recovery Law. Wajda testified that under Recovery Law’s

procedure, a client who contacts Recovery Law speaks with a non-attorney staff member who

gathers intake information. The client is then transferred to an attorney who conducts the initial

interview and advises the debtor on his/her financial situation, whether to file bankruptcy, and

which Chapter to file. That person is not an admitted attorney nor licensed in South Carolina. The

debtor’s financial information and documents are sent to that attorney who prepares the voluntary

petition, schedules, and statements. An admitted attorney must be engaged to file the case using

his or her U.S. District Court admission, U.S. District Court bar number, and CM/ECF login

credentials. Wajda testified that the admitted attorney is expected, but not required, to contact the

debtor within 48 hours of filing the case.

Brown never conducted a conflict check or input his clients into Recovery Law’s database.

Brown testified that during his employment with Recovery Law he would receive for filing

petitions, schedules, and statements completed by Recovery Law’s staff and believed his duties

began upon their receipt and not before. Brown and Recovery Law are each a “debt relief agency”

as defined in 11 U.S.C. § 101(12A) and provided assistance to debtors in this District.

At the time Brown was hired in August 2020, he was the only admitted attorney at

Recovery Law who could file a bankruptcy case in South Carolina. Despite Recovery Law’s

advertisements, there is no evidence that it employed an admitted attorney prior to that time.

Brown stopped working for Recovery Law in March 2021. Although he continues to work on

pending cases, he no longer accepts new clients from Recovery Law.

Wajda testified that an attorney licensed in South Carolina was hired by Recovery Law

prior to Brown’s association (“Attorney 1”). Attorney 1 was advertised as its “local bankruptcy

expert” for South Carolina. The parties stipulated that Attorney 1 is located in Georgia and Wajda

testified that Attorney 1 misrepresented she was an admitted attorney. Even after discovery of this

fact, as late as August 2021, Recovery Law’s website still advertised Attorney 1 as a “local

bankruptcy expert” in South Carolina along with another individual (“Attorney 2”) who also is not

an admitted attorney, and, therefore, cannot file cases in this Court. William Joseph Virgil Barr

was later hired and added to Recovery Law’s website along with Attorney 1, Attorney 2, and

Brown (who was still advertised as one of its “local bankruptcy experts” as late as August 2021

despite not working for Recovery Law since March 2021). Recovery Law’s website describes Mr.

Barr as having “over five years’ experience in filing and or drafting Chapter 13 and Chapter 7

Bankruptcy matters to include, Conduit Plans, Adversarial Proceedings, and other Bankruptcy

related proceedings.”15 While Mr. Barr has prior experience working with his father as a non-

attorney, he only became a member of the South Carolina bar on January 26, 2021, and an admitted

attorney on March 8, 2021.16 Mr. Barr is currently Recovery Law’s only admitted attorney taking

new cases. He is paid a salary and not compensated per case.

III. OTHER SOUTH CAROLINA BANKRUPTCY CASES FILED BY RECOVERY LAW

Green’s case was the first bankruptcy case filed by Recovery Law in this Court. Other

cases filed here are considered to determine whether Green’s case presents a mistake or isolated

incident. After review, it is clear that Recovery Law’s advertisements directed at assisted persons

and agreements with them about the experience and involvement of “local bankruptcy experts” are

inaccurate and the lack of adequate involvement by an admitted attorney extends beyond Green’s

case.

As of August 31, 2021, when this hearing was held, Recovery Law had filed more than 40

bankruptcy cases here, 18 of which with Brown as the attorney of record.17 Three are Chapter 13

cases in which Holland serves as the trustee: In re Johnson, C/A No. 20-04603-hb, In re Dillard,

21-00279-hb, and In re Wheeler, 21-00798-hb.18 The retainer agreements between Recovery Law

and these Chapter 13 debtors excluded from the flat fee motions to value property and/or avoid

liens, which acts are part of this Court’s mandatory Chapter 13 form plan, and are improperly

excluded.19 The retainer agreements also excluded post-confirmation work and did not provide a

15 UST Ex. 21 at 4.

16 UST Ex. 22 at 3 & Ex. 23 at 2.

17 This fact was stipulated without objection. See ECF No. 65 at ¶¶ 10 & 46.

18 While Recovery Law stipulated only to the fact that these three cases were filed by it with Brown as the attorney

and they remain open, it did not object to admission of the UST’s exhibits that included these debtors’ retainer

agreements, the case dockets, and the Chapter 13 trustee’s notes on issues with these cases and communications with

Recovery Law personnel regarding the same. Therefore, such evidence is a part of the record and may be considered

in examining the relief requested under § 526(c)(5).

19 UST Exs. 4-6.

schedule of fees for the excluded services. The retainer agreement with Johnson is dated June 19,

2020 – a time when no admitted attorney was employed by Recovery Law – yet includes an

electronic signature for Brown.20 The retainer agreements with Dillard and Wheeler were signed

by Wajda, who testified they were not signed on the date appearing thereon but were backdated.21

Attorneys who are not admitted attorneys provided pre- and post-petition services to these

debtors and gave legal advice regarding filing a bankruptcy case in this Court. Brown testified

that, except for three or four of the 18 cases he filed in association with Recovery Law, he was not

involved in the prepetition preparation of petitions, schedules, and statements or discussions with

the clients prior to completion of those documents. Brown did not review the debtors’ tax returns

or financial documents to compare the completed documents for accuracy or to determine whether

bankruptcy relief was appropriate. Brown admitted that personnel at Recovery Law who are not

admitted attorneys determined whether these debtors should file for Chapter 13 relief, prepared

the schedules and statements, drafted the plans, and used Brown’s CM/ECF login “as needed” to

file documents. Brown testified that he did not assist with or review the Chapter 13 plans filed in

these cases under his CM/ECF login and with his electronic signature affixed. Brown was paid by

Recovery Law to appear at the § 341 meetings and understood that he would be responsible for

any post-petition work requested by the Chapter 13 debtors, but the fees for that work would be

paid to Recovery Law.

It is clear from email communications to the Chapter 13 trustee’s office – some of which

did not even include or copy Brown – that other, non-admitted attorneys and personnel at Recovery

Law were primarily involved in these cases and did most of the work, including: calculating the

plan payments and treatment of secured creditors; reviewing claims; submitting documents;

20 UST Ex. 4.

21 UST Exs. 5 & 6.

contacting creditors; and otherwise representing the debtors.22 Various issues concerning basic

local practices and procedures arose in these cases, including: modifying and deleting language in

the Court’s form plan contrary to SC LBR 3015-1; including the incorrect presumptive interest

rate for § 1325 established by SC LBR 3015-6; failing to notice confirmation hearings correctly

(e.g., not providing sufficient time for objections pursuant to Exhibit A to SC LBR 9013-4, not

filing certificates of service for the notice of the plan and confirmation hearing pursuant to SC

LBR 3015-3); failing to timely serve plans; failing to use the appropriate local forms when

required; deficiencies in proposed plans (e.g., no treatment for secured claims, inadequate plan

payment base); failing to file the signed retainer agreements with the Disclosure of Compensation

as required by SC LBR 2016-1; and inefficient communications with the trustee’s office. Some

of the issues were recurring and not corrected after Recovery Law personnel was instructed on

local procedure by those other than Brown. These issues increased the work for the Chapter 13

trustee’s office, delayed confirmation and, consequently, delayed distributions to creditors.23

IV. THE UST’S MOTION AND RECOVERY LAW’S OBJECTION

The UST’s Motion requests cancellation of Recovery Law’s retainer agreement,

disallowance and return of funds received by Recovery Law, and the imposition of sanctions.

Recovery Law’s Objection filed on May 3, 2021, was signed by Brown as “lead attorney” for

Recovery Law.24 Only Brown’s electronic signature (/s/) is on the Objection, but the signature

block also includes the contact information for Peter Mulcahy, Recovery Law’s general counsel

in California. It was revealed at the hearing that the Objection was drafted by Mulcahy. The

22 UST Exs. 12, 14, & 16.

23 Johnson’s case was filed on December 22, 2020, and her plan was confirmed on May 6, 2021; Dillard’s case was

filed on January 31, 2021, and her plan was confirmed on September 17, 2021; and Wheeler’s case was filed on March

22, 2021, and no plan has been confirmed. See UST Exs. 11, 13, & 15.

24 A prior Objection filed on April 30, 2021, was withdrawn.

Objection includes the following misrepresentations that contradict the record, evidence, and

testimony of witnesses:

• Representation: “[Recovery Law] does its best to employ reputable and quality licensed

attorneys in each district where it is present, including the District of South Carolina.” (p. 2, ⁋

2)

o Evidence:

▪ Wajda testified there was no set criteria for hiring attorneys, other than

requesting 1-2 years bankruptcy experience, and Recovery Law has repeatedly

hired attorneys without such experience.

▪ Recovery Law did not conduct adequate due diligence prior to hiring Brown,

Attorney 1, or Attorney 2.

• Representation: “[Recovery Law] clients speak with attorneys, not paralegals.” (p. 2, ⁋ 4)

o Evidence:

▪ Wajda testified that 15-20 paraprofessionals work for Recovery Law and assist

attorneys with prepetition work, including conducting initial intake information

and contacting clients for needed documents and signatures.

• Representation: “[Recovery Law] lawyers are experienced bankruptcy lawyers, who

understand bankruptcy law and the Bankruptcy Code, do not cut corners, and have zero

tolerance for any attorney not complying with all ethical requirements.” (p. 2, ⁋ 4)

o Evidence:

▪ Brown admitted he was not an experienced bankruptcy attorney.

▪ Other South Carolina attorneys advertised on Recovery Law’s website have

limited to no prior bankruptcy experience, and two were not admitted attorneys

that could file a bankruptcy case in this Court.

• Representation: “Neither, [Brown], nor [Recovery Law], represent this client, or any other

client in a proportional relationship as the UST seems to suggest. [Brown], as employed by

[Recovery Law], always represented the debtor in a 100% capacity throughout this matter, as

any client is represented by a law firm in any matter.” (p. 3, ⁋ 5)

o Evidence:

▪ Brown’s involvement in this case and other cases mentioned above began after

non-attorney personnel of Recovery Law, or attorneys who are not admitted

attorneys, conducted initial consultations with the debtors, determined whether

the debtors should file for bankruptcy relief, determined which chapter to file,

and prepared the petitions, schedules, and statements.

• Representation: “[Brown] met with the Debtor via telephone and email and was always

available to Debtor throughout the course of this case. Debtor was never left without competent

admitted counsel or quality representation.” (p. 3, ⁋ 6)

o Evidence:

▪ Brown testified that he did not speak with Green when she contacted Recovery

Law and did not review with her the Retainer Agreement or the fees charged.

▪ Brown did not discuss or review with Green her financial condition (including

reviewing her tax returns, bank statements, and other financial documents),

whether bankruptcy was in her best interest, which chapter to file, or alternative

options. Brown understood that his duties began after the petition, schedules,

and statements were prepared by Recovery Law personnel and provided to him

for filing.

▪ Green testified that she never spoke to Brown and was unable to communicate

with him. He also failed to appear at her initial § 341 meeting even though she

was present by telephone.

• Representation: “The UST in the Motion, states a concern of debtors being ‘under-represented’

in this District. To the contrary, debtors have received, continue to receive and will always

receive quality and effective representation in a case.” (p. 4, ⁋ 9)

o Evidence:

▪ The evidence indicates that in the cases mentioned above, there were significant

delays caused by Recovery Law’s non-admitted attorney personnel primarily

handling those cases because they lacked knowledge of the local practice and

procedures.

• Representation: “[Brown] is an employee of [Recovery Law], who serves as the firm’s partner

attorney in the District of South Carolina. [Brown] is not to provide limited services as the

UST suggests, but to provide competent bankruptcy representation to [Recovery Law]’s South

Carolina clients.” (p. 4, ⁋ 10)

o Evidence:

▪ Brown was hired on a contract basis and paid per case.

▪ Brown’s services did not begin until after a client’s initial consultation and

bankruptcy documents were completed.

• Representation: “[F]ees are specifically enumerated in the Client Retainer Agreement as a flat

fee amount and there are no hidden fees and no fee is ever charged to a client without full

disclosure beforehand . . .” (p. 4-5, ⁋ 11)

o Evidence:

▪ Green’s Retainer Agreement does not disclose Recovery Law’s relationship

with Brown, that Brown is paid a fee for the case, or the fees for the excluded

services.

• Representation: “[Brown], as an employee of the firm and not simply an appearance counsel,

but contacts the client directly, goes over any and all issues, documents or agreements and is

available to answer any question or direct the debtor to the proper person within the firm who

can answer the particular question . . .” (p. 5, ⁋ 11)

o Evidence:

▪ Brown’s services did not begin until after Green’s bankruptcy documents were

completed.

▪ Brown never contacted Green, discussed any issues with her, or reviewed any

of her bankruptcy documents.

▪ Brown was not available when Green attempted to contact him.

• Representation: “[Recovery Law]’s practice . . . compl[ies] with all local rules regarding the

representation of a debtor in a bankruptcy case.” (p. 5, ⁋ 11)

o Evidence:

▪ The retainer agreements excluded services that are required under SC LBR

9011-1(b), including preparing reaffirmation and redemption agreements and

motions to value property and/or avoid liens included in this Court’s mandatory

Chapter 13 form plan.

▪ The evidence indicates Recovery Law’s attorneys did not have a working

knowledge of local rules and procedures as required under SC LBR 9011-1(a).

▪ Recovery Law’s attorneys did not comply with the requirements of SC LBR

9011-4 in that others used Brown’s electronic signature and CM/ECF filing

privileges to file documents without his supervision.

▪ Non-admitted attorneys prepared documents for filing in this Court without

adequate assistance from admitted attorneys. See SC LBR 9011-4; Local Civ.

Rule 83.I.01, 83.I.02, & 83.I.05 (D.S.C.); SC LBR 2090-1.

• Representation: “Clients who retain [Recovery Law] do not speak to anyone at the firm who

is not an experienced bankruptcy attorney with regard to a bankruptcy issue.” (p. 5, ⁋ 12)

o Evidence:

▪ The evidence indicates the South Carolina attorneys hired by Recovery Law are

not experienced bankruptcy attorneys, despite advertisements to the contrary.

▪ The evidence indicates clients routinely spoke with and were advised by

Recovery Law’s non-attorney staff and non-admitted attorneys who lacked

adequate knowledge of local procedures.

• Representation: “While pleadings and documents may be compiled and completed with the

assistance of paralegals and attorneys not admitted to the jurisdiction at any law firm, not just

multi-jurisdictional law firms, all pleadings and documents, before they are filed, are reviewed

and approved by the local admitted attorney after that attorney’s consultation and disclosure

with the specific client.” (p. 5-6, ⁋ 12)

o Evidence:

▪ Brown admitted he did not review documents prior to filing and documents

were filed by Recovery Law staff using his CM/ECF credentials without his

supervision.

▪ Brown did not consult with Green to disclose that documents were prepared by

non-attorney personnel or non-admitted attorneys.

• Representation: “It is [Recovery Law]’s locally employed partner-attorney who files all

pleadings, documents and statements with the bankruptcy Court in the district and in this

instance, with the bankruptcy court in the District of South Carolina.” (p. 6, ⁋ 12)

o Evidence:

▪ Brown testified that documents were filed by Recovery Law staff using his

CM/ECF credentials without his supervision.

• Representation: “Questions of local practice rules are referred to [Recovery Law]’s local

employee-partner attorney in the jurisdiction.” (p. 6, ⁋ 12)

o Evidence:

▪ Brown testified that he often contacted Recovery Law personnel who are not

admitted attorneys to seek advice because he was not knowledgeable of this

Court’s local procedures.

▪ Recovery Law attorneys who are not admitted attorneys contacted the Chapter

13 trustee’s office with questions and for guidance numerous times in the cases

mentioned above.

• Representation: “The business model of [Recovery Law] has been upheld to be compliant with

local bankruptcy practice and United States Trustee offices throughout the United States.” (p.

6, ⁋ 12)

o Evidence:

▪ Recovery Law submitted no evidence to support this claim.

• Representation: “The UST mischaracterizes the employer/employee relationship between

[Recovery Law] and [Brown] in that it speculates, without a factual basis, [Brown] is limiting

the services provided to the debtor. Nothing can be further from the truth and is inconsistent

with the information already provided to the UST prior to the Motion. [Brown] is actively

involved, in the pre-petition preparation, finalization and filing of all bankruptcy paperwork,

including, among other things, conferring directly and personally with a Debtor, reviewing the

documents prepared by his firm, reviewing filings with the client and associates, answering

legal questions, providing legal advice regarding the effects of bankruptcy, its consequences,

and its protections.” (p. 7, ⁋ 14)

o Evidence:

▪ Brown was not involved in any prepetition activities for any of the debtors

mentioned above, and he never conferred directly or personally with Green.

▪ Recovery Law personnel who are not admitted attorneys provided prepetition

legal advice to Green and other debtors mentioned above regarding the effects

of bankruptcy, its consequences, and its protections.

• Representation: “[D]espite having been provided with the correct information, the UST

incorrectly implies [Brown] joined the firm in August of 2020. [Brown] actually joined the

firm in the spring of 2020 and was provided with and was working under his employment

agreement, but due to an oversight, did not return the signed employment agreement until

August.” (p. 7, ⁋ 15)

o Evidence:

▪ Brown responded to a job opening posted by Recovery Law in July 2020 and

the Employment Agreement was executed in August 2020.

• Representation: “Further, in order to shore up additional quality representation for debtors in

the District of South Carolina, [Recovery Law] has hired attorney William Barr, formally [sic]

of the Barr law firm who has significant experience practicing bankruptcy law in the District

of South Carolina and joins [Recovery Law] as another attorney to assist in the representation

of Debtors in the District of South Carolina.” (p. 3, ⁋ 7) (emphasis added)

o Evidence:

▪ This Objection containing this representation was filed in May 2021. Mr. Barr

was licensed to practice law in South Carolina in January 2021 and admitted to

practice in the U.S. District Court, and thus able to practice in this Court, in

March 2021. He previously worked with his father, William Joseph Barr,

before he was a licensed attorney.

After Recovery Law filed its Objection, the Court entered an order requiring a joint

statement of dispute and scheduling a hearing. Brown filed a continuance request for the defending

parties to obtain separate counsel and make travel arrangements for witnesses.25 Additional

extensions were granted for both parties and a discovery schedule was established.26 On June 8,

2021, the Court entered an order giving ample notice of a hearing scheduled for August 31, 2021.27

The Joint Statement, signed by Ms. Barr, Brown, and Mr. Barr on behalf of Recovery Law

was filed on August 13, 2021. That filing was Mr. Barr’s first appearance in this case. Although

the CM/ECF docket heading now indicates Mr. Barr represents Green along with Brown,28 there

is no evidence that he aided Green in her bankruptcy filing. Further, Mr. Barr’s filed documents

make statements contrary to the interests of Brown, and it appears from their content that he

represents Recovery Law only in defense of this Motion. On Friday, August 27, 2021, Mr. Barr

filed a motion to continue or waive in-person appearances at the hearing scheduled for Tuesday,

25 ECF No. 53, filed May 7, 2021.

26 ECF Nos. 60-62.

27 ECF No. 62, entered June 8, 2021.

28 This normally occurs when an attorney makes an electronic appearance and adds himself as an attorney for debtor.

August 31, 2021,29 which was objected to by the UST and denied by the Court that day.30 Mr.

Barr filed and signed the post-trial brief, and the signature block also includes the contact

information for Mulcahy.31

At the hearing, Ms. Barr informed the Court that the UST seeks no relief against Brown.

APPLICABLE LAW

This Court has jurisdiction of this matter pursuant to 28 U.S.C. §§ 1334 and 157. This

matter is a core proceeding under 28 U.S.C. § 157(b)(2)(A) and the Court has authority to enter a

final order. Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409.

I. BANKRUPTCY AUTHORITIES

Section 329(a) requires an attorney representing a debtor in a bankruptcy case to file a

statement of compensation paid or agreed to be paid for legal services related to the case. Section

329(b) provides that if “such compensation exceeds the reasonable value of any such services, the

court may cancel any such agreement, or order the return of any such payment, to the extent

excessive, to . . . the entity that made such payment.” “It is the attorney’s burden to show the

reasonableness of his fees.” In re Busche, C/A No. 15-02559-DD, 2015 WL 6501157, at *3 (Bankr.

D.S.C. Oct. 27, 2015) (citing In re Kestner, No. 12–32831–RAG, 2015 WL 1855357, at *10

(Bankr. D. Md. Apr. 20, 2015) (“Once a question has been raised about the reasonableness of an

attorney’s fees under section 329, the attorney bears the burden of establishing that the fee is

reasonable.”)). Adequate and competent legal representation in connection with a bankruptcy case

requires time to be spent before the filing of the bankruptcy case. See In re Haynes, 216 B.R. 440,

443 (Bankr. D. Colo. 1997) (“Before an attorney can properly advise a client as to whether they

29 ECF No. 66.

30 ECF Nos. 67 & 68.

31 ECF No. 71, filed Sept. 30, 2021.

should (1) file for bankruptcy; (2) file a Chapter 7, or (3) file a Chapter 13, they must gather all

the financial information from the client, analyze the information, and then explain the situation

to the client, including at least a rough outline of what a Chapter 13 plan would look like. All that

remains after that is for this information to be typed onto the forms and file the forms with the

court.”).

A fee agreement may be cancelled, and compensation denied under § 329(b), if an attorney

fails to comply with disclosure obligations under § 329(a) and Fed. R. Bankr. P. 2016(b). See In

re TJN, Inc., 194 B.R. 400 (Bankr. D.S.C. 1996); Turner v. Davis, Gellenwater & Lynch (In re

Inv. Bankers, Inc.), 4 F.3d 1556, 1565 (10th Cir. 1993). Attorneys representing debtors in

bankruptcy cases have an affirmative duty to disclose all fee arrangements and all payments fully

and completely. See § 329(a); Fed. R. Bankr. P. 2016(b).

Section 526 of the Bankruptcy Code places certain restrictions on the activities of debt

relief agencies. Among those restrictions, a debt relief agency shall not:

(1) fail to perform any service that such agency informed an assisted person or

prospective assisted person it would provide in connection with a case or

proceeding under this title;

(2) make any statement, or counsel or advise any assisted person or prospective

assisted person to make a statement in a document filed in a case or proceeding

under this title, that is untrue or misleading, or that upon the exercise of

reasonable care, should have been known by such agency to be untrue or

misleading; [or]

(3) misrepresent to any assisted person or prospective assisted person, directly or

indirectly, affirmatively or by material omission, with respect to—

(A) the services that such agency will provide to such person; or

(B) the benefits and risks that may result if such person becomes a debtor

in a case under this title[.]

11 U.S.C. § 526(a). Further, § 528 requires debt relief agencies to execute and provide assisted

persons with a written contract that “clearly and conspicuously” explains what services will be

provided, the fees or charges for those services, and the terms of payment. 11 U.S.C. § 528(a)(1)

& (2). The Code provides various remedies for noncompliance, including:

(1) Any contract for bankruptcy assistance between a debt relief agency and an

assisted person that does not comply with the material requirements of this

section, section 527, or section 528 shall be void and may not be enforced by

any Federal or State court or by any other person, other than such assisted

person.

(2) Any debt relief agency shall be liable to an assisted person in the amount of any

fees or charges in connection with providing bankruptcy assistance to such

person that such debt relief agency has received, for actual damages, and for

reasonable attorneys’ fees and costs if such agency is found, after notice and a

hearing, to have—

(A) intentionally or negligently failed to comply with any provision of this

section, section 527, or section 528 with respect to a case or proceeding

under this title for such assisted person . . . [or]

. . . .

(C) intentionally or negligently disregarded the material requirements of this

title or the Federal Rules of Bankruptcy Procedure applicable to such

agency.

11 U.S.C. § 526(c). If the violation was intentional or indicates a clear and consistent pattern or

practice of violating § 526, the Court may “(A) enjoin the violation of such section; or (B) impose

an appropriate civil penalty against such person.” 11 U.S.C. § 526(c)(5).

Additionally, § 105(a) specifically grants bankruptcy courts the power to “issue any order

. . . necessary or appropriate to carry out the provisions of this title.” Bankruptcy courts have

“broad authority” under § 105(a). See Marrama v. Citizens Bank of Mass., 549 U.S. 365, 375, 127

S. Ct. 1105, 166 L. Ed. 2d 956 (2007). However, they may not use § 105(a) or their inherent

authority to issue sanctions that contradict or override explicit mandates of other sections of the

Bankruptcy Code. Law v. Siegel, 571 U.S. 415, 421, 134 S. Ct. 1188, 188 L. Ed. 2d 146 (2014).

“[T]he Bankruptcy Code, both in general structure and in specific provisions, authorizes

bankruptcy courts to prevent the use of the bankruptcy process to achieve illicit objectives.” In re

Kestell, 99 F.3d 146, 149 (4th Cir. 1996); see also In re Chicora Life Ctr., LC, 553 B.R. 61, 67

(Bankr. D.S.C. 2016) (“The provisions of the Bankruptcy Code, including the equitable powers of

the bankruptcy court under § 105, are designed to protect the public interest.” (citing Fisher v.

Apostolou, 155 F.3d 876, 882 (7th Cir. 1998))). To that end, § 105(a) has been interpreted to instill

bankruptcy courts with the civil contempt power. See In re Walters, 868 F.2d 665, 669 (4th Cir.

1989) (affirming the bankruptcy court’s order holding in contempt an attorney who failed to

comply with an order to refund unapproved attorney’s fees). Thus, “[b]ankruptcy courts have

inherent and statutory power to police the conduct of the parties who appear before them and to

impose sanctions on those parties who abuse the judicial process.” In re Banner, C/A No. 15-

31761, 2016 WL 3251886, at *7 (Bankr. W.D.N.C. June 2, 2016) (quotation marks and citation

omitted).

It is well-established that the solicitation of financial information and preparation of

bankruptcy petitions and schedules constitute rendering legal advice. Therefore, if performed by

a person not properly licensed, it may be considered the unauthorized practice of law.

Advising a debtor regarding which documents to file with the court and/or the

completion of the bankruptcy petition, schedules and other pleadings constitutes

the practice of law. Conduct constituting the practice of law includes a wide range

of activities, including the preparation of legal instruments and advising clients of

legal matters. State v. Buyers Serv. Co., Inc., 292 S.C. 426, 357 S.E.2d 15, 17

(1987); State v. Despain, 319 S.C. 317, 460 S.E.2d 576, 578 (1995) (holding that

the preparation of legal documents for presentation in family court constitutes the

practice of law when the preparation involves the giving of advice, consultation,

explanation, or recommendations on matters of law). “Unquestionably, advising a

person to file bankruptcy, and under what chapter to file, constitutes legal advice

that can only be given under South Carolina Law by licensed attorneys.” In re

Fleming, C/A No. 17-05544-jw, slip op. *5 (Bankr. D.S.C. Feb. 22, 2018).

In re Weathers, 604 B.R. 13, 20-21 (Bankr. D.S.C. 2019); see also In re Grimes, 115 B.R. 639,

643 (Bankr. D.S.D. 1990) (solicitation of financial information and preparation of schedules is

rendering legal advice, whether provided by lay persons or lawyers); O’Connell v. David, 35 B.R.

141, 143 (Bankr. E.D. Pa. 1983) (actual preparation and direct or indirect filing for the debtor of a

Chapter 7 petition and schedules constitutes the unauthorized practice of law) modified, 35 B.R.

146 (E.D. Pa. 1983) aff’d, 740 F.2d 958 (3d Cir. 1984); In re Herren, 138 B.R. 989, 994 (Bankr.

D. Wyo. 1992) (The solicitation of financial information and preparation of bankruptcy schedules

constitute rendering legal advice whether provided by lay persons or lawyers; the entity that

provided copies of official forms to debtor, provided directions to complete the forms, and

summarized and reformulated information solicited from debtor, was engaged in the unauthorized

practice of law).

II. PRACTICE IN THE BANKRUPTCY COURT

The U.S. District Court’s Local Rules provide the standards and restrictions regarding

appearances in federal court.

Litigants in civil and criminal actions, except for parties appearing pro se, must be

represented by at least one member of the bar of this court who shall sign each

pleading, motion, discovery procedure, or other document served or filed in this

court. The attorney identification number is also required on each pleading, motion,

discovery procedure, or other document served or filed in this court.

Local Civ. Rule 83.I.04 (D.S.C.). To be admitted, the District Court’s Local Rules require an

applicant to certify in a written application that he or she meets various requirements – including

that he or she is a member in good standing of the South Carolina bar, studied the South Carolina

Rules of Professional Conduct, and completed the required trial experiences listed in Rule 403 of

the South Carolina Appellate Court Rules32 – and to include the certification of two attorneys who

32 This Rule provides that attorneys admitted to practice in South Carolina “shall not appear as counsel in any hearing,

trial, or deposition in a case pending before a court of this State until the attorney’s trial experiences required by this

rule have been approved by the Supreme Court.” S.C. App. Ct. R. 403(a). With certain exceptions for judicial law

clerks, the Rule requires an attorney to complete four trial experiences at any time after completion of 2/3 of the credit

hours needed for law school graduation. S.C. App. Ct. R. 403(b) & (c). The four required trial experiences are:

(1) Observation of or actual participation in one (1) civil or criminal jury trial in the Circuit Court

of South Carolina or in the United States District Court for the District of South Carolina. The

trial must include an opening statement, a closing argument, and direct and cross-examination

of at least two (2) witnesses. Credit for actual participation requires actual participation in an

entire jury trial if the attorney is accompanied by an attorney whose trial experiences have been

are members in good standing of the District Court bar that the applicant is of good moral character

and professional reputation and meets the requirements for admission. Local Civ. Rule 83.I.03

(D.S.C.).33

Admission to practice before the District Court is “a prerequisite to practice in the

bankruptcy division.” Local Civ. Rule 83.I.01(B) (D.S.C.). Attorneys “must possess a working

knowledge of the United States Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, the

Federal Rules of Civil Procedure, the local rules, local administrative and operating orders,

Chambers Guidelines, and the applicable local rules of the United States District Court.” SC LBR

9011-1(a).

The District Court adopted the South Carolina Rules of Professional Conduct. Local Civ.

Rule 83.I.08 (D.S.C.), RDE Rule IV(B). Rule 5.5 of the South Carolina Rules of Professional

Conduct provides:

(b) A lawyer who is not admitted to practice in this jurisdiction shall not:

(1) except as authorized by these Rules or other law, establish an office or

other systematic and continuous presence in this jurisdiction for the

practice of law; or

approved under this rule or who is exempt from this rule, and the approved attorney is present

throughout the hearing or trial;

(2) Observation of one (1) video trial that has been approved by the Supreme Court;

(3) Observation of one (1) Alternative Dispute Resolution proceeding in a Court of Common Pleas,

Family Court, or Federal District Court matter or observation of one (1) video of an Alternative

Dispute Resolution experience that has been approved by the Supreme Court; and

(4) Two (2) “day in court” experiences, selecting from the Court of Common Pleas, the Court of

General Sessions, the Family Court, or a state or federal Administrative Law Court governed by

either the South Carolina Administrative Procedures Act or the Federal Administrative

Procedure Act, provided the administrative hearing(s) must take place within South Carolina.

The presiding judge must attest on an approved form the presence of the student or attorney from

the commencement of court through adjournment of court for the day, which must include a

minimum of four (4) hours in court per day/experience.

One (1) of the “day in court” experiences required under this subsection may be satisfied by

participation in a judicial observation and experience program approved by the Chief Justice’s

Commission on the Profession.

S.C. App. Ct. R. 403(b).

33 See also Local Civ. Rule 83.I.05 (D.S.C.) (Appearances by Attorneys Not Admitted in the District). This Rule was

not utilized by Recovery Law for representation of any litigant.

(2) hold out to the public or otherwise represent that the lawyer is admitted

to practice law in this jurisdiction.

(c) A lawyer admitted in another United States jurisdiction, and not debarred,

disbarred or suspended from practice in any jurisdiction, may provide legal

services on a temporary basis in this jurisdiction that:

(1) are undertaken in association with a lawyer who is admitted to practice

in this jurisdiction and who actively participates in the matter; [or]

(2) are in or reasonably related to a pending or potential proceeding before

a tribunal in this or another jurisdiction, if the lawyer, or a person the

lawyer is assisting, is authorized by law or order to appear in such

proceeding or reasonably expects to be so authorized;

. . . .

(d) A lawyer admitted in another United States jurisdiction, and not debarred,

disbarred or suspended from practice in any jurisdiction, may provide legal

services in this jurisdiction that:

. . . .

(2) are services that the lawyer is authorized to provide by federal law or

other law of this jurisdiction.

S.C. App. Ct. R. 407, RPC 5.5 (emphasis added). The Rules of Professional Conduct also limit

an attorney’s use of any form of the words “expert” to avoid confusion with the South Carolina

Supreme Court’s program for certifying specialists, which includes certified specialists in

bankruptcy/debtor-creditor law.

A lawyer who is not certified as a specialist but who concentrates in, limits his or

her practice to, or wishes to announce a willingness to accept cases in a particular

field may so advertise or publicly state in any manner otherwise permitted by these

rules. To avoid confusing or misleading the public and to protect the objectives of

the South Carolina certified specialization program, any such advertisement or

statements shall be strictly factual and shall not contain any form of the words

“certified,” “specialist,” “expert,” or “authority” . . .

S.C. App. Ct. R. 407, RPC 7.4(b).

Apart from certain exceptions not applicable here, SC LBR 5005-4 requires all documents

be filed electronically utilizing the Court’s CM/ECF system. “Filing any document using a

CM/ECF login and password . . . constitutes the filer’s signature for purposes of signing the

document under Fed. R. Bankr. P. 9011 and any other applicable authority relating to signatures.”

SC LBR 9011-4(a).

This Court’s Local Rules set forth the extent of an attorney’s duty to represent a debtor as

follows:

Except as may be provided in a written agreement with the debtor concerning

appeals and adversary proceedings, the law firm/attorney which files the

bankruptcy petition for the debtor shall be deemed the responsible attorney of

record for all purposes including the representation of the debtor at all hearings and

in all matters arising in conjunction with the case, including service, notice and

communication via CM/ECF and the Federal Rules of Bankruptcy Procedure. In

the instance that the agreement is between the law firm and the debtor, the filing

attorney shall be deemed the designated attorney for the law firm . . .

SC LBR 9011-(b).

DISCUSSION AND CONCLUSIONS

Recovery Law solicited clients in South Carolina, including Green, over the internet with

a website misrepresenting that an experienced South Carolina bankruptcy attorney or “local

bankruptcy expert” was available at the firm and able to assist. After locating the website, Green

retained Recovery Law. At the time she executed the Retainer Agreement, it included work that

no person at Recovery Law was qualified or permitted to perform. After retention and payment

from Green – and even after an admitted attorney was employed – Recovery Law’s non-admitted

attorneys, who were not local bankruptcy experts, provided legal advice and assistance to Green

to file a bankruptcy case in this Court without supervision or assistance from an admitted attorney.

The Retainer Agreement between Green and Recovery Law was never signed by a representative

for Recovery Law and did not provide the fees for any excluded services. Brown was later hired

and his credentials used for filing as well as appearance at the § 341 meeting and any necessary

hearings. The Disclosure of Compensation did not disclose the need for payment to Brown for his

services. The Disclosure of Compensation also included legal services performed by Recovery

Law’s personnel without supervision by an admitted attorney and no such attorney was involved.

The terms of Green’s Retainer Agreement, as well as Recovery Law’s statements on its website,

included material misrepresentations. The Disclosure of Compensation and Green’s Retainer

Agreement also contain untrue and misleading terms and do not explain clearly and conspicuously

the services to be provided or the fees for such services.

Recovery Law argues its business model is permissible under Rule 5.5(c)(1), (c)(2), and/or

(d)(2) of the South Carolina Rules of Professional Conduct. Rule 5.5(c)(1) and (2) are inapplicable

because they only provide exceptions if a lawyer admitted in another United States jurisdiction

provides legal services on a temporary basis. Recovery Law has filed more than 40 bankruptcy

cases before this Court, 18 of which were filed by Brown with the majority of services provided

by Recovery Law personnel who are not admitted attorneys and with minimal involvement by

Brown. The evidence does not support a view that these personnel provided legal services that

meet the limitation of “temporary” under Rule 5.5(c). Further, Recovery Law has failed to show

how Rule 5.5(d)(2) provides an exception or any safe harbor here.

Recovery Law attorneys must comply with the bar admission requirements of the South

Carolina Supreme Court, the District Court, and this Court, which require litigants (except for

those appearing pro se) to be represented by at least one member of the bar of the District Court.

In Green’s case, no such member was available at Recovery Law to represent her at the time she

contracted for its services. Even after an admitted attorney was engaged in this case and the others

mentioned herein, Brown regularly sought advice from individuals who are not admitted attorneys

– as opposed to vice versa since he was marketed as the “local bankruptcy expert.” Recovery

Law’s staff who are not admitted attorneys regularly gave legal advice to clients and made legal

decisions both pre- and post-petition, filed documents and pleadings using Brown’s CM/ECF login

credentials without his involvement, and electronically signed documents on his behalf without

adequate, if any, supervision by Brown. Regardless of any employment contract terms or

assertions to the contrary, the evidence indicates Recovery Law paid Brown a minimal amount

because it intended to: do most of the work for South Carolina clients who seek bankruptcy advice

without the assistance or supervision of Brown; monitor the cases through the shared email

account; and use Brown as a mere conduit for his local filing privileges and court appearances.

Despite various representations as to Brown’s adequate qualifications in its Objection,

Recovery Law argued at trial and in its post-trial brief that the issues raised in Green’s case and

the others mentioned herein were primarily caused by Brown’s misrepresentation of his prior

bankruptcy experience, his deficient work performance, and Kealey’s mistakes. However,

Recovery Law’s business practices, lack of due diligence, and lack of regard for the truth in its

advertisements provided a blueprint for these problems. Green’s case and the others mentioned

herein demonstrate that the issues caused by Recovery Law’s use of attorneys and staff without

knowledge of local practice and procedures and its lack of concern about the same were repeated

to the detriment of the involved debtors and others, despite contrary online advertising directed at

prospective assisted persons.

The evidence shows Recovery Law violated § 526(a)(1), (2), and (3)(A), failed to satisfy

its obligations under § 528(a)(1) and (2), failed to adequately disclose compensation as required

by § 329(a), and the compensation received was unreasonable under § 329(b). The acts do not

appear to be isolated or accidental, but rather intentional as part of a for-profit scheme. Pursuant

to § 329(a) and (b) as well as § 526(c)(1) and (c)(2)(A) and (C), the retainer agreement between

Recovery Law and Green must be voided and all fees forfeited.34

The combined actions discussed herein warrant further sanctions under §§ 105(a) and

526(c)(5)(B) to deter future violations of the applicable rules and statutes as Recovery Law

34 The Court acknowledges that Recovery Law has already returned the funds paid by Green in connection with her

bankruptcy case.

intentionally violated § 526 and engaged in a clear and consistent pattern or practice of violating

§ 526. Recovery Law advertised to clients services it did not or could not provide because: its

non-admitted attorneys and/or non-attorney staff perform the majority of the services it advertises

will be provided by a “local bankruptcy expert”; the “local bankruptcy experts” have minimal or

no prior bankruptcy experience, are not admitted attorneys, and/or are not knowledgeable of local

practices and procedures; it failed to correct its marketing of a “local bankruptcy expert” after

discovering the attorney was not an admitted attorney; and its advertised staff of “dedicated and

experienced attorneys” involved in Green’s case caused numerous errors in basic bankruptcy tasks.

When confronted with these issues, Recovery Law’s non-admitted attorneys drafted responsive

pleadings that were filed by Brown, which contain misrepresentations about practices and

procedures. In anticipation that the UST’s Motion alerted Recovery Law to applicable standards

for practice in this Court, a minimal monetary amount is imposed to address the bankruptcy issues

raised in the above-captioned case. However, this should not be interpreted as an indication of a

frivolous matter. Rather, this decision disposes of the bankruptcy-related issues in Green’s case

only and does not restrict any further action in any case mentioned herein before this Court or any

other authority. Based on the foregoing,

IT IS, THEREFORE, ORDERED THAT:

1. the retainer agreement between Teresa Denise Green and Recovery Law Group,

APC fails to comply with 11 U.S.C. §§ 329(a) and 528(a)(1) and (2);

2. the Disclosure of Compensation filed by Andrew Brown and/or Recovery Law

Group, APC fails to comply with 11 U.S.C. § 329(a) and contains untrue and

misleading statements in violation of 11 U.S.C. § 526(a)(2);

3. Recovery Law Group, APC failed to perform services it informed Teresa Denise

Green it would provide in connection with her case in violation of 11 U.S.C. §

526(a)(1), and the compensation paid to it exceeds the reasonable value of the

services provided pursuant to 11 U.S.C. § 329(b);

4. pursuant to 11 U.S.C. § 329(b) as well as § 526(c)(1) and (c)(2)(A) and (C), the

retainer agreement between Teresa Denise Green and Recovery Law Group, APC

is hereby void and cancelled, and Recovery Law Group, APC forfeits all fees for

the above-captioned case and shall not seek reimbursement for any amounts already

paid to Teresa Denise Green;

5. pursuant to 11 U.S.C. §§ 105(a) and 526(c)(5)(B) and as a further monetary

sanction, Recovery Law Group, APC is hereby ordered to pay an additional

$1,635.00 to Teresa Denise Green within 14 days from entry of this Order. This

amount shall be delivered to Teresa Denise Green along with a copy of this Order.

Within three (3) days after payment, Recovery Law Group, APC shall file a

declaration with this Court in the above-captioned case attesting to its compliance

with this Order and attaching evidence of the payment ordered herein; and

6. pursuant to Local Civ. Rule 83.IX.08 (D.S.C.), RDE Rule V(A),35 the Court directs

the Clerk of Court to transmit a copy of this Order directly to the South Carolina

Office of Disciplinary Counsel to take any action it deems necessary and

appropriate to regulate practice within the State.

35 See Local Civ. Rule 83.I.08 (D.S.C.), RDE Rule V(A) (“Nothing herein shall, however, preclude a judge from

reporting an attorney’s actions or inactions directly to the disciplinary authority for any state where the attorney is

admitted to practice . . .”).