# In Re Schlichtmann

> United States Bankruptcy Court, D. Massachusetts · September 25, 2007 · 375 B.R. 41

URL: https://www.frixlaw.com/law-library/cases/1924559

## Case

- **Full name:** In Re Jan Richard SCHLICHTMANN, Debtor
- **Court:** United States Bankruptcy Court, D. Massachusetts
- **Decided:** September 25, 2007
- **Citations:** 375 B.R. 41; 2007 Bankr. LEXIS 3258; 2007 WL 2826602
- **Precedential status:** Published
- **Opinion:** Opinion by Somma
- **Judges:** Robert Somma
- **Cited by:** 25 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/1924559

## How later opinions describe it (automated extraction)

- applying Pratt with extensive discussion

## Opinion text

MEMORANDUM OF DECISION ON DEBTOR’S MOTION FOR SANCTIONS FOR VIOLATION OF DISCHARGE ORDER
ROBERT SOMMA, Bankruptcy Judge.
By the motion before the Court, debtor Jan Richard Schlichtmann (“Schlichtmann” or “the Debtor”) seeks compensatory and punitive damages and related injunctive relief against The Cadle Company, Inc., its principal Daniel C. Cadle, and an affiliate, Atlanta Joint Venture, L.P. (collectively, “the Respondents”) for violating his Chapter 7 discharge. He also seeks damages against the same parties for alleged fraudulent misrepresentations, made by their former attorney to the Court in the course of these proceedings, on the theory that the misrepresentation was a fraud upon the court. By agreement of the parties, issues of liability have been tried first, with damages to be quantified in a second phase, if necessary. After a trial on the issues of liability, and pursuant to Fed.R.Civ.P. 52(a), the Court now enters the following findings of fact and conclusions of law.
FINDINGS OF FACT AND PROCEDURAL HISTORY
1
a.
Initial Events
1. At all relevant times, Schlichtmann has been a practicing attorney. From 1986 through December 1990, he was and had for some time been a partner in the law firm of Schlichtmann, Conway
&
Crowley and then of Schlichtmann, Conway, Crowley
&
Hugo (“SCC
&
H”).
2
His partners in SCC & H were Kevin P. Conway, William J. Crowley, and Michael R. Hugo. Commencing in late 1986, Schlicht-mann and the firm (first SC & C and later SCC & H) represented the plaintiffs in certain environmental litigation in the Mid-dlesex Superior Court, known as
Coble v. FL Aerospace Corp.
(“the Groton matter”), and the firm had entered into a contingency fee agreement with the plaintiffs for its
*47
services in that matter, with the fee to be paid at the conclusion of the litigation.
2. In 1990, SCC & H borrowed funds from the Boston Trade Bank, as evidenced by three promissory notes (collectively,' “the SCC
&
H notes”). The first, a revolving note dated June 19, 1990, was in the principal amount of $150,000 and payable on demand. The second, dated October 31, 1990, was in the principal amount of $45,000 and payable on December 31,1990. And the third, dated December 31, 1990, was in the principal amount of $40,000 and payable on January 31, 1991. The rates of interest on all three were variable.
3. To secure these notes, the firm gave the Bank a security interest in all assets of the firm, including the account receivable arising from its fee agreement in the Gro-ton matter. Each individual partner, including Schlichtmann, also guaranteed the notes. Schlichtmann was liable for the full debt of SCC & H on these notes, not only as a guarantor but also as a general partner of SCC &H.
4. On December 27, 1990, Schlicht-mann, on stationery of SCC & H, sent a letter to Anthony Zinna, a loan officer at the Boston Trade Bank, concerning the status of the firm’s outstanding loans “and the attorney’s fees which will be sufficient to pay them off.” The letter informed Mr. Zinna that the firm anticipated receiving some $406,000 in fees from monies already being held in escrow in conjunction with a settlement of the Groton matter. Schlicht-mann said in the letter: “I want to assure you of the bank’s security interest in these anticipated fees in the Groton case,” Schlichtmann said in the letter. He also stated: “Out of the first payment we will pay off the $45,000 note.”
5. In June 1991, the parties to the Gro-ton matter entered into, and the Superior Court approved, a settlement agreement as to that matter. Under the agreement, two funds were to be established and distributed. The first, consisting of $800,000 in an escrow account funded by the settling defendants, was to be distributed to the Plaintiffs and their counsel (in partial payment of counsel’s fee) within six months of execution of the agreement. These funds were in fact released to SCC & H in June 1991. SCC & H first deposited the funds in their client funds account; from that account, the firm transferred the portion constituting the firm’s fee, approximately $230,000.00, to the firm’s own operating account. (The date of the latter distribution is unclear.) This fee was paid entirely to SCC & H, not to Schlichtmann (at least not in the first instance). There is no evidence as to how the firm disbursed the funds; it is clear, however, that the firm, made no payment from it on the promissory notes.
6. The second fund, root of the present troubles, consisted of an additional $825,000 that, in June 1991, was deposited into an escrow account for ultimate distribution to the plaintiffs and their counsel. This fund was controlled by counsel for the Groton defendants, acting as escrow agent, not by Schlichtmann. Under the approved settlement agreement, the distribution of this fund was contingent upon and subject to approval of a remediation plan by the Massachusetts Department of Environmental Protection. The release of the second fund would require more legal work by Schlichtmann on behalf of the plaintiffs, which work eventually came to fruition only in 1995.
7. Jan Schlichtmann filed a petition for relief under Chapter 7 of the Bankruptcy Code on October 7, 1991, thus commencing the present bankruptcy case. Although he obtained the advice of an attorney, Joseph Schindler, in preparing his bankruptcy petition and related schedules and statement of financial affairs, Schlichtmann nonethe
*48
less filed the petition
pro se.
In its initial phase, his bankruptcy case was routine and uneventful: Schlichtmann filed the requisite bankruptcy schedules and statement of financial affairs; he appeared for and was examined at the statutorily-required meeting of creditors; the Chapter 7 Trustee reported that no assets would be available for distribution to creditors; no objection to discharge or to the discharge-ability of any debt was filed; and on January 28, 1992, the court entered a discharge order under 11 U.S.C. § 727 .
3
Two days later, the case was closed.
8. By operation of the Uniform Partnership Act as adopted in Massachusetts, a partnership is dissolved upon the bankruptcy filing of one of its partners. G.L. c. 108A, § 31(5) (“Dissolution is caused ... [b]y the bankruptcy of any partner.... ”). Therefore, the partnership of SCC & H was dissolved by operation of law
no later than
the date of Schlichtmann’s bankruptcy filing, October 7, 1991. Schlichtmann at times has testified that the partnership was dissolved upon his bankruptcy filing.
4
a.However, there is evidence in the record that dissolution occurred long before the bankruptcy filing. In the Statement of Financial Affairs he signed under penalty of perjury and filed in his bankruptcy case, Schlichtmann stated that he was a partner in SCC & H “until 12/90.” In response to a question asking him what occurred in December 1990 that effectuated or gave notice of his withdrawal from the partnership, Schlichtmann testified that, in December 1990 — a time when he was exhausted and his partners were carrying the partnership and, except for the Groton matter, he was not — he and his partners reached an oral agreement that the partnership thenceforth was theirs (i.e., the remaining partners’) alone and no longer also his. Schlichtmann drafted no written notice of his withdrawal; nor did the partners execute a written agreement memorializing the dissolution. (Transcript, 6-17-05, at pp. 160-162.) There is no evidence in the record as to precisely which day in December 1990 this alleged oral agreement was reached.
b. There is cause in the record to doubt that dissolution occurred in December 1990. First, one of the three promissory notes at issue was executed by William Crowley on behalf of SCC
&
H on December 31, 1990. This is inconsistent with dissolution of the partnership on or before that date. Second, even in June 1991, Schlichtmann himself continued to sign pleadings in the Gro-ton matter on behalf of SCC
&
H.
5
Third, in an affidavit of William Crowley (Debtor’s Ex. 2, p. 108), Mr. Crowley states that the partnership was dissolved in 1991.
c. Still, other evidence tends to corroborate that dissolution at least preceded the bankruptcy filing. In an August 27,
*49
1991 letter from William Crowley to the FDIC (as liquidating agent of BTB), Crowley explains: “One signer to the loans held by the F.D.I.C., Mr. Schlichtmann, now has the status of ‘Of Counsel’ to the firm. This means he is no longer a partner, and no longer has any ongoing business here.” This letter in on letterhead that still identifies the firm as
Schlichtmann,
Conway, Crowley & Hugo (emphasis added) but also lists Jan Schlichtmann as “Of Counsel.”
d. For present purposes, the Court need not decide when SCC
&
H was dissolved. It is sufficient to find, as I do, that the record is unclear, that dissolution is likely to have occurred as early December 31, 1990,
6
that it certainly did occur no later than August 27, 1991, and that Schlichtmann and the partnership failed to memorialize or keep records of this important event in their financial histories.
9. After Schlichtmann’s departure, the three remaining partners formed a new firm without Schlichtmann, eventually (though not immediately) becoming known as Conway, Crowley & Hugo, P.C. (“CC & H”). Here again, the precise date of the formation of the new firm is unclear: either 1991 or, at the latest, early in 1992. Immediately after his departure, Schlicht-mann became a sole practitioner. For a time, he continued to work for his former partners on an “of counsel” basis.
7
Nowhere in the record has he indicated what work he performed in that capacity and whether and how he was compensated for that work. It is unclear whether, during any period, he worked on the Groton matter on an “of counsel” basis and whether and how much he was paid by his former partners for such services.
10. After Schlichtmann left SCC & H, he entered into an agreement with his former partners. They agreed that Schlichtmann, as an independent practitioner, would take over from SCC & H the representation of the plaintiffs in the Gro-ton matter. For his continuing work on the case, Schlichtmann as an independent practitioner, would receive two-thirds of any fee that would be recovered in the matter; the former partners would receive the remaining one-third.
8
This agreement, too, was not reduced to writing. The agreement involved an appropriation of SCC & H’s interest in the Groton fee, which interest was subject to a security interest in favor of Boston Trade Bank, but neither Boston Trade Bank nor any subsequent assignee of its lien rights was party to or consented to this agreement. Schlichtmann has testified that the Groton plaintiffs were party to this agreement, but no evidence has been adduced to corroborate their knowledge of or participation in the agreement.
The date of the agreement, too, is unclear. Schlichtmann testified that the agreement occurred after his own bankruptcy filing, such that his right to a fee arising from the Groton matter came into existence only after his bankruptcy filing. There is reason to doubt Schlichtmann’s
*50
testimony about the timing. First, if dissolution of the firm occurred in December 1990, as Schlichtmann himself has testified, then the former partners would have had to address the status of the Groton matter very shortly thereafter. As Schlichtmann himself testified, this six-; month period between December 1990 and June 1991 was a critical and busy time in the Groton matter: a preliminary settlement had been reached, but resolution of the details required Schlichtmann’s expertise and familiarity with the case, which the remaining partners were unable to provide. Among the partners of SCC & H, only he could handle it. At least from December 1990, only he did handle it. He did so with the knowledge and (at least tacit) permission of his former partners: he took over the Groton matter from SCC
&
H, investing substantial time and effort (at least between December 1990 and June 1991) that in June 1991 resulted in an approved settlement agreement and an initial fee distribution. Did he do this without having discussed with his former partners whether and how he would be compensated for his post-dissolution efforts? It is difficult to believe that they would not have addressed and resolved this issue sometime before the first distribution in June 1991. Throughout these proceedings, Schlichtmann has adamantly maintained that, for all services he rendered from the moment he became an independent practitioner, he himself, as opposed to SCC & H, was entitled to compensation. I find it more likely than not that Schlichtmann reached his agreement with his former partners during this time period, and not after his bankruptcy, and that, if and to the extent that he had a separate right to a fee from SCC & H, he began earning his fee in the Groton case before his bankruptcy filing.
11. In the schedule of personal property that he filed in his bankruptcy case on October 7, 1991, Schlichtmann did not indicate that he personally had any interest in the fee payable from the Groton litigation. The form called for him to list “accounts receivable,” “other contingent and unliqui-dated claims of every nature,” “other personal property of any kind not already listed,” even “interests in partnerships.” Nowhere is the right to a fee from the Groton litigation mentioned or disclosed. Nor did Schlichtmann ever amend this schedule. Nor did Schlichtmann disclose his interest in SCC & H in response to the item regarding “interests in partnerships.”
9
12. Schlichtmann contends that at the so-called “meeting of creditors” in his bankruptcy case,
10
which meeting was held on November 5, 1991, his attorney, Joseph Schindler, orally disclosed to the Chapter 7 Trustee, Ellen Carpenter, that Schlicht-mann would be assuming responsibility for the Groton matter, the contingent nature of the recovery, and that a fee would be paid and shared with Schlichtmann’s former firm if Schlichtmann’s post-bankruptcy efforts in the matter were successful. For several reasons, the Court cannot determine the veracity of this contention. First, although an audiotape recording was made of this meeting, the tape has been lost or destroyed. Second, Mr. Schindler has passed away. Third, before his death,
*51
Mr. Schindler prepared an affidavit on the issue in 1998, but the averments therein were not subject to cross-examination; moreover, Schindler had prepared the affidavit in aid of his client, Schlichtmann, and therefore was hardly disinterested. Fourth, Carpenter had no notes from the meeting, her records having been destroyed in a flood. Fifth, and most important, Carpenter testified in 1999 that her memory of what happened at the meeting of creditors differed from and “conflicts with” Schindler’s (as stated in his 1998 affidavit)
11
and that she first learned of the contingent fee only much later, in 1998. In sum, the evidence presents an unresolved conflict on the issue. Therefore, I cannot find by a even preponderance of the evidence that Schindler made the disclosures that Schlichtmann contends he made. In any event, any disclosure that Schlichtmann may have made at the meeting of creditors, either through Schindler or otherwise, did not reach his creditors and did not satisfy any obligation that Schlichtmann may have had to disclose the same matters in his bankruptcy schedules.
18. After his bankruptcy filing in October 1991, Schlichtmann expended substantial time and effort on the Groton matter through the date of its successful resolution in June 1995. However, no evidence as been adduced as to how much time and effort he expended during this period, either in absolute numbers or as a fraction of total time he and SCO & H invested in the matter since its commencement. In November 1992, Schlichtmann associated with the firm of Thomas M. Kiley on an “of counsel” basis. Though Schlichtmann remained an independent practitioner, his work on the Groton matter from and after November 1992 required substantial services and support of Kiley’s firm. Schlichtmann has adduced
no
evidence as to the precise nature and extent of this service and support that Kiley’s firm provided.
14. In the late spring of 1991, before Schlichtmann filed his bankruptcy petition, the Boston Trade Bank, experiencing troubles of its own, was taken over by the Federal Deposit Insurance Corporation (“FDIC”). On February 5, 1992, after Schlichtmann’s bankruptcy case was closed, the FDIC, as liquidating agent of Boston Trade Bank, sold the Bank’s rights against the firm, including the three promissory notes and attendant security agreements and guarantees, to The Cadle Company, Inc. (“TCC”). The FDIC, as liquidating agent, effectuated the transfer by endorsing the promissory notes over to TCC with the endorsement on each note, “Pay to the order of: The Cadle Company, without recourse.” At the time, the principal balances owing on the three notes were $149,939.08 on the first, $45,000 on the second, and $40,000 on the third; the extent of interest and other charges then owing is not in evidence.
b.
The Cadle Company, Atlanta Joint Venture, and TCC’s Acquisition of SCC &H Notes
15. TCC is an Ohio corporation, incorporated in 1987. Daniel C. Cadle (“Daniel”) is its founder and sole owner and since its inception has been its president. TCC is in the business of purchasing and
*52
acquiring debt at discount for affiliated investment entities and then servicing and enforcing that debt for those same entities against the account debtors.
16. TCC purchased the SCC & H notes with funds provided by an Ohio limited partnership known as Atlanta Joint Venture Limited Partnership (“AJV”).
12
17. TCC is and at ah relevant times has been the general partner of AJV and an interest holder in AJV.
13
Since the formation of AJV in 1987, Daniel Cadle, TCC, and members of Daniel Cadle’s extended family have together owned all or, when not all, at least 75 percent of the equity interest in AJV; for a time, 20 or 25 percent was held by a close Mend of Mr. Cadle. AJV is a Cadle family enterprise and an affiliate of TCC.
18. In the 1987 Joint Venture Agreement by which AJV was created, TCC is identified as the Managing Joint Venturer, and is the only entity so designated, and is entitled to a “Management Fee” in the amount of 25 percent of the net profit before any distribution is made to Joint Venturers. The Joint Venture Agreement specifies:
The Joint Venturers have come together to purchase, on their joint bid, from time to time, pursuant to Asset Sale Agreements
14
... from the Federal Deposit Insurance Corporation and/or the Federal Saving and Loan Insurance Corporation, assets (along with the appropriate documentation to support such purchases as set forth in the Asset Sale Agreements);
and
The Asset Sale Agreement(s) whereby assets are purchased from the Federal Deposit Insurance Corporation and/or the Federal Saving and Loan Insurance Corporation shall be executed by the Cadle Company and/or Daniel C. Cadle on behalf of and for the benefit of this Joint Venture.
The Joint Venture Agreement further specifies:
The Managing Joint Venturer shall have full authority to do all things deemed proper by it in the conduct of the business of the Joint Venture. The Managing Joint Venturer shall also have full authority, power, and discretion concerning the acquisition, management, servicing, exchange, or disposition of any of all of the assets of the Joint Venture.... The Managing Joint Venturer is the attorney in fact as agent of the Joint Venture to create, prepare, complete, execute, file, swear to, deliver, endorse and record any and all instruments, assignments, documents, and writings as may be necessary from time to time on behalf of the Joint Venture.
19.In 1989, TCC entered into an agreement entitled “Loan-Servicing Agreement” with AJV. Daniel Cadle, as president of TCC, signed the agreement for TCC; Daniel Cadle, as president of
*53
TCC, as general partner of AJV, signed the agreement for AJV. The agreement appears to have continued in effect through the present, which is to say at all times relevant to the matters presently at issue.
20. Under the Loan-Servicing Agreement, TCC, as an independent contractor, agreed to act as manager of AJV and assumed responsibility for servicing the loans owned by AJV. With respect to management responsibilities, the Agreement states: “TCC is the manager for all business matters relating to AJV and is responsible for all management functions and decisions.” With respect to servicing responsibilities, the Agreement obligates TCC to service the loans of AJV in all respects: record keeping and accounting, collection and remittance of payments, safeguarding of collateral, customer service, delinquency control, and litigation. Among other things, the Agreement obligates TCC to “deal quickly and effectively with delinquent Loan borrowers.” It also specifies that “TCC shall initiate and consummate all litigation in the name of TCC and other acquisition procedures necessary to preserve the interest of AJV in all loan collateral.”
21. The FDIC transferred the SCC & H notes to TCC by endorsement, and TCC thereby became the holder of the notes. Although AJV had advanced the funds with which TCC purchased the notes, TCC never transferred the interest it thereby acquired in the notes to AJV. Until, in October of 2002, Schlichtmann acquired TCC’s interest in the notes at a Texas sheriffs sale, and except as modified by certain collateral assignments of the notes by TCC to a bank (as explained below), all legal title to the notes remained in TCC. As between TCC and AJV, it was always understood that TCC was holding, servicing, and enforcing the notes for the benefit of AJV — and was obligated to do so — and that TCC was obligated by the above-described Joint Venture Agreement and Loan-Servicing Agreement to remit proceeds of the notes to AJV. Still, title to the notes remained at all times in TCC. Moreover, although the relationship of TCC to AJV with respect to the notes was similar in many respects to the relationship of a trustee to a beneficiary, no express trust was ever created, and TCC did not hold the notes as trustee. It held all legal and beneficial ownership in its own name. Daniel Cadle testified that it was the practice of TCC to transfer to the investor (here AJV) the “beneficial interest” in notes acquired by TCC with investor funding within a short time after they were purchased.
15
With respect to the SCC & H notes, no document evidencing any such transfer of beneficial interest was ever executed. For accounting purposes, AJV and TCC both have treated the “beneficial interest” in the SCC & H notes as belonging to AJV, not TCC. Nonetheless, TCC never transferred any interest in the notes to AJV, and therefore AJV had no property interest in the notes. At most, it had a complex of contractual rights against TCC, under the Joint Venture Agreement and Loan-Servicing Agreement, by which TCC was obligated to AJV to enforce and service the notes and to turnover the proceeds of the notes as these were collected. This right was enforceable by AJV against TCC, but it did not attach to or follow the notes. It was a complex of
in personam
rights against TCC and not a property interest in the notes. When the Respondents refer to the “beneficial interest” of
*54
AJV in the SCC & H notes, it is this complex of
in personam
rights they are referring to, nothing more.
16
c.
Collateral Assignments of Notes
22. On December 9, 1994, TCC and AJV, as borrowers, entered into a loan agreement with Mahoning National Bank (“Mahoning”) to borrow $3,550,000 over a term of two years (the “1994 loan”). To secure the 1994 loan, TCC gave Mahoning a security interest in, and executed a collateral assignment of notes as to, certain promissory notes that it held for the benefit of AJV, including the $40,000 SCC
&
H note. Mahoning filed a UCC-1 financing statement as to this security interest. The collateral assignment stated: “It is expressly understood and agreed by the parties hereto that before default under the terms of the loan documents, Assignor shall have the right to collect the Collateral and profits therefrom, along with the right to retain, use and enjoy the same.”
23. On June 5, 1996, AJV, as borrower, and TCC, as guarantor, entered into a second loan agreement with Mahoning to borrow $500,000 over a term of thirty months (the “1996 loan”). To secure the 1996 loan, TCC gave Mahoning a security interest in, and executed a collateral assignment of notes as to, promissory notes that it held for the benefit of AJV. Schlichtmann alleges, the Respondents agree, and therefore the Court finds that the promissory notes given as collateral for this loan include the SCC
&
H notes.
17
The collateral assignment stated: “It is expressly understood and agreed by the parties hereto that before default under the terms of the loan documents, Assignor shall have the right to collect the Collateral and profits therefrom, along with the right to retain, use and enjoy the same.”
24.On March 10, 1997, AJV, as borrower, and TCC, as guarantor, entered into a third loan agreement with Mahoning to borrow $1,300,000 over a term of three years (the “1997 loan”). To secure the 1997 loan, AJV, but not TCC, gave Mahon-ing a security interest in, and executed a collateral assignment of notes as to, some 429 promissory notes, including the three SCC & H notes (among many others). Mahoning filed a UCC-1 financing statement as to its security interest under the 1997 loan, but it is unclear whether the financing statement included or referred to the SCC & H notes.
18
The collateral as
*55
signment stated: “It is expressly understood and agreed by the parties hereto that before default occurs under the terms of the Loan documents, Assignor shall have the right to collect the Collateral and profits therefrom, along with the right to retain, use and enjoy the same[.]”
25. The 1994, 1996, and 1997 loans were timely repaid. There is no evidence that any one of them was ever in default or that Mahoning ever exercised any rights under its security agreements as to the SCC
&
H notes.
26. In conjunction with the 1997 loan, TCC executed and gave to Mahoning, on or around March 10, 1997, a set of 46 allonges, each stating: “Pay to the order of Atlanta Joint Venture, an Ohio limited partnership, without recourse, representation or warranty. This Allonge shall have the same effect as though it appeared on the face of the note to which it is attached.” Each is signed by Daniel Cadle as president of TCC. Also in conjunction with the 1997 loan, AJV executed and gave to Mahoning, on or around March 10, 1997, a second set of 46 allonges, each stating:
“Pay to the order of The Mahoning National Bank of Youngstown ... without recourse, representation or warranty, as provided in that certain Loan Agreement dated as of March 10, 1997, by and between The Mahon-ing National Bank of Youngstown and The Cadle Company, an Ohio Corporation and Atlanta Joint Venture, an Ohio limited partnership, and as provided in the Loan Documents (as defined in the Loan Agreement). This Allonge shall have the same effect as though it appeared on the face of the note to which it is attached.”
Each is signed by Daniel Cadle as president of TCC, as general partner of AJV. When TCC and AJV delivered their sets of allonges to Mahoning, the allonges were free standing, not attached to promissory notes. Both sets of allonges were delivered to Mahoning with the understanding that, if the loan went into default and Mahoning needed to exercise its rights under the security agreement as to one or more of the promissory notes given it as collateral under the 1997 loan, Mahoning would, in its discretion, attach allonges to one or more of the promissory notes given as collateral, to effect endorsement of the notes first from TCC to AJV and then from AJV to Mahoning. The Respondents contend that the allonges were intended for use only with a specific subset of the promissory notes given as collateral, known as the CC Emerald Equities notes, to which subset the SCC & H notes did not belong. Finding no evidence to suggest that their use was limited to any specific subset of the 429 collaterally-assigned notes, the Court finds that they were intended for use with any notes that Mahoning chose. Schlichtmann has adduced no evidence that Mahoning ever attached an allonge to one of the SCC & H notes or to any note.
d.
Early Dealings: February 1991 to June 1995
27.Daniel Cadle performed the due diligence involved in TCC’s acquisition of the loan package containing the SCC & H notes from the FDIC. He also made the determination to bid on that package, and he did so primarily because of the presence of the SCC
&
H notes in the mix. After TCC’s acquisition of the SCC & H notes, however, Daniel had no substantial role in the collection of the notes until August, 2002. Rather, from immediately after the acquisition, oversight and collection of the SCC
&
H account were handled for TCC by Daniel’s brother, Cecil C. Ca-dle (“Cecil”), then vice-president of TCC.
*56
Cecil oversaw the account until his death in December 1999 or January 2000.
19
28. On February 14, 1992, shortly after TCC acquired the SCC & H notes, Cecil sent a letter on TCC letterhead to SCC
&
H, stating that TCC had purchased the firm’s loan from the FDIC in liquidation of Boston Trade Bank. The letter stated: “If by chance you, any guarantors or any of the co-makers of the note have filed bankruptcy, please let us know so we can mark our records accordingly.” On February 19, 1992, William Crowley sent Cecil a reply letter by facsimile transmission, on letterhead of Conway Crowley & Hugo, indicating that Sehlichtmann had “been declared bankrupt by the U.S. Bankruptcy Court in Boston.” TCC undertook no collection efforts against SCC
&
H, its partners, or the collateral until after it had so inquired and been informed about the possible bankruptcy of any obligor on the SCC
&
H account. TCC does not dispute that it had been notified of Schliehtmann’s bankruptcy filing at least as early as February 19,1992.
29. There is no evidence that any payment was made on the notes between TCC’s acquisition of the notes in 1991 and the commencement of litigation in 1995.
30. Cecil Cadle had no communication with Sehlichtmann in 1992. During that year and the next, Cecil Cadle communicated repeatedly with Schliehtmann’s former partners, especially William Crowley, in an effort to obtain payment from them or from the assets of the former partnership. Crowley assured Cecil that the former partners acknowledged the debt. Crowley also repeatedly assured Cecil that there remained plenty of collateral, mostly in the form of contingent fees that had not yet matured, including the Groton fee, from which the debt to TCC might ultimately be paid. Crowley also told Cecil that the former partners, and them new firm of CC & H, had no cash with which they could then pay the debt. He explained that the only sources of payment were the still-outstanding contingent fees of SCC & H, of which there were several, and that the largest and surest of these was the Groton fee. Crowley explained to Cecil that the Groton settlement had already been approved, that the funds, including those ultimately destined for attorney’s fees, were in escrow, that their distribution was assured, and that the distribution awaited only an approval by a state environmental agency. Crowley further explained that Sehlichtmann was the one of the former partners now monitoring and wrapping up the Groton matter. Crowley implored Cecil to refrain from taking collection action and to await the Groton distribution; he also sought to negotiate a settlement with Cecil under which TCC would accept partial payment in satisfaction of the whole. Cecil always responded that he would not negotiate until Crowley had funds in hand about which to negotiate. He did not thereby mean or promise that he (Cecil) would negotiate when Crowley had funds in hand. And he never indicated that he would settle for anything less than payment in full. Cecil made clear, and Crowley understood, that Cecil (on behalf of TCC) claimed a security interest in the whole of the Groton fee, was demanding and expecting turnover as soon as the fee was paid, and was not eon-
*57
senting to the former partners’ use of the fee for any purpose other than paymeñt of TCC. Crowley kept Schlichtmann abreast of Cecil’s communications with the former partners and of developments on that front.
31. Cecil first communicated with Schlichtmann in the early months of 1998; the precise date is unclear. In that instance, as in all subsequent communications between them through June, 1995, Schlichtmann initiated the telephone call.
20
They communicated only by telephone— not at all in writing, nor did either keep records of their communications — and they did so on only a few occasions before litigation erupted in June of 1995.
32. Schlichtmann contends that his first call to Cecil was precipitated by statements Cecil had made to Crowley and which Crowley had in turn relayed to Schlichtmann. Schlichtmann testified that Crowley had told him that Cecil had told Crowley that Schlichtmann had committed fraud in his bankruptcy case, that Schlicht-mann is “not out of this yet,” that Schlicht-mann had taken over the Groton case, that this was a fraud, and that Cecil had been investigating Schlichtmann and had been asking questions over at the bankruptcy court about him. Schlichtmann contends that these statements by Cecil to Crowley were intended by Cecil to reach Schlicht-mann, that they were threatening and intimidating, and that they were intended by Cecil to pressure Schlichtmann into paying on the debt discharged in bankruptcy. Cecil denied having made the alleged statements. Schlichtmann’s testimony as to what Cecil told Crowley is hearsay and unreliable, and no independent evidence of these statements has been adduced.
21
Nor have I evidence of the conversations and context in which the alleged statements were made. The Court therefore cannot find that Cecil made the statements Schlichtmann attributes to him, much less that he did so with intent that they be relayed to Schlichtmann in order to intimidate him into paying his discharged debt.
33. This first telephone conversation began with Schlichtmann expressing anger about what he understood to be Cecil’s views: that the Groton receivable was TCC’s collateral and that TCC was entitled to turnover of the full amount of the Groton fee upon its distribution. When Schlichtmann calmed down, Cecil confirmed that this was indeed his view: “It’s my car. You drove off with my car.” In substance and as Schlichtmann quickly understood, “You’ve got my collateral, and I want it.” Cecil and Schlichtmann then argued about whether Schlichtmann was entitled to be compensated from the expected Groton fee for his post-bankruptcy efforts in the Groton matter, or whether the whole of the fee remained Cadle’s collateral.
34. Schlichtmann contends that Cecil also said, in this conversation, “You didn’t list it [the Groton fee receivable] in your bankruptcy schedules, and this is a fraud.” I cannot find that Cecil said this in this conversation. Cecil did eventually learn that Schlichtmann had not listed the Gro-ton receivable in his schedules, and upon so learning believed this was fraud, but probably not until 1997 or 1998, after Cecil and TCC had commenced discovery in litigation commenced by TCC against Schlichtmann and others.
*58
35. For the balance of the first conversation, and after making no progress on his and Cecil’s competing claims to the Groton fee, Schlichtmann changed tack and attempted to persuade Cecil not to pressure his former partners for payment but instead to wait for the Groton settlement. The details of this discussion, and of subsequent discussions in the same vein, are entirely unclear. Both Cecil and Schlichtmann contend that as a result of this conversation and of subsequent conversations over many months between and among Schlichtmann, Cecil, and Crowley, the three came to what they called an “understanding.”
36. Schlichtmann and Cecil nonetheless differ markedly on the terms of their alleged understanding. No understanding was ever reduced to writing. Cecil testified that the understanding was as follows: if TCC did not take collection action against Schlichtmann’s former partners, and refrained from seizing the proceeds of other smaller receivables that constituted TCC’s collateral, TCC would be paid in full from the Groton receivable at the time of the second distribution. Schlichtmann testified to a different understanding: if TCC refrained from taking collection action against Schlichtmann’s former partners, and refrained from seizing the proceeds of other smaller receivables that constituted TCC’s collateral — and which Conway Crowley & Hugo desperately needed to stay in business — then, upon payment of the Groton fee, Schlichtmann’s former partners would discuss a settlement with TCC.
37. For several reasons, I find they had no meeting of the minds at all and no agreement, nothing in the nature of a contract. First, neither Cecil nor Schlicht-mann trusted the other, and both were experienced business people, Schlichtmann as an attorney and Cecil as a long-practiced collector of claims for TCC; had they had an agreement, they would most certainly have reduced it to writing. Second, both were well aware that Schlichtmann had received a discharge and therefore that any agreement between them would have to either meet the requirements of a reaffirmation agreement or skirt carefully around the discharge; both knew and understood that any arrangement between them that did not address these issues on paper was no agreement at all. Third, the record makes clear that Cecil had no intention to compromise regarding the SCC & H notes: it is inconceivable that he would have obligated himself to forbear, especially in exchange for a mere promise of negotiations at a later date.
38.In the District Court trial between TCC and Schlichtmann (described below), TCC maintained,.for a time, that if Cecil and Schlichtmann did not actually enter into an agreement, then one could find, in the alternative, that (a) Schlichtmann promised Cecil that if TCC refrained from taking collection action against his former partners, then he would give TCC the whole of the Groton fee, or at least the portion thereof to which he was entitled, and (b) Cecil relied on this promise to his detriment. (This was the basis for the promissory estoppel theory that TCC advanced in that action.) The evidence does not rise to the level of establishing either (a) or (b). First, Schlichtmann surely urged Cecil to forbear and assured him in many ways and forms that, if he did forbear, TCC would be paid from the Groton fee, but it is unlikely, and surely not proven, that he quite promised to give TCC his share of the Groton settlement in exchange for his forbearance. Cecil may well have understood Schlichtmann to have so promised; Schlichtmann was telling Cecil anything he could to buy time for his former partners and to forestall legal action by
*59
Cecil to seize the Groton fee.
22
Second, I find that, although Cecil did forbear from taking collection action against the former partners, he did not do so in reliance on Schlichtmann’s promise or assurance. Cecil did not deem Schlichtmann trustworthy, and he knew that oral promises from Schlichtmann were' unenforceable. In short, Cecil did not rely on Schlichtmann’s promises and assurances. He did forbear, but for other reasons.
39. Cecil did stay his hand until the Groton proceeds were distributed in June, 1995: he took no action to seize the proceeds of other, smaller accounts receivable of SCC
&
H, allowing Schlichtmann’s former partners to use them; and he took no action against Schlichtmann.
40. Cecil had reason to believe, and did believe in good faith at all relevant times, that by virtue of Schlichtmann’s having taken control of the Groton litigation, Schlichtmann had taken control of TCC’s collateral, SCC & H’s rights under its contingency fee agreement to a share of the proceeds that were already being held in escrow in the Groton litigation. On the basis of extensive testimony by Cecil, both at trial and in deposition, it is clear to the Court that, at all relevant times from TCC’s acquisition of the SCC & H notes until his death, Cecil was interested in Schlichtmann-as the attorney having control of an asset of SCC & H, the Groton receivable, in which TCC had a security interest. Cecil had no interest in pressuring Schlichtmann to pay his discharged debt to TCC. Rather, his interest in Schlichtmann and the purpose of his conversations with Schlichtmann during this period — from TCC’s acquisition of the notes in 1992 until and through the commencement of litigation in June 1995 — was clear and limited: to ensure that, upon release of the Groton settlement from escrow, Schlichtmann would honor TCC’s security interest by turning over the Groton fee to TCC, to the extent necessary to satisfy SCC & H’s debt on the notes.
e.
The Credit Report
41.In April 1993, Schlichtmann, while in the process of applying for a residential mortgage, was informed that one of the national credit reporting services had reported, on a report of Schlichtmann’s credit, that Schlichtmann was obligated to TCC in the amount of $149,000, that this account had opened in February, 1992 — the date is important because, if the debt in question arose after Schlichtmann’s bankruptcy filing, it would appear not to be subject to his discharge — and that this debt was “in collection.” In the language of credit reports, the term “in collection” means actively being collected by a person or agency whose job it is to collect a bad debt. In fact, Schlichtmann’s debt to TCC originated before his bankruptcy filing, not in February 1992, and had been discharged, and TCC was not collecting it from Schlichtmann; therefore the debt was not “in collection.” Schlichtmann immediately called Cecil to complain that the report incorrectly identified the debt as (a) originating in 1992 and (b) being in collection. Schlichtmann demanded that TCC submit a corrective report to the credit reporting agency to the effect that the debt had been discharged in bankruptcy. According to Schlichtmann, Cecil assured Schlichtmann that he would do so. From the fact that Schlichtmann has not made allegations or produced evidence to the contrary, the Court finds that Cecil and TCC addressed the problem to Schlicht-
*60
mann’s satisfaction. Schlichtmann did not go forward with the mortgage transaction, but for reasons other than the credit report. He was not denied a mortgage loan on account of the credit report. Nor was Schlichtmann otherwise damaged by the report. In fact, Schlichtmann testified that he never even checked to see whether the credit report had been corrected.
42. Credit Reporting Bureau, Inc. (“CRB”) was a small business, based in Attleboro, Massachusetts, that prepared residential mortgage credit reports for lending institutions who were considering consumers for residential mortgages. In April 1993, CRB was retained by Plymouth Mortgage Company of Danvers, Massachusetts to prepare a residential mortgage credit report in conjunction with Schlichtmann’s mortgage application. William Saunders, who in 1993 had been the office manager of CRB, testified in the 1999 District Court trial that CRB first obtained the information that the Cadle debt was “in collection” from a credit report issued by one of the three major credit reporting services.
23
He also testified that an employee of CRB (not Saunders himself) called TCC in April 1993 to verify that the information in the report was accurate, and that an employee of TCC, whom Saunders could not identify, did verify the reported information, including that the account opened in 1992 and was properly rated 1-9, which meant “in collection.”
43. Schlichtmann contends that the credit report contained the false information about Schliehtmann’s account — that the debt originated in 1992 and was in collection — because TCC had sent this information to one of the three major credit reporting services, and I so find. Although the Court has little evidence as to precisely how the information in the credit report made its way to the credit reporting service — and such evidence as I have may at best be characterized as guesswork by Cecil and Daniel Cadle — I find that it originated in a report from TCC. I do so for two reasons: first, because it is improbable that a credit reporting service would have obtained that information without a report from TCC; and second, because the evidence shows that upon inquiry by an employee of CRB, an employee of TCC verified precisely the information that CRB had first found in a report of one or more of the major credit reporting services, including that the debt was “in collection.” I further find that the information transmitted by TCC to the credit reporting service included the information that the account was opened in 1992 and was in collection.
44.Schlichtmann further contends that TCC’s issuance of the false credit information to a credit reporting service was an act calculated to pressure him to pay on a debt that had been discharged in bankruptcy. I construe this as an allegation that the report of the false information was made by an agent of TCC with intent thereby to pressure Schlichtmann into paying his discharged debt. I find no evidence to support this allegation and find it more likely than not that the erroneous information was a result of mistake or negligence, not of intent to pressure or intimidate Schlichtmann into paying a debt. First, in the early years of this loan, only Cecil had responsibility within TCC for the SCC
&
H notes, but Cecil testified credibly that he did not send this informa
*61
tion to a credit reporting service and was unaware that TCC had sent any information; and he corrected the problem as soon as it was brought to his attention. Second, Schlichtmann has submitted no evidence as to how the information was obtained by the credit reporting service; notably, he produced no witness or evidence from the credit reporting service as to how, when, or from whom the information was obtained. Third, and on the basis of testimony by Daniel Cadle, it is likely — or, more precisely, more likely than any alternative explanation — that the information was transmitted, in the first instance, by TCC as part of a routine and periodic transmission of a batch of computerized data, each concerning many hundreds of accounts, by TCC to a reporting service. Fourth, the record contains no evidence as to the personnel and procedures at TCC that were involved in the gleaning and input of the erroneous data that was transmitted in this batch. Fifth, although there is evidence that an employee of CRB called TCC in April 1993 to verify that the report was accurate, and that someone at TCC did verify that the account was then listed in TCC’s own records as opened in 1992 and in collection, there is no evidence as to who at TCC made that verification and why they did so. Cecil denied, credibly, that he had been contacted about a credit report; and, on the basis of testimony by Daniel Cadle, I find it unlikely that such an inquiry would have been referred to Cecil. Sixth, it is easy to imagine innocent reasons why someone at TCC may have categorized the account as originating in 1992 and in collection: the account was acquired by TCC in 1992; and, as to SCC & H, the collateral (which was in Sehlieht-mann’s control), and three of the guarantors (albeit not Schlichtmann), the SCC & H notes were indeed in collection. For these reasons, I cannot find by clear and convincing evidence that TCC’s report that the debt originated in 1992 and was in collection was an attempt to collect a debt.
f.
1995: The Fee is Distributed, and TCC Files Suit
45. Under the 1991 settlement agreement in the Groton litigation, the second distribution was contingent upon and subject to approval of an on-site remediation plan by the Massachusetts Department of Environmental Protection (“DEP”). Had the DEP insisted on a remediation effort that included also off-site efforts, the defendants would have had no obligation to distribute the second fund. Obtaining approval of a remediation plan that was limited to on-site efforts would require the cooperation of the Groton plaintiffs and of Schlichtmann as their counsel; in fact the settlement was designed to give them a financial interest in so cooperating. As it turned out, the DEP never did approve an on-site remediation plan. Rather, at some point after the date of the settlement agreement, the relevant Massachusetts environmental regulations were changed in such as way as to make literal compliance with the terms of the agreement infeasible or impossible. To address this change, on May 18, 1995, Schlichtmann, on behalf of the Groton plaintiffs, negotiated and entered into a letter agreement with one of the Groton defendants. By the agreement, a new and similar contingency was substituted for the old:
The parties agree that submission to the Massachusetts Department of Environmental Protection (“DEP”) of a Response Action Outcome Statement signed by a licensed site professional ... which provides that the sole appropriate and necessary remedy for the Conductorlab Property and any and all contamination allegedly on or arising from the Conductorlab Property consists of On-Site Remediation
*62
Activities, without any Off-Site Remediation Activities, equivalent of [sic] receiving a written determination from the DEP as provided in ... the Settlement Agreement.
The Court has no evidence as to precisely when this alternate contingency was satisfied, but the letter agreement did lead to release of the second Groton settlement fund from escrow in short order.
46. Schlichtmann played an important and crucial role in satisfying the conditions required for release of the second distribution. Despite the testimony of the Groton defense attorneys, however, his precise role remains very unclear. Moreover, the extent of his role, in terms of time invested, or in relation to the amount of time he invested in the Groton matter before the 1991 settlement, or before his bankruptcy filing, or before his departure from SCC & H, is nowhere in evidence.
47. In June 1995, counsel for the Gro-ton defendants, as escrow agent, released the funds to Schlichtmann, as plaintiffs’ counsel. Of this second distribution, $300,000 constituted the balance of the contingency fee payable to plaintiffs’ counsel in the matter. Of this $300,000, Schlichtmann, on June 28, 1995, paid $100,000 to the firm of Conway, Crowley & Hugo, P.C., which, on the next day, paid $49,698.39 thereof to its landlord for long overdue rent and paid draws of $6,000 each to Messrs. Conway, Crowley, and Hugo, leaving a balance of $32,301.61 in the coffers of the firm. Schlichtmann promptly paid the remaining fee of $200,000 to himself and, from that portion, paid $110,000 to attorney Thomas Kiley. Neither Schlichtmann nor Conway, Crowley
&
Hugo, P.C. turned any portion of the fee over to TCC.
48. In conversations with Cecil in May and June, 1995, Crowley had notified Cecil that the second distribution would soon be paid. Cecil caused TCC to retain counsel, the Massachusetts firm of Doonan
&
Graves, and by counsel to file a complaint on June 29, 1995, in the United States District Court for the District of Massachusetts. The initial complaint, which is not in evidence, named only five defendants: SCC
&
H and Messrs. Schlicht-mann, Conway, Crowley, and Hugo. With the complaint, TCC filed a motion for a temporary restraining order. On June 30, 1995, the District Court entered a temporary restraining order and, after a hearing on June 12, 1995, a preliminary injunction. The preliminary injunction enjoined defendants Kevin Conway, William Crowley and Michael Hugo from disbursing any part of the Groton fee received by them until further order of the court. It does not appear that any injunctive relief was entered against Schlichtmann. As the motion for temporary restraining order is not in evidence, it is impossible to determine what relief, if any, it sought against him.
49. In a conversation between Schlicht-mann and Cecil, shortly after the preliminary injunction hearing, Schlichtmann was again incensed that Cecil and TCC would take the position — and now make it the basis of their District Court suit against him — that TCC had been entitled to the whole of the Groton fee, this despite his having heard Cecil articulate the position on several occasions since January 1993. In that conversation, Schlichtmann told Cadle: “Mr. Cadle, it appears you want to get into a morass of litigation, and it looks like this is going to go on for a very, very long time.” When Respondents’ counsel asked Schlichtmann whether this had been a threat, he denied that it had been, but not persuasively.
50. By leave of court, TCC filed a first amended complaint on September 11, 1996 and a second amended complaint on April 28, 1997. As against Schlichtmann, the
*63
amended complaints were essentially identical, each stating only two counts against him: one to reach and apply proceeds he had received from the Groton legal fee, on the basis that such proceeds were subject to TCC’s security interest, originally given by SCC & H to TCC’s predecessor in interest; and a second for conversion, on the basis that he had received and, despite demand, failed to turnover the Groton legal fee, which was subject to TCC’s security interest. Although the complaints sought relief against SCC & H and Schlichtmann’s former partners for their liability on the SCC
&
H notes and the guarantees thereof, TCC was careful to specify in both that no such relief was being sought against Schlichtmann.
51. With his answer to the first amended complaint, Schlichtmann filed a counterclaim against TCC, stating two counts. The first alleged that TCC’s prosecution of the District Court complaint against him was a violation of his bankruptcy discharge. The second alleged that TCC’s assertion of a security interest in the Gro-ton receivable was unfounded and therefore an unfair business practice, knowingly and willfully committed, in violation of Massachusetts G.L. c. 93A, § 11, for which Schlichtmann demanded treble damages. Notably, Schlichtmann’s counterclaim for violation of the discharge sought damages only for prosecution of the District Court action, not for two other alleged violations of the discharge for which he now seeks relief and which had by then occurred (or allegedly occurred): the credit report and Cecil’s allege threats to expose Schlicht-mann for bankruptcy fraud.
g.
1998: TCC Instigates Inquiry
51. In late February or early March of 1998, while discovery was still proceeding in the District Court action, TCC’s Attorney, John Doonan, communicated with the trustee in Schlichtmann’s bankruptcy case, Ellen Carpenter, to state that TCC believed that Schlichtmann had failed to disclose certain assets in his bankruptcy schedules and statement of financial affairs. Specifically, Doonan indicated that Cadle alleged (a) that Schlichtmann had received a fee of $230,000 within six months of his filing which was not disclosed and (b) that Schlichtmann had failed to disclose that he was entitled to receive an additional fee of $265,980. Doonan also supplied Carpenter with documents regarding the disputed fees.
53. When she received this communication from Doonan, Carpenter was representing TCC in a separate and unrelated matter, and she had earlier represented TCC in two other matters. All three matters she handled for TCC commenced after Schlichtmann’s bankruptcy case had been closed. In the course of her representation of TCC, no one from TCC had ever discussed the Schlichtmann case with her. However, by virtue of her obligations to TCC in these other matters, she understood that she was no longer disinterested, that she could no longer serve as trustee in Schlichtmann’s bankruptcy case, and that it would be inappropriate for her to investigate TCC’s allegations. Therefore, on March 11, 1998, she sent a letter to J. Christopher Marshall, who was then the United States Trustee for this region. Among other things, Marshall oversaw the panel of trustees in chapter 7 cases in the District of Massachusetts. In the letter, Carpenter related TCC’s allegations and attached the documents Doonan had given her. Indicating that she had also spoken to Schlichtmann about the allegations, she also set forth his response: that he had not been obligated to disclose either payment, the earlier because it had been received and distributed well before his bankruptcy filing, and the latter because contingencies to be met prior to payment
*64
meant that he had not been entitled to it at the time of his bankruptcy filing. Finally, after explaining that she was no longer disinterested and would not be qualified to serve as trustee, she asked Marshall to appoint another trustee to review TCC’s allegations and to determine whether any further action was required. Carpenter sent copies of the letter to Doonan and Schlichtmann.
54. On March 17, 1998, just six days after Carpenter transmitted her letter to the U.S. Trustee and a copy to Schlicht-mann, Cecil personally faxed a note to Schlichtmann, stating:
I will participate in further settlement talks with you if you fax to me an agreement that nothing either of us talks about shall be disclosed to others unless we reach a written agreement signed by you and I. You, of course, still have permission of John Doonan to speak directly with me. All issues and all parties release are open for negotiation.
No evidence was submitted that Schlicht-mann responded to this communication or that Cecil ever communicated with Schlichtmann again about settlement. It was Cecil’s practice to handle all settlement discussions himself, never through counsel.
55. On March 24, 1998, and in relation to the inquiry requested by Carpenter at Doonan’s behest, Doonan sent a letter of his own to the Office of the United States Trustee, with copies to Cecil and Schlicht-mann, in which he reiterated and expanded upon the allegations he’d made to Carpenter. In the letter Doonan alleged, with reference to supporting evidence, (a) that, as of the date of Schliehtmann’s bankruptcy filing, the Groton settlement was final; (b) that the second distribution was certain and contingent only on state approval of the defendants’ on-site remediation plan, not on any action or negotiations by the plaintiffs or Schlichtmann as their attorney; (c) that Schliehtmann’s post-bankruptcy actions in obtaining the second distribution were limited; and (d) that “[o]ur conversations with several of the
Groton
defense attorneys have confirmed the finality of the settlement and the limited actions of Mr. Schlichtmann in ‘obtaining’ the second distribution.” Doonan appended to the letter a list of five attorneys who had served as counsel for the defendants in the Groton matter; however, Doonan nowhere specified to which of these attorneys he had spoken. In closing, Doonan stated that he and his client were bringing these matters to the attention of the United States Trustee because it was important to the outcome of several key issues in TCC’s civil litigation with Schlichtmann. “In this regard my client requests that your office articulate the rationale behind its decision, and that you disclose the information considered in reaching your conclusions .... This will prevent the decision to reopen or not to reopen this matter from being misconstrued in other contexts.”
56. In response to the letters by Carpenter and Doonan, Schlichtmann himself contacted the United States Trustee to explain his side of the matter. He also adduced evidence in his own defense, including an affidavit from his bankruptcy attorney, Joseph Schindler, and affidavits from the five Groton defense attorneys whom Doonan had listed in his letter.
57. In response to the letters by Carpenter and Doonan, the United States Trustee’s office undertook an investigation in which, among other things, it interviewed Doonan and Schlichtmann and considered the evidence and materials each had adduced. On October 27, 1998, the United States Trustee, Christopher Marshall, sent a letter to Carpenter with cop
*65
ies to Doonan and Schliehtmann, stating that after an investigation, “we do not believe we have sufficient information at this time to move to reopen this case and ask the court to appoint a new trustee.... [PJending new information we do not intend to initiate reopening this case.” This letter was Marshall’s final pronouncement on the matter. It detailed no reasons for the decision announced therein.
58. In his letter to the United States Trustee, Doonan had represented that “[o]ur conversations with several of the
Groton
defense attorneys have confirmed the finality of the settlement and the limited actions of Mr. Schliehtmann in ‘obtaining’ the second distribution.” This representation was false. Reneau Langoria is the attorney from Doonan’s firm who contacted the Groton defense attorneys; she had contacted four of the five listed attorneys. Two of these had told Langoria that, with the 1991 settlement agreement, their involvement in the Groton matter had come to an end, and therefore that they had no personal knowledge of the extent of Schlichtmann’s continued involvement thereafter. The third attorney, Michael Leon, told Langoria that he was aware that Schliehtmann had played an active role after approval of the settlement agreement, in the DEP approval process. He also told Langoria that Attorney Jane Wasman would be the most knowledgeable attorney concerning Schlichtmann’s involvement after approval of the settlement agreement. The fourth attorney, Allen Kezsbom, told Langoria that DEP’s approval of the on-site remediation plan had been very uncertain, that Schliehtmann had been actively involved in obtaining that approval, and that Attorney Jane Wasman would be the most knowledgeable attorney concerning Schlichtmann’s involvement after approval of the settlement agreement. Each of the four attorneys stated, and I find, that Doonan’s statement to the United States Trustee — that the attorneys had confirmed that Schlicht-mann’s actions in obtaining the second distribution had been “limited” — was not an accurate or appropriate characterization of what he or she had reported to Langoria. Langoria never contacted Jane Wasman, but probably only because Wasman was out of the country at the time.
24
In view of the fact that none of the attorneys had confirmed that Sehlichtmann’s role had been limited, and that TCC offered no explanation for the discrepancy between the letter and the truth, I conclude that Doonan’s misrepresentation was knowing.
59. In contacting Carpenter and sending the letter to the United States Trustee, Doonan was acting on behalf of TCC and with Cecil’s knowledge and authorization. Cecil denied he had authorized or known that Doonan had contacted Carpenter or sent the letter, but his testimony is flatly incredible for several reasons. First, Doo-nan himself repeatedly indicated in the letter that he was acting on behalf of his client
(e.g.,
“My client regrets having to bring this matter to your attention.” And “my client requests.... ”). Second, when asked at trial whether Cecil had authorized the letter, Doonan did not deny that he had but stated only that the letter spoke for itself; in view of the contents of the letter, I construe Doonan’s answer as meaning that Cecil had authorized it. Third, Doonan sent a copy of the letter to Cecil.' Fourth, Assistant United States Trustee John Fitzgerald, to whom Marshall had assigned this matter, understood,
*66
after later discussing the matters in the letter with Doonan, that Doonan was acting for TCC. And fifth, in view of the potential consequences of this letter for TCC’s action against Schlichtmann,
25
Doo-nan should not and would not have undertaken to send the letter without his Ghent’s prior approval. I find with a high degree of certainty that Cecil knew of and authorized Doonan’s sending of this letter and of his earlier communication with Carpenter.
60. Schlichtmann alleges that Doonan’s communication with Carpenter and his subsequent letter to the United States Trustee were part of a malicious effort by TCC, based on fabricated evidence, to pressure and coerce Schlichtmann to pay TCC on the discharged debt. The Court finds as follows. First, and to reiterate, Doonan’s communication with Carpenter and his subsequent letter to the United States Trustee were authorized by Cecil and therefore by TCC; they were acts of TCC. Second, this attempt by TCC to instigate an inquiry was intended by TCC to serve several purposes: to obtain a determination as to whether Schlichtmann, as debtor, had hidden assets and made misrepresentations in his schedules and, if so, whether his case should be reopened to seek to revoke his discharge and possibly to recover for the estate any assets not disclosed (or the value thereof) for distribution to creditors; to assist in obtaining discovery from Schlichtmann;
26
and, not least, to pressure Schlichtmann into settling the claims asserted by TCC against Schlichtmann in the District Court action. Third, though Doonan’s letter included a misrepresentation about what the Groton defense attorney’s had told Langoria, TCC had good faith reasons to believe that Schlichtmann had made, or at least may have made, misrepresentations in his schedules about the Groton fee.
61. Fourth, it is unclear whether TCC’s instigation of this inquiry was an attempt to collect not merely TCC’s conversion claim against Schlichtmann but also TCC’s discharged debt. There are reasons to suspect that it was: (a) TCC’s instigation of the inquiry was designed to and did communicate to Schlichtmann that his discharge was vulnerable, subject to attack and possible vacatur; (b) in his fax regarding settlement discussions, Cecil had insisted on a confidentiality agreement and stated that “all issues” were open for negotiation; and (c) Cecil’s denial that he was behind this attempt to instigate an inquiry could be evidence of a guilty conscience, evidence that in this particular tactic he had stepped over a line.
27
Still, these are
*67
grounds only for suspicion and do not amount to clear and convincing evidence. Settlement discussions are often conducted under conditions of confidentiality. “All issues” is hardly a clear indication that inappropriate issues would be addressed, especially in litigation involving counterclaims and multiple defendants; Cecil did in fact enter into and consummate a settlement in the following months with the other defendants in the action. The vulnerability of Schlichtmann’s discharge was not an unfounded allegation but simply a fact of life, given Schlichtmann’s nondisclosure of the fee and the uncertainty (at that time and still today) regarding the timing of the transfer of rights from the SCC & H to Schlichtmann and regarding the extent to which the second distribution may have been earned before the bankruptcy filing; and TCC, as a creditor whose debt had been discharged in a case without assets for distribution, had good cause and standing to raise these issues on their own merits. And Cecil’s denials may be evidence of a guilty conscience, but they are far from clear evidence. More importantly, I have no evidence of any actual demand by Cecil during this period for payment from Schlichtmann in any specific amount, much less an amount that exceeds what TCC could reasonably hope to obtain as a judgment on the conversion claim. Cecil was pressuring Schlichtmann to settle the conversion claim; the allegation that he was pressuring Schlichtmann to pay something more remains conjecture.
h.
1997-2001: District Court
Action—
Pretrial Matters, Trial, Judgment, and Appeal
62.As of December 11, 1998, no payments had been made on the SCC & H notes, and the total due was $480,236.46. On December 31, 1998, TCC and all defendants other than Schlichtmann and Kiley filed a stipulation of dismissal in the District Court action. The terms of TCC’s settlement with these other defendants are not in evidence. The record contains evidence of only one payment on the SCC & H notes after December 11, 1998, a $20,000 payment from Kevin Conway (paid by a check from his firm, Conway, Crowley & Homer, P.C.), dated December 27, 2000. It is likely that other payments were made pursuant to the settlement agreement: Daniel Cadle testified that the three guarantors (other than Schlichtmann) paid “maybe $75,000 each or — or some amount, I don’t remember what — on their personal guarantees.” I have no further evidence of when or in what amounts these payments were made.
63. On May 2, 1997, Schlichtmann and Kiley filed a joint motion to dismiss or for summary judgment; TCC opposed the motion, and the Court denied it on October 8, 1997. On March 2, 1998, Schlichtmann and Kiley filed a second motion for summary judgment, and on April 6, 1998, Schlichtmann and Kiley filed a motion to strike TCC’s pleadings and to dismiss its claims. Both motions were opposed by TCC and, on November 2, 1998, denied by the court. Schlichtmann has adduced no evidence of the substance of these motions or of the arguments asserted by TCC in opposition to them.
64. On December 31, 1998, Schlicht-mann and Kiley filed yet another joint motion for summary judgment on TCC’s claims for relief against them. TCC opposed the motion and filed a cross-motion for summary judgment on the same claims. In its cross-motion, TCC sought a determination that its perfected security interest in the entire Groton fee continued notwithstanding the dissolution of the SCC & H partnership and notwithstanding that Schlichtmann performed work on the case postbankruptcy. The District Court denied both motions, holding that TCC’s se
*68
curity interest extended to only so much of the Groton fee as had been earned by SCC
&
H before it dissolved; Schlichtmann himself, as an independent practitioner, earned and was entitled to the balance. Because the agreed facts did not permit a determination of whether the actual distribution of the proceeds (two-thirds to Schlichtmann and one-third to his former partners) reflected the relative contributions of Schlichtmann and the firm, both motions had to be denied.
65. In the memorandum and order by which it denied the cross-motions for summary judgment, the District Court noted that only two of TCC’s claims in that action remained unresolved: the conversion count against Schlichtmann; and a count against Kiley to reach and apply sums paid by Schlichtmann to Kiley. It would appear, then, that TCC’s reach and apply count against Schlichtmann (not the reach and apply count against Kiley) had by then been dismissed. When and how that dismissal occurred is entirely unclear; I find no record of it on the docket of the District Court action.
66. Over ten days in November and December, 1999, the District Court conducted a jury trial on TCC’s conversion claim against Schlichtmann. At the start of the trial, the court dismissed TCC’s only other remaining count, the reach and apply against Kiley. The court also ruled that Schlichtmann’s counterclaims would not be tried to the jury, that the conversion count would be tried first, and that the court would decide the counterclaims afterwards.
67. At the commencement of the trial, the conversion count proceeded on an “apportionment theory.” Consistent with the ruling of the District Court on the cross-motions for summary judgment, the conversion count turned on the proper apportionment of the $300,000 fee between the predissolution efforts of SCC & H and the postdissolution efforts of Schlichtmann as a sole practitioner. TCC would be entitled to maintain a conversion action only as to that portion of the fee that was properly apportioned to the predissolution work of SCC & H. Accordingly, at the commencement of the trial, TCC’s efforts and theory of the case were consistent with and limited to this apportionment theory.
68. During the trial, however, two further theories arose. Under the second theory, the contract theory, TCC could establish a right to the whole of the fee by proving that Schlichtmann had promised to turnover his full share to TCC upon its distribution in exchange for a promise by TCC to refrain from taking collection action against Schlichtmann’s former partners, and that TCC had refrained from such collection action as promised. The third theory, the promissory estoppel theory, was a variation on the second: TCC could establish a right to the whole of the fee by proving that Schlichtmann had promised to turnover his full share to TCC upon its distribution if TCC refrained from taking collection action against Schlicht-mann’s former partners, and that TCC relied on that promise to its detriment. In the view of the District Court, neither theory was an alternative to conversion; both were merely alternate ways of establishing the property interest that is a necessary element of conversion. In colloquy concerning the jury charge, the court stated: “I’m not submitting a breach of contract claim on behalf of the plaintiff to the jury. It is a conversion claim. It will involve some contract principles to find that the property lay in the place that the plaintiff needs to have it ... lie.”
69. The contract and promissory estop-pel theories formed no part of TCC’s prosecution of the District Court action until the fifth day of trial. On that day, Schlichtmann himself (not TCC) elicited
*69
from Cecil, on cross-examination, the testimony that constitutes the evidentiary basis for these theories. And the court (again, not TCC) first recognized this evidence as constituting a basis for a new theory of recovery, specifically the contract theory. At the same time, the court ruled that the apportionment theory of the case was dead, TCC having failed to adduce evidence on which a jury could find in its favor. Therefore, from that point on, the trial of the conversion count rested entirely on the contract theory. Through this point, TCC played no role in introducing the contract theory at all. Nonetheless, in redirect examination of Cecil, Doonan briefly elicited further testimony in support of the theory. And, near the conclusion of the trial and before the matter went to the jury, TCC submitted proposed jury instructions on the contract and promissory estoppel theories.
70.The court instructed the jury only on the contract theory and denied TCC’s request for an instruction on promissory estoppel. The Court also instructed the jury that, for lack of evidence as to apportionment, TCC could not prevail on the apportionment theory: “there is no basis for which it could be judged that the division of the fee, one-third to the former partners and two-thirds to Mr. Schlicht-mann, was not an appropriate division in consideration of their respective contributions.” The jury was essentially instructed that they were to decide the conversion count on the strength of the contract theory alone. In view of the fact that the case was being submitted to the jury on the contract theory alone, Schlichtmann had moved (just prior to submission to the jury) for a directed verdict. In support of this motion he argued that the contract that formed the basis of the theory was, in essence, a reaffirmation agreement that could not be valid because there was no evidence that the requirements of 11 U.S.C. § 524 (c) had been met as to the contract. The court denied the motion, stating without elaboration, “it remains my conclusion that there is a version of the evidence that would permit the jury to find a valid post-discharge undertaking supported by adequate consideration that could have shifted the property interest in the second-phase Groton fee entirely to the former partners and therefore made it subject in its entirety to the security interest held by the plaintiff.”
71. TCC also demanded a jury instruction on the tort of fraud; the court denied the request.
72. On December 16, 1999, the jury returned a unanimous verdict for Schlicht-mann on the conversion count.
73. On January 6, 2000, the court held a pretrial conference regarding Schlicht-mann’s counterclaim. The pretrial conference was notable for three developments. First, the court took notice that Cecil Ca-dle had died. The precise date was not specified, but presumably sometime after return of the verdict. (Cecil had testified in the action on December 15, 1999.) Second, Doonan indicated (a) that “there are certain memos that are covered by the attorney-client privilege that Mr. Cadle had sent to me concerning the ... letter that I sent to the U.S. Trustee’s office,” (b) that there was a strong likelihood that Doonan would be a witness in the counterclaim phase of the trial, and (c) that TCC would likely be retaining new counsel to try that next phase. Third, the court announced its view that redress for violation of a bankruptcy discharge, which was the subject of the first of Schlichtmann’s two counts in counterclaim, could be had only in contempt proceedings in the bankruptcy court (unless the reference of the bankruptcy case to the bankruptcy court were withdrawn). The court further indicated
*70
that this would necessitate an amendment of the counterclaim and, if the matter were to be tried in the District Court, possibly a motion for withdrawal of the reference as to Schlichtmann’s bankruptcy case. In response, Schlichtmann did initially file a motion to amend his counterclaim, but later he moved to dismiss the counterclaim without prejudice,
28
and the court allowed his motion.
74. Accordingly, on February 22, 2000, the court entered judgment for Schlicht-mann on the conversion count and dismissed the counterclaims “without prejudice through stipulation of the parties.”
75. By new counsel, Scott L. Machanic, TCC timely filed a notice of appeal. On appeal, TCC made two arguments. First, TCC argued that the trial court had erred in failing to address the jury, as requested, on the elements of promissory estoppel, where the evidence permitted a finding that the plaintiff had withheld collection efforts in reliance on repeated promises by Schlichtmann that TCC would be satisfied from the Groton proceeds. Second, TCC argued that the trial court had erred when, on cross-motions for summary judgment, it had ruled that TCC’s security interest did not extend as a matter of law to the entire Groton fee.
76. On July 19, 2001, the Court of Appeals, on the strength of the latter argu-” ment alone and without reaching the former, reversed the judgment below and remanded for further proceedings. Schlichtmann petitioned the Court of Appeals for panel rehearing or hearing
en banc.
On October 4, 2001, the Court of Appeals vacated its original judgment, withdrew its original opinion, and issued a substitute opinion (published at 267 F.3d 14 ) and a new judgment (to the same effect as the original) but denied the petition for rehearing or hearing
en banc.
Schlichtmann then petitioned the Court of Appeals again for panel rehearing or hearing
en banc,
and this petition too was denied. He then filed a petition in the Supreme Court for writ of certiorari, and that petition was denied.
Schlichtmann v. Cadle Co.,
535 U.S. 1018 , 122 S.Ct. 1607 , 152 L.Ed.2d 622 (U.S. Apr. 22, 2002). All references in the present memorandum of decision to the opinion of the Court of Appeals are to the opinion issued on October 4, 2001.
77.The Court of Appeals held that TCC held a security interest in the entire Groton fee:
[T]hat the post-dissolution work on the Groton matter was performed by Schlichtmann does not alter Cadle’s rights as a secured creditor. Partners cannot eliminate a security interest in the partnership’s anticipated fees by transferring (without the creditor’s written consent) the client files, whether by dissolution of the partnership or otherwise.
Cadle Co. v. Schlichtmann,
267 F.3d at 18 . The court further held that Schlichtmann was nonetheless not liable in conversion for the $100,000 he distributed to his former partners because TCC had not given notice of its claim to Schlichtmann before he made this distribution,
29
and that Schlichtmann was liable in conversion for the amount he retained and the amount he paid to Kiley before having received notice of TCC’s claim. Because it was not clear
*71
whether, or to what extent, the payment to Kiley was made after Schlichtmann received notice of TCC’s claim, the matter was remanded to the District Court to make that determination and to enter judgment for TCC in the appropriate amount. The court did not address the promissory estoppel issue.
i.
2002: Proceedings in Bankruptcy Court
78. Before proceedings upon remand could resume in the District Court, Schlichtmann, on February 11, 2002, filed a motion in his bankruptcy case in which asked the Bankruptcy Court to (1) order TCC to show cause why it should not be held in civil and criminal contempt of the his discharge order; (2) after a hearing, award him compensatory damages, attorney’s fees and costs, and punitive damages for TCC’s violations of the discharge; (3) enjoin TCC
from
further prosecuting the District Court action against him; (4) enjoin TCC from asserting any lien or interest in any fees he received in the Groton matter; (5) enjoin TCC from taking any other action in violation of the discharge; and (6) reopen the bankruptcy case in order to adjudicate these matters.
79. TCC, appearing by Scott Machanic, filed an opposition to the motion. Schlichtmann contends that, in this opposition, TCC, through attorney Machanic,
made repeated references to the fact that Cadle was the “secured party”; “holds a security interest in the firm’s accounts receivable”; “the attorney fee that was being pursued by The Cadle Company
was the property of the Cadle Company”;
and that Schlichtmann had “converted
The Ca-dle Company’s
asset.”
30
The clear meaning of this pleading, Schlichtmann contended, “was that the security interest at issue was
Cadle’s
property and that Cadle was collecting on its own behalf and not on behalf of another entity.”
31
Schlichtmann further contends that these representations were false and that their assertion by TCC constituted a fraud on the court. I find as follows,
a. Though the opposition does not contain three of the four statements that Schlichtmann alleges,
32
it nonetheless states directly: “The Cadle Company
*72
was pursuing its security interest”; and “the fee was ... collateral in which The Cadle Company had a security interest.” As Schlichtmann contends, TCC was indeed representing, by these statements in the opposition, that the security interest at issue was TCC’s property.
b. This representation was true: TCC was the holder of the notes and attendant security interest and, as such, had a property interest in them and the right to enforce them in its own name. TCC never transferred any portion of its interest in the notes and security interest to AJV. AJV had only a right, under the Joint Venture and Servicing Agreements, against TCC to turnover of proceeds from liquidation of the notes. Although the parties have loosely referred to this right as an “interest,” it is not a property interest because it does not follow or attach to the notes. Rather, it is contractual in nature and enforceable only against TCC. Therefore, the notes and security interest were TCC’s and TCC’s alone. But even if AJV’s “interest” in the notes were deemed a property interest, the interest would not be such a one as negated the interest held by TCC. It would remain true that the security interest was TCC’s.
c. TCC did not also state in the opposition, either expressly or by implication, “that Cadle was collecting on its own behalf and not on behalf of another entity.” The opposition is simply silent on that issue. The issue of whether another entity had any interest in or connection to the SCC
&
H notes was nonexistent at the time; it was not an issue that Machanic and TCC believed themselves to be addressing in the opposition.
d. Nor has Schlichtmann demonstrated that either Machanic or TCC omitted mention of AJV’s “interest” in the SCC
&
H notes deliberately, much less with intent to deceive. Machanic himself had no knowledge of AJV’s interest at the time. Schlichtmann suggests that TCC may nonetheless have deliberately kept Machanic in the dark on the issue, so that he would unwittingly conceal AJV’s interest. There is no evidence to support this. Schlichtmann has adduced no evidence as to what TCC had by then communicated to Machanic by way of instruction or background information.
80. The court held a hearing on the 2-11-02 motion on July 16, 2002. On July 24, 2002, the court (Kenner, J.) denied the motion. With respect to the requests for injunctive relief, which boiled down to a request to enjoin TCC’s continued prosecution of the District Court action, the court denied the motion with prejudice. The court expressly held that it was bound by the decision of the Court of Appeals on the extent of TCC’s security interest, and therefore that Schlichtmann’s discharge did not enjoin TCC from prosecuting its conversion count for redress of Schlicht-mann’s postpetition actions in derogation of TCC’s security interest. With respect to Schlichtmann’s demands for compensatory and punitive sanctions against Cadle for past violations of the discharge, and his request to reopen the bankruptcy case to adjudicate that demand, the court denied the motion without prejudice to its renewal upon conclusion of the District Court action, including any further appeals.
81. At the July 16, 2002 hearing in the Bankruptcy Court on the above motion, Schlichtmann told the court that a court in Tarrant County, Texas, had turned over to a sheriff all of TCC’s claims against Schlichtmann, for sale by the sheriff at public auction, the proceeds to be applied in satisfaction of an outstanding Texas judgment against TCC. Judge Kenner asked Schlichtmann, “Are you saying Ca-dle Company no longer holds the debt?”
*73
Schlichtmann responded that there was a cloud on TCC’s title, the cloud being a Texas “turnover order,” the substance and import of which were unclear. Judge Ken-ner then addressed counsel for TCC, Mr. Machanic, in the following colloquy:
THE COURT: Does Cadle hold the debt today?
MR. MACHANIC: No. Actual — well, we have a security interest in a fee. The case has been remanded to the District Court for a determination as to how much of that fee remained in Attorney Schlichtmann’s hands as of the date we made our first demand on him for payment.
THE COURT: Have — Let me ask the question a different way then. Have you sold your interest to anyone as of July 16, 2002?
MR. MACHANIC: Not to my knowledge.
THE COURT: Have you inquired or your client?
MR. MACHANIC: No, I haven’t. This is the first time I’ve heard personally of this.
THE COURT: Let’s take a recess, and you can discuss it with your client, but what I understand Mr. Schlichtmann to be saying is. that you no longer have standing.... We’ll take a five-minute recess and you can discuss the issue of whether your client still holds the debt.
At this point, the court took a short recess. The colloquy then continued:
THE COURT: Were you able to discuss this with your client?
MR. MACHANIC: Yes, I was, your Honor.
THE COURT: Okay. Let me ask the question. The question is: does Ca-dle Company still hold the debt?
MR. MACHANIC: I don’t know how to answer that question directly. They are under order to turn over the debt that’s deemed to be the property of the sheriff under a temporary restraining order. July 10 a hearing to set aside the temporary restraining order began, but it hasn’t yet been finished.
THE COURT: Oh. Before whom?
MR. MACHANIC: Before the judge in Tarrant County, Texas.
THE COURT: I’m a little confused. I understood the debtor to say that you sold the debt.
MR. MACHANIC: No, we did not sell the debt.
THE COURT: You did not sell it.
MR. MACHANIC: Correct.
Whereupon the hearing went on to other subjects.
82. On August 13, 2002, Schlichtmann filed another motion in the Bankruptcy Court, this time demanding an order to show cause why TCC should not be held in contempt and subject to sanctions for giving information that was not true in response to the foregoing inquiry as to the status of the debt and the standing of TCC. In the motion, Schlichtmann alleged that Daniel Cadle, in a letter he had sent to a Mr. David Evans in relation to a Texas sheriffs sale (about which more below), had stated: TCC does not own the debt in issue in this case; rather, TCC is the servicing agent for the account, and the account is owned by Atlanta Joint Venture.
83. In response to this motion, the Bankruptcy Court did not issue an order to show cause or otherwise require TCC or Machanic to respond. Rather, on September 30, 2002, Judge Kenner denied the motion and, in a memorandum of decision, set forth two reasons for the denial. First,
*74
the court explained, the motion was predicated on a misunderstanding of the subject of the court’s inquiry: the focus had been on Schlichtmann’s allegation that the action in Texas had somehow resulted in a transfer of TCC’s rights against Schlicht-mann. “My inquiry did not concern Ca-dle’s underlying interest in the rights against Schlichtmann; I was simply asking whether that interest, whatever it was, had somehow been lost or sold by virtue of the Texas action.” Second,
even if my question were construed as inquiring into whether Cadle’s underlying interest was sufficient to give it standing to enforce the cause of action against the Debtor, Cadle’s answer would not be false. Cadle’s counsel told me that it owned, and had not sold, the rights on which its cause of action against the Debtor was predicated. If Cadle owned those rights as a servicer for another entity, Cadle still (1) had title to the rights and (2) standing to enforce them against the Debtor. By definition, a “servicer” is one who holds title for another and legal authority to administer the asset in question for the other.
Schlichtmann took no appeal from the order of denial.
84. As her memorandum of decision indicates, Judge Kenner herself understood her questions to Machanic as relating to any changes in standing or ownership that may have resulted from the Texas sheriffs sale, not to TCC’s underlying interest in the rights against Schlicht-mann. From the context in which her questions were posed, an attorney in Ma-chanic’s position would have understood her questions accordingly, as pertaining solely to whether any change had been effected by the action in Texas; no question or issue had been raised at that hearing as to TCC’s underlying interest in the rights against Schlichtmann — that issue was on no one’s radar at the time. On the basis of Machanic’s testimony in this matter and of pleadings he filed in the District Court action in the months after these events, I find that he understood Judge Kenner’s questions as she had intended — as asking whether any change had been effected by the action in Texas — that he was correct' in so understanding them, and that he answered the questions truthfully and without intent to deceive or conceal.
j.
2002: The Texas Sheriff’s Sale
85.
By July of 2002, Schlichtmann had made contact and common cause with other account debtors of TCC and their attorneys who were litigating against TCC in other proceedings elsewhere in the nation. One of these was a civil action in a Texas state court, the District Court of Tarrant County, known as
The Cadle Company v. Bankston & Lobingier et al.
(“the
Lobingier
action”). It is important here because, in the summer of 2002, David Lobingier and the State of Texas filed motions therein for turnover of certain assets of TCC to a sheriff for sale and application of the proceeds thereof in partial satisfaction of judgments held by the State of Texas and by David Lobingier against TCC. On August 23, 2002, the court allowed that motion. The turnover order stated that
the following property is hereby deemed turned over to the Sheriff or Constable of Tarrant County, Texas for execution as ordered herein: ...
2.
Schlichtmann Claims:
a. All rights, claims, and/or causes of action belonging to The Cadle Company, whether know or unknown, whether contingent or fixed, whether accrued or unac-crued, whether arising in contract or in tort, whether for actual or
*75
punitive damages against any individual or entity, which has been or could have been asserted or could have been described in the lawsuit including any appeal asserted, arising in any manner or in any time against Jan R. Schlichtmann, including but not limited to those asserted in a Civil Action No. 95-11409-GOT; styled
The Cadle Company v. Schlichtmann, Conway, Crowley & Hugo [et al.],
in the United States District Court, District of Massachusetts.
IT IS FURTHER ORDERED that the Sheriff or Constable of Tarrant County, Texas shall be deemed to be in possession of the claims and property to be delivered to him as of the date of the signing of this order and shall levy on such property as under a writ of execution and after giving notice of sale, sell the property at public auction to the highest bidder for cash, applying the proceeds of the sale to the payment of expenses of sale and court costs, with the balance paid over to David Lobingier and the State of Texas for credit on the judgments described herein.
On September 20, 2002, the court entered an amended turnover order to the same effect. On October 15, 2002 and pursuant to these orders, the Tarrant County sheriff did sell the “Schlichtmann Claims” at auction for $52,000 to Jan Schlichtmann.
k.
2002-2003: Proceedings Upon Remand
86.TCC’s conversion action was remanded from the Court of Appeals to the District Court in January 2002. TCC moved for a status conference in April, but the action remained dormant until August 2002. On August 7, 2002, Schlichtmann filed a flurry of motions in the District Court, including a motion for summary judgment on the conversion count or, in the alternative, an evidentiary hearing or jury trial.
87. The next day, however, Schlicht-mann received, by facsimile transmission from David Evans, a Texas attorney who represented the David Lobingier in the Lobingier action, a letter that Daniel Cadle had faxed to Evans on August 7, 2002, marked prominently, “FOR SETTLEMENT PURPOSES ONLY.” Daniel’s letter concerned the then-pending turnover motions in the Lobingier action and the two assets as to which turnover was being sought, including TCC’s rights against Schlichtmann. In the letter, Daniel stated, in relevant part:
It is also important to note that the Cadle Company is the servicing agent for both of the loans, and it has a monetary interest in the collection proceeds after attorney fees, costs, etc.... The proceeds of the Schlicht-mann case is owned by Atlanta Joint Venture and has been in the collection process since 1992.
It was on August 8, 2002, upon reading this letter, that Schlichtmann learned for the first time that TCC was a servicing agent for the SCC
&
H notes, including the conversion action against him, and that an entity other than TCC was entitled to the proceeds of the notes and the conversion action.
88. With this new information, Schlichtmann filed three motions. The first has already been discussed: his motion of August 13, 2002 in the Bankruptcy Court for an order to show cause why TCC should not be held in contempt for giving false information in response to the bankruptcy judge’s inquiry as to the status of the debt and the standing of TCC. The second, also filed August 13, 2002 but in the District Court, was an amendment to
*76
his Motion For Summary Judgment Pursuant to Remand Order; by this amendment, Schlichtmann sought dismissal of the conversion count on the basis that TCC did not own the debt at issue.
33
The third motion, filed in the District Court on August 29, 2002, was entitled Motion for Evidentiary Hearing Concerning Plaintiffs Fraud Upon the Court.
34
By this last motion, Schlichtmann demanded that (1) the court order an evidentiary hearing on the alleged fraud on the court, (2) that the court order Daniel Cadle to appear personally to answer questions concerning who the true owner of the collateral is, and (3) “for such relief as may be appropriate, including a default and sanctions against Cadle [TCC].” The basis of this motion was TCC’s alleged engagement in “a pattern and practice of fraud and deceit upon this Court, the Bankruptcy Court, and the First Circuit Court of Appeals” concerning concealment of Atlanta Joint Venture’s interest in TCC’s conversion claim against him. The “fraud and deceit upon ... the Bankruptcy Court” for which this motion sought relief was the same conduct that formed the basis of Schliehtmann’s motion of August 13, 2002 in the Bankruptcy Court for an order to show cause.
89. On September 9, 2002, the District Court held a status conference at which Schliehtmann’s counsel reported that TCC’s rights against Schlichtmann in the District Court action would soon be auctioned by a sheriff in Texas, and that “the litigation” might be bought by “Mr. Cadle ... or Mr. Schlichtmann ... or some third party.” Schliehtmann’s counsel also - reported that a new issue had arisen since remand, the issue over whether TCC owned or held the notes that formed the basis of its conversion claim, and that Schlichtmann had moved for an evidentia-ry hearing regarding fraud on the court. The Court indicated that it would do nothing on the pending motions until after the sheriffs sale in Texas.
90. At the September 9 status conference, the Court asked the parties whether, in view of the new issues concerning ownership of the rights against Schlichtmann, AJV was a necessary party. TCC’s attorney Scott Machanic responded that AJV was not a necessary party and, in explanation, said: “as I understand it, there is no evidence in existence of anything in writing between The Cadle Company and Atlanta Joint Venture.” Citing the existence of the several writings then in existence between TCC and AJV — to wit, AJV’s Joint Venture Agreement, TCC’s Loan-Servicing Agreement with AJV, and various writings concerning the 1994, 1996, and 1997 Mahoning National Bank loans— Schlichtmann now contends that this was a fraudulent misrepresentation by Machanic and TCC to the court. The issue is of relevance in this proceeding only as it bears on the credibility of Machanic and TCC.
I find that the statement was not knowingly false and not an attempt by Machanic or TCC to deceive the District Court. When the statement in question is read in context, it is clear that Machanic was talking not about writings in general, but about writings that might have effected a transfer of TCC’s rights against Schlicht-mann to AJV. Schliehtmann’s counsel had just said: “The Cadle Company did in fact
*77
buy this debt from the FDIC in 1992. There is no dispute about that. But the problem is that before the lawsuit, they [meaning TCC]
in some way transferred or signed or hypothecated to the Atlanta Joint
Venture” (emphasis added). In was in response to that statement that Ma-chanic made the statement in question. His full statement was as follows:
First of all, there is no evidence and can’t be any evidence because, as I understand it, there is no evidence in existence of anything in writing between The Cadle Company and Atlanta Joint Venture. Atlanta Joint Venture is essentially a partner, limited partnership that was set up by the Cadle Company. The — with The Ca-dle Company as the general partner. So even if Atlanta Joint Venture was a real party in interest, they would be represented by Cadle Company as the general partner. But the note and security interests were bought by The Cadle Company. They were assigned to the Cadle Company by the FDIC. And there has never been any writing that has ever transferred that ownership interest in the notes and the security interests to anyone else.
The context makes clear that Machanic was talking about a writing that might have effected a transfer of TCC’s rights against Sehlichtmann to AJV. None of the documents that Sehlichtmann cites would fit that description. There was therefore no falsehood and no misrepresentation. Moreover, Machanic testified that he was unaware at the time of the existence of the written servicing agreement and of the documents relating to the Mahoning loans; and there is no evidence to the contrary. He also made clear that he would have deemed the Mahoning loan documents irrelevant to the point he was trying to make in the District Court, and I agree that the Mahoning documents were not relevant.
35
And the other document that Sehlichtmann cites, the AJV Joint Venture Agreement, is not an agreement between TCC and AJV; TCC is a party to that agreement but AJV, though formed by the agreement, is not a party to it. For all of these reasons, I find no falsehood and no intent deceive.
91. On October 15, 2002, Sehlichtmann purchased TCC’s rights against him at the Texas sheriffs sale.
92. In response, AJV moved in the District Court to substitute AJV for TCC as the party plaintiff or to join as a party plaintiff or to permit AJV to intervene as a party plaintiff (the “Motion to Intervene”). In support of this motion, AJV submitted an affidavit of Daniel Cadle in which Daniel stated: “While The Cadle Company does hold legal title to the notes and security interests giving rise to our claim against the collateral which Defendant Sehlichtmann held, the Cadle Company was permitted to hold title so as to be the servicing agent and/or general partner on behalf of Atlanta Joint Venture”; and “The interests of the Cadle Company in this litigation are limited. One role is as servicing agent on behalf of its principal, Atlanta Joint Venture.” Sehlichtmann opposed the motion.
93. On November 14, 2002, the District Court held a hearing on the pending motions at which it addressed two matters: whether, where Sehlichtmann had purchased TCC’s rights in the action, AJV should be permitted to intervene or be
*78
substituted for TCC as party plaintiff, such that the action would simply continue with a new plaintiff substituted for the old; and whether Schlichtmann’s purchase of TCC’s rights rendered moot his motion concerning fraud on the court.
a. With respect to the motion to intervene, after hearing argument from Mr. Machanic for AJV, the court indicated that it would deny the motion to intervene. As grounds for this ruling, the court stated only (1) that the case was seven years old (“you have got a fat chance of my allowing that in a case that is, what, seven years old”) and (2) that AJV could commence a new action in its own name (“well, or you bring another lawsuit and see what happens”). The court did not mention estoppel, misrepresentation, or fraud as cause to deny intervention. Nor did the court address any issue concerning whether TCC had properly brought the District Court action in its own name.
b. With respect to Schlichtmann’s motion regarding fraud on the court, there occurred the following colloquy between the court and Schlichtmann’s attorney, Garve Ivey:
THE COURT: Mr. Schliehtmann wants to allege some fraud on the court because the real party in interest was not properly named. I may not have that right.
MR. IVEY: We have made that allegation, yes.
THE COURT: So I still say the case ought to be dismissed as moot because where is the damage to you? You have — there may be been a — when I say “you,” Mr. Schliehtmann — there may have been potential damage but ■ he preempted that by buying the thing out.
MR. IVEY: Judge, I believe as to Mr. Schliehtmann he did. My take on the fraud on the court is more that it is the damage and the injury to the court system for this oldest case on your docket—
THE COURT: Well, you know—
MR. IVEY: — more than it is to Mr. Schliehtmann.
THE COURT: If there has been that kind of fraud, somebody ought to just tell the U.S. Attorney and maybe there will be a prosecution. But I don’t know that it presents a case in controversy.
The Court then indicated that it would deny Schlichtmann’s claim for fraud on the court and instructed Schliehtmann to submit a form of order.
94. On November 25, 2002, the District Court entered a single order that (1) denied AJV’s Motion to Intervene, (2) denied as moot Schlichtmann’s Motion for Eviden-tiary Hearing Concerning Plaintiffs Fraud Upon the Court,
36
(3) denied as moot Schlichtmann’s Amendment to Motion for Summary Judgment, and (4) dismissed the action. A separate order of dismissal entered on December 9, 2002.
95. TCC and AJV filed a notice of appeal. Schliehtmann did not. On appeal, TCC and AJV argued that, while TCC had been the holder of the SCC & H notes and therefore the proper party plaintiff (until Schlichtmann’s purchase of TCC’s rights in the action), TCC had brought the action as a servicing agent for, and general partner
*79
of, AJV; that TCC had only a one percent interest in the claim against Schlichtmann, and AJV held the remaining ninety-nine percent interest; that Schlichtmann purchased, at most, only TCC’s one percent interest in the claim against Schlichtmann; that Schlichtmann could not and did not purchase TCC’s obligations as a servicing agent to AJV; that, after Schliehtmann’s purchase of TCC’s rights against him, only AJV could properly represent AJV’s interests in the action; and that AJV had timely moved to intervene.
96. In a decision issued on July 31, 2003, the Court of Appeals affirmed the decision of the District Court in all respects. See
Cadle Company v. Schlichtmann, Conway, Crowley & Hugo,
338 F.3d 19 (1st Cir.2003). It ruled that the District Court had properly denied AJV’s Motion to Intervene as untimely and had properly denied TCC permission to continue in the action as representative of the interests of AJV. The court summarized:
This is not to say that the claim against the defendants has been extinguished; if some other party has a claim then that claim is unaffected. However, Cadle has no cognizable interest in this suit because its interests in this suit, whatever they were, were sold in the sheriffs sale. Further, Cadle is estopped to assert that it was acting as an agent all along; thus, Cadle has no role to play in this litigation, and there are no other plaintiffs to continue the action.
Id.
at 22 . It is important to note also what the Court of Appeals did not find and did not rule.
a. It did not rule that the District Court action should have been brought by AJV instead of, or in addition to, TCC.
37
b. It did not rule that TCC or AJV should have disclosed AJV’s connection to the debt in the District Court complaint or in discovery in that action. At most, it ruled that,
if
Atlanta intended to assert an interest in the claims against Schlicht-mann at all, it should have done so
at the September 9, 2002 status conference
in the District Court action, because at that time the Texas sheriffs sale had been scheduled, Schlichtmann had raised an issue as to TCC’s continued standing in the matter, and the District Court had to make a decision as to whether the District Court action should be continued pending the sheriffs sale.
38
*80
c. It did not find or rule that AJV had a property interest in the debt, much less determine the nature of that interest. Precisely because TCC was estopped from asserting that AJV held an interest in the debt and that TCC had merely been servicing that interest, it became unnecessary for the Court of Appeals to determine the nature of AJV’s interest.
d. It did not find or rule that AJV had acted with fraudulent intent in failing to disclose or assert AJV’s connection to the debt at the September 9, 2002 status conference. The court stated that “Atlanta
should have known
that Cadle’s claim was being sold in Texas” and that “Atlanta
should have anticipated
the problems this sale would create,” but it made no finding or ruling that Atlanta’s failings were the result of intent to deceive or manipulate.
e. It did not find or rule that TCC had acted with fraudulent intent in failing to disclose or assert AJV’s connection to the debt at the September 9, 2002 status conference.
39
97. TCC and AJV promptly moved for rehearing, but that motion was denied on August 15, 2003, whereupon the appeal and the underlying District Court action came to a strange close.
1.
2003-2005: Other Fronts
98. So closed only one battle. Schlicht-mann almost immediately returned to the Bankruptcy Court to prosecute his claim for violation of his discharge against TCC, AJV, and Daniel Cadle. The procedural history of that matter is set forth below.
99.Schlichtmann’s efforts against the Respondents during this period were not limited to redress for alleged violation of his discharge. In additional efforts:
a. As set forth more fully below, Sehlichtmann sought to resurrect in the Bankruptcy Court claims against the same parties for fraud on the court.
b. Commencing in April 2003, and continuing for approximately two years, he created, published, and maintained an anti-TCC web site called truthaboutcadle.com. The web site was designed and intended by Sehlichtmann as a source of information about some of his efforts against TCC. It features newspaper articles about those efforts, demand letters drafted by Sehlichtmann against TCC on behalf of individuals seeking relief against TCC, letters from Massachusetts state officials to and about TCC, biographical information about Sehlichtmann as a plaintiffs attorney, and contact information. The latter includes the following:
i. “To find out more or if you believe you have been victimized by The Cadle Company, contact us directly,” followed by a telephone number;
ii. “If you want to learn more about this growing effort, contact us directly by email or by phone.”
iii. “This site was created and sponsored by Jan R. Sehlichtmann, Attorney at Law, P.C., as a service advertising this effort. Attorney Sehlichtmann has been fighting the Cadle Company for
*81
the past 10 years.... Attorney Schlichtmann now represents several other victims of Cadle’s unlawful business practices.”
Schlichtmann denies that the site was intended as professional advertising; while I do not doubt that it was not
solely
an effort on his part to drum up business, it clearly was in part an effort by Schlichtmann to connect with potential plaintiffs whom he might represent in further efforts against TCC, and the Respondents did justifiably so understand it. The site featured numerous allegations that TCC has been operating an illegal debt collection business in Massachusetts and employs fraudulent practices and intimidation.
c. Throughout this period, he made a number of statements about TCC, all tending to discredit TCC, that appeared in diverse publications, including the truthaboutcadle.com web site, the Boston Herald, and the bos-ton.com web site.
d. He began to represent account debtors of TCC in litigation between them.
e. He sought out account debtors of TCC who were in ongoing litigation with TCC and offered advice and assistance in fighting TCC.
f. He opposed efforts by TCC to register as a debt collection agency in Massachusetts.
g. He instigated investigations of TCC with the Massachusetts Secretary of State and, by referral from the Secretary of State, with the Massachusetts Division of Banking and the Massachusetts Attorney General,
h.As plaintiffs’ counsel, he commenced a class action (though it is not clear whether a class was ever certified in the action) against TCC in Massachusetts Superior Court for violation of Massachusetts debt collection laws.
100. The cumulative effects of all these actions on the Respondents included a gross increase in attorney’s fees and other costs of doing business, significant damage to their reputation, and a massive diversion of time and effort. Daniel Cadle, TCC, and AJV were aware of these activities by Schlichtmann and reasonably viewed them as threats to the business of TCC and its affiliates. The Respondents further reasonably concluded that they were intended by Schlichtmann to harass the Respondents, to harm and interfere with their business, to shut them down if possible, and to pressure them into agreeing to pay a sizable settlement to Schlicht-mann to make him go away.
40
101. TCC responded to some of Schlichtmann’s above effort by suing him for defamation and related claims,
41
first in a federal district court in Ohio and then in Massachusetts Superior Court. The suit in Ohio was filed on October 22, 2003 and dismissed for lack of personal jurisdiction. On February 7, 2005, the dismissal order was affirmed on appeal, except that, as to certain statements that were alleged to have been provided by Schlichtmann to an Ohio television statement, the dismissal was affirmed on other grounds, specifically
*82
failure to state a claim on which relief could be granted. TCC then retained Massachusetts counsel and filed another complaint in the Superior Court of the Commonwealth of Massachusetts; as of the close of the trial in the present matter, that action remained pending. The Massachusetts complaint appears to have been competently researched and pleaded and neither frivolous nor plainly unfounded; and it does not reiterate, as a basis for defamation, the statements that were deemed in the Ohio action not to state a basis on which relief for defamation could be granted. I need make no findings or rulings as to the merits of that action; it is sufficient to note that, whatever its merits, the complaint appears to be an appropriate, proportionate, and good faith response to acts by Schlichtmann that the Respondents believe to be defamatory.
102.By a letter dated August 29, 2003 but transmitted to the Court by facsimile transmission only on December 19, 2003, Daniel Cadle further responded to Schlichtmann’s efforts by asking the Bankruptcy Court to reopen Schlichtmann’s bankruptcy case to investigate allegations of bankruptcy fraud by Schlichtmann. At the time, Schlichtmann himself had moved to reopen the bankruptcy case for the limited purpose of adjudicating claims against the Respondents for violation of his discharge, and that motion remained pending. The letter was addressed to Bankruptcy Judge Carol Kenner, to whom Schlicht-mann’s bankruptcy case was then still assigned, and also to Chapter 7 Trustee Ellen Carpenter and United States Trustee Christopher Marshall. The letter asked the Court to reopen Schlichtmann’s bankruptcy case “to pursue fraud against” Schlichtmann. The letter went on to list reasons Daniel believed Schlichtmann should be investigated for having failed to list assets and liabilities and having transferred assets to keep them out of the bankruptcy estate. Noting that Daniel’s request was made by letter, not motion, and carried no certification or other indication that it was served on Schlichtmann, the Court denied the motion, stating, “[t]he Court does not act on letters but only on appropriate pleadings ... and only when such pleadings have been served on parties in interest.” The request was not renewed.
103. Daniel Cadle further responded to Schlichtmann’s efforts by making threats of litigation against Schlichtmann, his associate Scott Dullea, and his expert witness in the present matter, Lynda Borueki. On October 23, 2003, while Schlichtmann was deposing Daniel, Daniel said to Schlicht-mann, “I’m just trying to advise you in advance ... there is certain cost to your litigation.” During a break in the same deposition, he said to Scott Dullea, the paralegal assisting Schlichtmann, that Dul-lea could “end up paying” Schlichtmann’s legal bills and that “Jan can stop this.”
104. On October 24, 2003, in a telephone conference that Daniel Cadle had arranged with Schlichtmann, ostensibly to discuss settlement, Daniel told Schlicht-mann that if he did not stop his actions, retract his complaints, and tell the authorities that he was wrong, Daniel was going to hire lawyers to work full time suing Schlichtmann and people associated with him.
105. On April 12, 2005, Daniel Cadle faxed a letter to Lynda Borueki. Borueki had been retained by Schlichtmann as an expert witness in the present matter to opine on the subject of whether TCC was in the business of collecting others’ debts. The letter informed Borueki that Schlicht-mann may be using her expert testimony in ways she did not intend, including on his web site, and twisting it to say things she did not mean. In the Letter, Daniel asked
*83
whether she has been shown TCC’s evidence of its side of the issue, invited her to contact him and TCC to obtain that evidence, and asked her to review her research, affidavit, and findings and also the use to which these are being put by Schlichtmann. He added: “As you know, we have already sued Schlichtmann for slander.... We do not want Schlichtmann to draw you into that lawsuit.” By virtue of this latter language, the letter was threatening and intimidating on its face, and it was perceived as such by Borucki. On the basis of this letter and at Schlicht-mann’s request, the Court enjoined Daniel Cadle from having any direct contact with Schlichtmann’s witnesses pending a final order on the present motion.
106. Since the close of the District Court action on August 15, 2003, neither TCC nor AJV has in any overt manner attempted to enforce the discharged claims or even to recover on the dismissed claim for conversion. Schlichtmann maintains that TCC’s prosecution of the defamation action against him, Daniel’s request to reopen his case, and Daniel’s threats against him, Scott Dullea, and Lynda Borucki are further veiled attempts to enforce the discharged debt.
42
The evidence does not support this allegation. The actions of TCC and Daniel Cadle against Schlicht-mann since 2003 have been responses to Schlichtmann’s multifarious undertakings against the Respondents since 2002. They need no separate
raison d’etre;
by his actions since 2002, Schlichtmann has given the Respondents more than adequate motivation for the actions he now complains of, a new and superseding animus for their actions against him.
43
Schlichtmann contends that TCC’s defamation suits, Daniel’s request to reopen, and his various threats have been wrongful in many and varied ways. For example, he makes allegations that many were based on lies and misrepresentations, that all were intended to interfere with proper adjudication of his claims for violation of his discharge, and that the allegations in the defamation action and letter to reopen lacked merit. I need make no findings and rulings on the truth or merits of these allegations. Whether wrongful or not, they were
not
attempts to collect the discharged debt.
m.
Findings Regarding Allegations of Fraud
107. Schlichtmann alleges that the Respondents fraudulently concealed from the District Court, the Court of Appeals, and this Court that Daniel Cadle set up and used TCC as the undisclosed collection agent for AJV to collect from Schlicht-mann on the discharged debts; I make the following findings on the issue:
a. In filing and prosecuting the District Court action, neither TCC nor AJV disclosed, until August 2002, that TCC had purchased the SCC & H notes with fun

[Text truncated at 120,000 characters. The full text is on the page linked above.]

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/1924559. Public record. Not legal advice.