# In re Bradley

> United States Bankruptcy Court, S.D. Texas · July 16, 2013 · 495 B.R. 747

URL: https://www.frixlaw.com/law-library/cases/8496150

## Case

- **Full name:** In re Shontel & Sarika BRADLEY, Debtor
- **Court:** United States Bankruptcy Court, S.D. Texas
- **Decided:** July 16, 2013
- **Citations:** 495 B.R. 747; 2013 Bankr. LEXIS 2941; 2013 WL 3753559
- **Precedential status:** Published
- **Opinion:** Opinion of the court by Bohm
- **Judges:** Bohm
- **Cited by:** 23 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/8496150

## How later opinions describe it (automated extraction)

- holding that regular relationship between “appearance attorney” and consumer bankruptcy firm does not fit section 504(b) exception
- observing that "the client did not hire the appearance attorney, and, almost always, the client has little or no say as to whether the attorney they did hire will represent them at any given proceeding."

## Opinion text

MEMORANDUM OPINION ON SHOW CAUSE ORDER
[Doc. No. 157]
JEFF BOHM, Chief Judge.
I. Introduction
The Court writes this Memorandum Opinion for two reasons: (1) to reiterate • the central importance of professional and ethical conduct in the practice of law; and (2) to inform the debtors’ bar that the undersigned judge has now become sufficiently disenchanted with the use of appearance attorneys that henceforth, their use will no longer be permitted. 1
The professional handling of a debtor’s case and the correct filing of accurate schedules and other court documents are paramount to the proper practice of bankruptcy law. The case at bar involves both the debtor’s attorney, Nosa Aduwa (Adu-wa), and the firm that employs him, Macey Bankruptcy, P.C. (the Firm). Aduwa failed to personally meet with his clients, Shontel and Sarika Bradley (the Debtors), or review their Schedules and Statements of Financial Affairs (SOFA) before filing them with this Court. Additionally, Adu-wa filed these documents without obtaining either the Debtors’ signatures, or their authorization. In fact, Aduwa allowed his assistant, Aurelia Gutierrez (Gutierrez), to forge the Debtors’ signatures on these documents using an electronic signature represented as an “/s/”. In addition, Gutierrez made changes to the Schedules before forging the Debtors’ signatures, and she also counseled the Debtors to convert to Chapter 7; thus she engaged in the practice of law without a license. And, there is more. Aduwa failed to accompany the Debtors to their meeting of creditors; instead, he sent Rick Carter (Carter), an “appearance attorney,” in his stead. Adu-wa failed to adequately prepare Carter for the hearing and did not notify the Debtors of the substitution prior to the meeting.
As Aduwa’s employer, the Firm has failed in its duty to supervise him. Findings by the Court indicate that the improper practices outlined throughout this Opinion are not as rare as the Firm asserts. Such practices are directly related to the Firm’s poor supervision of its attorneys and other personnel. This Opinion discusses how Aduwa’s improper preparation and filing of the Debtors’ Schedules and SOFA, as well as the other failures by Aduwa, his staff, and the Firm, have demonstrated clear disregard for the professional, ethical, and legal obligations required by both their status as attorneys and by the legal system.
The Court now issues findings of fact and conclusions of law pursuant to Bankruptcy Rules 7052 and 9014. 2 To the ex *758 tent that any finding of fact is construed as a conclusion of law, it is adopted as such. To the extent that any conclusion of law is construed as a finding of fact, it is also adopted as such. The Court reserves the right to amend these findings and conclusions pursuant to any request made by the parties or on its own.
II. Findings of Fact
1. On September 2, 2009 (the Petition Date), the Debtors, having already engaged the Firm to represent them, filed a Chapter 13 petition. [Doc. No. 1]. James Ferguson (Ferguson), an attorney employed at the Firm, signed the petition, and thereby became the attorney-in-charge. See Local District Rule 11.1 (“On first appearance through counsel, each party shall designate an attorney-in-charge. Signing the pleading effects designation”).
2. On September 2, 2009, the Firm filed a disclosure pursuant to Bankruptcy Rule 2016 (Rule 2016 Disclosure) representing that: (a) the total fees for the Firm’s representation of the Debtors would be $3,085.00; (b) of the total fees, $1,000.00 had been paid prior to the Petition Date; and (c) the remaining $2,085.00 would be paid through the Debtors’ Chapter 13 plan. [Doc. No. 1 at 35].
3. On September 28, 2009, Ferguson filed a “Motion to Withdraw as Attorney for the Debtors,” citing his impending departure from the Firm as the reason and requesting the Court to substitute Martin Pack (Pack) as the attorney-in-charge. [Doc. No. 17]. The Court issued an “Order Authorizing Withdrawal of Counsel” on October 5, 2009. [Doc. No. 21], Thereafter, Pack became the attorney-in-charge subject to Local District Rule 11.1.
4. On October 28, 2009, the Firm filed its “Bankruptcy Rule 2016(b) Disclosure and Application for Approval of Fixed Fee Agreement.” [Doc. No. 31].
5. On November 16, 2009, this Court confirmed the Debtors’ original Chapter 13 Plan (the Plan). [Doc. No. 39].
6. On November 25, 2009, this Court entered an order denying the fee arrangement between the Firm and the Debtors. [Doc. No. 43]. The Court issued this order because the Firm did not comply with the
‘ form adopted on May 20, 2009, by the Southern District of Texas. Further, the application for approval of fixed fee agreement was not timely filed pursuant to Local Bankruptcy Rule 2016 — 1(d)(1). [Id.].
7. On December 4, 2009, in response to this Court’s order of November 25, 2009, the Firm filed a third Rule 2016 Disclosure. [Doc. No. 45]. This disclosure once again listed the total compensation as $3,085.00, with $1,000.00 already paid to the Firm by the Debtors.
8. On January 14, 2010, this Court entered an order approving the fee arrangement between the Firm and the Debtors. [Doc. No. 48]. The fee arrangement provided that Pack agreed to represent the Debtors in their Chapter 13 ease, to include: advising them as necessary, preparing and filing all required documents, motions, or responses, and attending the meeting of creditors. [Doc. No. 45 at 1]. The arrangement with Pack did not include representation relating to any adversary proceedings, contested matters considered extraordinary in the context of a Chapter 13 case, or any hearings scheduled more than 120 days after the confirmation of the Plan. [Id.]. The agreement *759 also stated that Pack had not shared or agreed to share any of his compensation (i.e., the $3,085.00 with $1,000.00 already paid). [Id. at 2],
9. On March 3, 2010, Pack filed a motion to substitute attorney for the Debtors on the grounds that he was leaving the Firm. [Doc. No. 50]. The Court denied the motion because, among other reasons, the Debtors’ signatures did not appear on the motion. [Doc. No. 51],
10. On April 2, 2010, Pack filed a second motion to substitute counsel, and this time, the Debtors’ signatures were on the motion. [Doc. No. 53].
11. On May 10, 2010, this Court approved the second motion to substitute counsel. [Doc. No. 54], Terena S. Molo (Molo), an associate attorney at the Firm, replaced Pack as the attorney-in-charge. [Id.].
12. On January 25, 2011, Tiffany Pratt (Pratt), who was also an associate attorney at the Firm, filed a “Debtors’ Motion to Terminate Attorney.” [Doc. No. 73], The motion requested that Molo be removed from the case because she was no longer employed at the Firm, and that Pratt be substituted in as the attorney-in-charge. [Id. at 1-2], The Debtors signed this motion. [Id. at 2].
13. On March 15, 2011, the Firm filed an amended Rule 2016 Disclosure representing that, contrary to prior representations made to this Court, the Firm had actually received $1,150.00 from the Debtors prior to the Petition Date — as opposed to the $1,000.00 set forth in the earlier Rule 2016 Disclosures; and that, therefore, the balance owed by the Debtors to the Firm (which was being paid in monthly installments pursuant to the Plan) was not $2,085.00, but rather $1,935.00. [Doc. No. 77].
14. On March 15, 2011, Pratt, on behalf of the Debtors, filed a motion to modify the Plan because the Debtors had fallen behind on their payments due under the Plan. [Doc. No. 74].
15. On April 26, 2011, Pratt, once again on behalf of the Debtors, filed an amendment to the motion to modify the Plan. [Doc. No. 85].
16. On May 9, 2011, this Court approved the amended proposed modification of the Plan (the Modified Plan). [Doc. No. 89]. Thus, as of May 9, the Debtors were required to make payments pursuant to the Modified Plan.
17. On July 8, 2011, Pratt filed a motion to withdraw as attorney for the Debtors. [Doc. No. 95]. In this motion, Pratt represented that the Firm had terminated her employment on that day and that Adu-wa would take over as the attorney-in-charge of the Debtors’ case. [Id. at 1-2], Indeed, on that same day, Aduwa filed two notices of appearance in this case, representing that he was taking over as the attorney-in-charge of the Debtors’ case. [Doc. No. 93]; [Doc. No. 94].
18. On July 12, 2011, this Court entered an order approving Pratt’s motion to withdraw as attorney-in-charge and substituting Aduwa in her place. [Doc. No. 97].
19. Aduwa has been the managing attorney in charge of the Firm’s Houston office since 2010, [Tape Recording, Apr. 26, 2013 Hearing at 10:17:40-10:17:46 a.m.]; however, he is not a partner at the Firm, [Id. at 10:18:52-10:19:32 a.m.]. Adu-wa is an experienced bankruptcy attorney, having handled over 600 bankruptcy cases before joining the Firm. [Id. at 10:34:31-10:35:05 a.m.].
20. Aduwa has never been subject to sanctions prior to this case. [Id. at 10:35:15-10:35:30 a.m.].
21. Aduwa currently has one legal assistant, Gutierrez. She has worked in the bankruptcy field since 2007. [Id. at *760 10:50:41-10:51:30 a.m.]. Gutierrez has been with the Firm, and acting as Aduwa’s assistant, since November 2010. lid.]. Currently, the Firm’s Houston office is staffed by Aduwa, Gutierrez, and one part time clerk. [Id. at 10:17:38-10:18:02 a.m.].
22. On October 4, 2012, the Chapter 13 Trustee filed a motion to dismiss the Debtors’ case on the grounds that the Debtors were 2.22 months behind on their payments under the Modified Plan. [Doc. No. 106].
23. On October 15, 2012, Aduwa, after communicating by telephone with both of the Debtors, filed a response to the Chapter 13 Trustee’s motion to dismiss. [Doc. No. 108]. This response set forth that the Debtors intended to make their payments current, and requested that this Court deny the Chapter 13 Trustee’s motion to dismiss. [Id.].
24. A hearing on the Trustee’s motion to dismiss took place on December 3, 2012. [Doc. No. 109]. At the conclusion of the hearing, the Court entered an order setting December 17, 2012, as the deadline for the Debtors to cure their defaults under the Modified Plan, request an amendment to the Modified Plan, or request a conversion of their Chapter 13 case to a Chapter 7 case. [Doc. No. 109]; [Doc. No. Ill],
25. On December 17, 2012, the following pleading was electronically filed from the Firm’s Houston office: “Notice of Voluntary Conversion from Chapter 13 to Chapter 7” (the Notice of Conversion). [Doc. No. 117]. Aduwa, who was on vacation at this time, had telephonieally instructed Gutierrez to prepare and file the Notice of Conversion, which she did using Aduwa’s CM/ECF log-in. [Doc. No. 170 at 4-5, ¶ 12], A review of this document, however, reflects that it was represented to be electronically signed (with an 7s/”) not by Aduwa, but by Pack, [Finding of Fact No. 11] — even though Pack had resigned from the Firm in 2010. Moreover, the Notice of Conversion contains each of the Debtors’ electronic signatures (“/s/”), thereby representing to this Court that both of the Debtors had in fact physically signed the original Notice of Conversion in ink and that the Firm had possession of this document. 3 In fact:
a. Neither of the Debtors ever signed the Notice of Conversion, [Doc. No. 140 at 3, ¶ 17]; [Doc. No. 170 at 4-5, ¶ 12];
b. Pack never signed the Notice of Conversion, [Doc. No. 140 at 3, ¶ 14]; [Doc. No. 170 at 4-5, ¶ 12];
c. Aduwa never reviewed the Notice of Conversion before Gutierrez filed it, [Doc. No. 140 at 2-3, ¶¶ 12-17]; [Doc. No. 166 at 4-5, ¶¶ 11, 12]; [Doc. No. 170 at 4-5, ¶¶ 11,12];
d. Prior to the filing of the Notice of Conversion, Aduwa did not personally meet with either of the Debtors to review the meaning or effect of the Notice of Conversion, [Doc. No. *761 170 at 3-5, ¶¶ 7-12]; [Tape Recording, Apr. 26, 2013 Hearing at 11:59:13-11:59:29 a.m.];
e. Neither of the Debtors came into the Firm’s office on December 17, 2012, to meet with Gutierrez, [Doc. No. 170 at 4-5, ¶ 12]; and
f. Contrary to Aduwa’s representation in the Motion Response that he filed on February 19, 2013, [Doc. No. 140 at 3, ¶¶ 15, 17], Sarika Bradley (Ms. Bradley) did not give Gutierrez any information on December 17, 2012, that allowed Gutierrez to prepare and file the Notice of Conversion, or any other document, [Doc. No. 170 at 4-5, ¶ 12],
26. Ms. Bradley went to Aduwa’s office on December 18, 2012, and paid $550.00 for the conversion of the case from Chapter 13 to Chapter 7. 4 [Tape Recording, Apr. 26, 2013 Hearing at 12:01:10-12:02:15 p.m.]; see also [Doc. No. 132-2 at 2]. Of the total payment made to the Firm, $26.00 went towards paying the filing fees for converting the case to a Chapter 7. The Firm kept the remaining $524.00 as attorneys’ fees. [Tape Recording, Apr. 26, 2013 Hearing at 12:22:46-12:23:14 p.m.].
27. At some point in December 2012, Gutierrez informed Ms. Bradley that her husband and she would need to provide the Firm with updated information so that the conversion Schedules (the Initial Conversion Schedules) and the conversion SOFA (the Initial Conversion SOFA) could be filed. 5 [Doc. No. 170 at 4-5, ¶ 12],
28. The deadline for filing the Initial Conversion Schedules and the Initial Conversion SOFA was January 2, 2013.
29. Both parties agree that the Debtors did not provide the information to Gutierrez until after the January 2, 2013 deadline for filing the Initial Conversion Schedules and the Initial Conversion SOFA. Gutierrez claims Ms. Bradley sent her the information on either January 3, or January 4, 2013. [Id. at 5, ¶ 13]. Ms. Bradley claims she gave Gutierrez the information on January 6, 2013. [Tape Recording, Apr. 26, 2013 Hearing at 12:03:12-12:04:05 p.m.]. 6
30. Gutierrez prepared the Initial Conversion Schedules and the Initial Conversion SOFA before Ms. Bradley gave her the Debtors’ updated financial information. She prepared the Initial Conversion Schedules and the Initial Conversion SOFA using information taken from the original Chapter 13 Schedules and the original Chapter 13 Statement of Financial Affairs filed in 2009. [Doc. No. 166 at 5, ¶ 13].
31. Aduwa instructed Gutierrez to file the Initial Conversion Schedules and the Initial Conversion SOFA on January 4, 2013, which she did using Aduwa’s CM/ *762 ECF log-in. [Id. at 5, ¶ 13; 9, ¶ 22]; [Doc. No. 121]; [Doc. No. 122]. The Initial Conversion Schedules and the Initial Conversion SOFA represent, by use of an 7s/” as an electronic signature, that Aduwa and both Debtors had physically signed the documents. [Doc. No. 121 at 17, 25].
32. Aduwa instructed Gutierrez to file the Initial Conversion Schedules and the Initial Conversion SOFA even though:
a. Neither Aduwa nor Gutierrez had met with the Debtors to review the Initial Conversion Schedules and the Initial Conversion SOFA for accuracy. [Doc. No. 170 at 6, ¶ 14; 9, ¶¶ 22, 23];
b. Neither Aduwa nor Gutierrez had the Debtors physically sign (i.e., “wet” sign) the Initial Conversion Schedules or the Initial Conversion SOFA. [Id.];
c. Aduwa knew that Mr. Bradley’s employment and income information were not updated on either Schedule I of the Initial Conversion Schedules or question No. 1 on the Initial Conversion SOFA, and therefore Aduwa knew that they were inaccurate. [Id. at 5-6, ¶ 13];
d. Neither of the Debtors had authorized Aduwa or Gutierrez to file the Initial Conversion Schedules or the Initial Conversion SOFA. [Id. at 6, ¶ 14].
33. On January 6, 2013, Ms. Bradley provided Gutierrez with the updated employment and income information for Mr. Bradley. [Id. at 5-6, ¶ 13]; [Tape Recording, Mar. 7, 2013 Hearing at 10:53:40— 10:54:55 a.m.]. Gutierrez then prepared and filed amended conversion Schedules (the Amended Conversion Schedules) and an amended conversion SOFA (the Amended Conversion SOFA), at Aduwa’s direction, to correct the inaccurate information contained in the Initial Conversion Schedules and the Initial Conversion SOFA that she had filed on January 4, 2013. [Doc. No. 170 at 5-6, ¶ 13], However, the resulting Amended Conversion Schedules were still incorrect, as Ms. Bradley pointed out at the meeting of creditors on January 8, 2013. [Tape Recording, Jan. 8, 2013 Meeting of Creditors at 02:24-03:05].
34. On January 7, 2013, Aduwa directed Gutierrez to file the Amended Conversion Schedules and the Amended Conversion SOFA, and she did so. [Doc. No. 170 at 6, ¶ 14]. The Amended Conversion Schedules and the Amended Conversion SOFA represent by the use of an 7s/” as an electronic signature that Aduwa and both of the Debtors had physically signed the documents. [Id.].
35. Gutierrez filed these documents, under Aduwa’s supervision, even though:
a. Neither Aduwa nor Gutierrez had met with the Debtors to review the Amended Conversion Schedules and the Amended Conversion SOFA for accuracy, [Id.];
b. Neither Aduwa nor Gutierrez had the Debtors physically sign (i.e., “wet” sign) the Amended Conversion Schedules or the Amended Conversion SOFA, [Id.])
c. Neither of the Debtors had authorized Aduwa or Gutierrez to file the Amended Conversion Schedules or the Amended Conversion SOFA, [Id.].
36. The Amended Conversion Schedules, which Gutierrez prepared and filed, still contained incorrect information regarding Mr. Bradley’s employment and income. [Tape Recording, Jan. 8, 2013 Meeting of Creditors at 02:24-03:05]. Stated differently, Gutierrez, despite knowing that the Initial Conversion Schedules she had filed on January 4, 2013, contained inaccurate information, still failed to correct the inaccuracies in the Amended Conversion Schedules that she *763 filed on January 7, 2013. For his part, Aduwa never reviewed the Amended Conversion Schedules and, therefore, failed to discover that the information Gutierrez put in the documents was inaccurate. [Doc. No. 170 at 6, ¶ 14].
37. In addition to filing the inaccurate, unauthorized, and forged Initial Conversion Schedules, Initial Conversion SOFA, Amended Conversion Schedules, and Amended Conversion SOFA, Gutierrez also filed another document containing a material inaccuracy. On January 4, 2013, she filed the Firm’s Rule 2016 Disclosure regarding the fee that the Debtors had paid the Firm for agreeing to represent them in their converted Chapter 7. [Id. at 5-6, ¶ 13]. This disclosure, which represents that Aduwa signed it on page 31, indicates to the Court that the amount of compensation received by the Firm for converting the case was $26.00. [Id.]; [Doc. No. 121 at 31]. In fact, the amount of compensation paid by the Debtors to the Firm for the Chapter 7 representation was $524.00. [Doc. No. 170 at 5-6, ¶ 13],
38. The meeting of creditors in the converted Chapter 7 case was scheduled for 11:00 a.m. on January 8, 2013. [Doc. No. 118]. With respect to this meeting of creditors, the following events took place:
a. Aduwa did not personally meet with the Debtors to prepare them for the sworn testimony that they would have to give at the meeting, [Doc. No. 170 at 6, ¶ 15; 11, ¶ 25];
b. Aduwa did not even communicate with the Debtors by telephone or email to prepare them for the sworn testimony they would have to give at the meeting, [Id.];
c. Aduwa failed to advise the Debtors that he had a scheduling conflict, and that he would therefore be unable to attend the meeting, [Id.]; and
d. Aduwa failed to notify the Debtors that Carter would be representing them at the meeting. [Id.]. Carter is an attomey-at-law who is not employed by the Firm, but rather is an independent contractor who serves as an appearance attorney for various law firms, including the Firm. 7 [Doc. No. 170 at 6, ¶ 15].
39. On January 8, 2013, Ms. Bradley travelled to the courthouse to attend the meeting of creditors. Upon arrival, she was surprised to find that Carter was going to represent her at the meeting. Just prior to the beginning of the meeting, Carter met with Ms. Bradley to review the Amended Conversion Schedules and the Amended Conversion SOFA with her, as Carter knew the Trustee would be asking Ms. Bradley questions about the documents and the information contained therein. Ms. Bradley informed Carter that the Amended Conversion Schedules and the Amended Conversion SOFA contained errors. [Doc. No. 132 at 4, ¶ 14]; [Tape Recording, Jan. 8, 2013 Meeting of Creditors at 02:24-03:05].
40. Mr. Bradley, a truck driver, did not attend the January 8, 2013 meeting; he was on the road. [Tape Recording, Jan. 8, 2013 Meeting of Creditors at 00:42-00:52], Bankruptcy Local Rule 2003-l(a) requires the filing of a motion to excuse a debtor from a meeting of creditors; however, no such motion was filed prior to the January 8, 2013 meeting. 8
*764 41. Once the January 8, 2013 meeting of creditors began, the Trustee learned of the inaccuracies in the Amended Conversion Schedules and the Amended Conversion SOFA. [Doc. No. 132 at 4-5, ¶ 15]. Moreover, Ms. Bradley informed the Trustee that she did not really want to be in Chapter 7, but rather, wanted to try and cure the default in the payments under the Modified Plan in the Chapter 13 case. [Tape Recording, Apr. 26, 2013 Hearing at 11:56:27-11:57:11 a.m.]. The Trustee decided to continue the meeting of creditors to allow the inconsistencies in the Amended Conversion Schedules and the Amended Conversion SOFA to be corrected and, additionally, to allow Mr. Bradley to attend and testify about the information contained therein. [Tape Recording, Jan. 8, 2013 Meeting of Creditors at 04:42-05:47].
42. After the January 8, 2013 meeting of creditors, Carter notified Aduwa of the continued meeting and the deficiencies in the Debtors’ Amended Conversion Schedules and the Amended Conversion SOFA. [Tape Recording, Jan. 22, 2013 Meeting of Creditors at 04:48-05:03; 05:38-05:45],
43. Ms. Bradley again emailed Mr. Bradley’s updated earnings to the Firm on January 8, 2013. [Doc. No. 132-1 at 3]; [Tape Recording, Jan. 22, 2013 Meeting of Creditors at 05:02-05:32, 05:55-06:06]; [Tape Recording, Mar. 7, 2013 Hearing at 10:53:40-10:54:55 a.m.]. This information was needed to correct the Amended Conversion Schedules. It appears that Aduwa directed Gutierrez to file Schedule I (the Amended Conversion Schedule I) and Schedule J of the Amended Conversion Schedules on January 7, 2013, despite the fact that they still did not contain the Debtors’ current financial information. [Doc. No. 123 at 1]; [Doc. No. 170 at 5-6, ¶ 13].
44. There were glaring inconsistencies between the Amended Conversion Schedules and the Amended Conversion SOFA. For example, the employer listed for Mr. Bradley on the Amended Conversion Schedule I was not his current employer, nor were the income amounts listed in item number one of the Amended Conversion SOFA accurate. [Tape Recording, Mar. 7, 2013 Hearing at 10:56:35-10:58:34 a.m.]; [Tape Recording, Jan. 8, 2013 Meeting of Creditors at 02:28-03:06]. The Statement of Intent also incorrectly declared that the Debtors intended to surrender the vehicle used by Mr. Bradley for work purposes. [Tape Recording, Jan. 8, 2013 Meeting of Creditors at 02:28-03:06].
45. The inaccuracies in the Amended Conversion Schedules and the Amended Conversion SOFA were not corrected before the continued meeting of creditors on January 22, 2013 — the next amended Schedule I was not filed with the Court until after the continued meeting of creditors on January 22. See [Finding of Fact No. 51]. Therefore, the Trustee was still relying upon the inaccurate Amended Conversion Schedules and the Amended Conversion SOFA at the continued meeting of creditors.
46. During the continued meeting of creditors held on January 22, 2013, the Debtors gave testimony about the continued inaccuracies in the Amended Conversion Schedules. [Tape Recording, Jan. 22, 2013 Meeting of Creditors at 02:47-07:05]; see also [Doc. No. 170 at 7, ¶ 17].
47. Ms. Bradley further testified that she and her husband did not review or sign the Initial Conversion Schedules, the Initial Conversion SOFA, the Amended Conversion Schedules, or the Amended Conversion SOFA. [Tape Recording, Jan. 22, 2013 Meeting of Creditors at 06:30-07:07]; see also [Doc. No. 132 at 5, ¶ 16]; [Doc. No. 166 at 7, ¶ 17].
48. Ms. Bradley incorrectly testified at the opening of the January 22, 2013 continued meeting of creditors that she “had *765 reviewed and signed with her own signature the Petitions, Schedules, SOFA, and other documents filed in this proceeding,” when in fact she had not. [Tape Recording, Jan. 22, 2013 Meeting of Creditors at 01:01-01:08]. Ms. Bradley testified as such out of the belief that the Firm had had her sign all relevant documents, and that the Schedules and SOFA to which the Trustee referred were in fact documents that she had signed at the meetings of creditors. [Id. at 07:18-07:30]; [Tape Recording, Apr. 26, 2013 Hearing at 12:04:10-12:05:28 p.m.]. When the Trustee asked for clarification about whether she had signed the Amended Conversion Schedules and the Amended Conversion SOFA, Ms. Bradley, in turn, asked Carter if she had actually signed them, and he replied that he did not know. [Tape Recording, Jan. 22, 2013 Meeting of Creditors at 01:42-01:53]. Ms. Bradley then informed the Trustee that the only documents that she had signed were the documents that she signed at the meetings of creditors, and that she had not reviewed any Schedules or SOFA since the January 8, 2013 meeting of creditors. 9 [Id. at 01:53-02:20]. Ms. Bradley, therefore, committed perjury by twice signing statements — at the January 8 and January 22, 2013 meetings of creditors — that she had personally reviewed and signed all Schedules and SOFA, as well as briefly orally testifying to the same on January 22.
49. During the January 22, 2013 continued meeting of creditors, Ms. Bradley reiterated her desire and her husband’s desire to remain in Chapter 13 and repay their creditors, rather than convert to Chapter 7. [Id. at 11:37-11:58]; see also [Doc. 132 at 5, ¶ 16].
50. At the continued meeting of creditors on January 22, 2013, Ms. Bradley also testified about her frustrations with the legal representation the Debtors received from the Firm and the continuing string of attorneys that had represented the Debtors. After discovering that the Amended Conversion Schedules and the Amended Conversion SOFA had still not been corrected, Ms. Bradley explained to the Trustee:
“For the record, this is ridiculous. And it’s not your fault, obviously. I submitted everything to them before we went to court on the 8th, and then I resubmitted it when we, when I left here on the 8th, I resubmitted everything. You know, I had to call three times about that stay for the vehicle. Mr. Aduwa finally on the 17th, after I sent his paralegal, you know, an email that was a little bit rude, he finally, he tells me ‘oh well we have until the 22nd to file the motion.’ So you’re gonna wait until the last day when I told you on the 8th that this stuff needed to be done? Like, what did I pay for?”
[Tape Recording, Jan. 22, 2013 Meeting of Creditors at 05:51-06:28]. When further explaining to the Trustee the amounts that the Debtors paid for representation in their Chapter 13, Ms. Bradley stated:
We were completely mislead and misconstrued with [the Chapter 13] as well.... They told us that we need ev *766 erything, you know, that was in a loan, we needed to file with the Trustee’s office, go ahead and put it all together. The truck, I was ahead on my truck notes. Every month I was sending a minimum of $50.00 extra on the principal. Uh, that January before we filed I had sent them double on the payment plus extra. You know, and [the Firm’s employees] were like, “Oh, no, don’t worry about it, it has to be included, it needs to be included.” And then when I spoke to Mr. Aduwa because of this, you know, Chrysler sending in the motion that they want to repo the truck basically, you know and I told him, “Well, you, you even told us if the case were to be converted, as long as we were current before, we wouldn’t have to pay, you know we wouldn’t have to worry about that, just continue to make the regular payments.” And he said, “Well no, you know, the interest is gonna go up.”
“I understand that, but you didn’t say that it’s gonna cause us to look like we were behind and then have to, now your telling us that we have to pay $13,000.00 or we lose, we lose the truck. You never told us that.”
“Well, you know, you were behind on the truck.”
“No I was not behind on the truck.”
And so he went through, “Oh, well then why did you file it in the 13, I don’t understand, you shouldn’t have done that.”
[Id. at 08:02-09:17]. Finally, the Trustee inquired as to why Ms. Bradley had changed attorneys so often, and she responded:
Macey and Aleman has changed their attorneys. I don’t know what kind of conflict. I have no idea. They don’t tell us, they just say “Oh, you have a new attorney now, you have a new attorney now.” You know.
[Id. at 09:45-09:57]. The Trustee then interrupted to inquire as to who Macey and Aleman was, and if it was a predecessor to the Firm. [Id. at 09:57-10:04]. Carter explained that the Firm was formerly Macey and Aleman, but that it was currently the Macey Bankruptcy Firm. [Id. at 10:05-10:33]. The U.S. Trustee’s representative (Lucy Davis) then inquired whether all of the former attorneys for the Debtors had worked for Macey and Ale-man and Carter responded in the affirmative, and that he had worked with all of them at one point. [Id. at 10:33-11:24].
51. On January 22, 2013, the Firm filed another amended conversion Schedule I (the Second Amended Conversion Schedule I). [Doc. No. 128]. The Second Amended Conversion Schedule I was filed with the Court at 2:49 p.m. central standard time [M] — almost two full hours after the continued meeting of creditors was scheduled to begin.
52. Aduwa regularly sends Carter, the appearance attorney, to appear at meetings of creditors to represent debtors who are clients of the Firm. [Doc. No. 170 at 6, ¶ 15]; [Tape Recording, Apr. 26, 2013 Hearing at 10:43:23-10:47:50 a.mj. Aduwa and the Firm maintain that Carter is only dispatched to creditors’ meetings and uncontested court hearings. [Doc. No. 170 at 6, ¶ 15]; [Tape Recording, Apr. 26, 2013 Hearing at 10:43:23-10:47:50 a.m.].
53. Aduwa did not adequately prepare Carter for the initial meeting of creditors held on January 8, 2013, or the continued meeting of creditors on January 22, 2013. [Tape Recording, Apr. 26, 2013 Hearing at 10:37:30-10:38:56 a.m.; 10:48:15-10:48:59 a.m.]. Aduwa was out of the office for the two weeks prior to this initial meeting of creditors and sent Carter on his behalf so that he (i.e., Aduwa) could address the backlog of issues that had arisen in his absence. 10 [Id. at 10:40:57-10:42:19 a.m.]. *767 As a result, Carter was unprepared to handle the situation that arose when Ms. Bradley realized that the Amended Conversion Schedules and the Amended Conversion SOFA were incorrect.
54. The Firm pays Carter $100.00 for each meeting of creditors he attends on behalf of the Firm. [Id. at 10:46:16-10:46:51 a.m.]. Carter is also paid $75.00 for each courtroom appearance he makes in place of Aduwa. [Id. at 10:46:51-10:47:28 a.m.]. Testimony at the April 26, 2013 hearing on the SCO indicates, and an examination of the relevant documents confirms, that the Firm did not properly disclose the Firm’s payments to Carter under Bankruptcy Rule 2016. [Id.]; see also [Doc. No. 1 at 35]; [Doc. No. 77]. 11
55.The relationship between Carter and the Firm is longstanding. Carter has appeared in the place of Firm attorneys for the last several years. Though it is not clear exactly how long Carter has appeared on behalf of the Firm’s attorneys, the Firm was already using Carter when Aduwa joined the Firm in 2010. [Tape Recording, Apr. 26, 2013 Hearing at 10:47:28-10:47:50 am.]. 56. Carter also appeared on behalf of Aduwa at the continued meeting of creditors held on January 22, 2013, though it appears that this was a last-minute arrangement. [Doc. No. 132-1 at 1]; [Doc. No. 170 at 7, ¶ 17]. Aduwa fell ill the day of this continued meeting and sent Carter so that there would be some representation on behalf of the Debtors. [Doc. No. 170 at 7, ¶ 17]; [Tape Recording, Apr. 26, 2013 Hearing at 10:48:57-10:49:32 p.m.]. Aduwa did not notify the Debtors that Carter would be representing them at the continued meeting of creditors. [Tape Recording, Apr. 26, 2013 Hearing at 10:37:30-10:38:56 a.m.]. Due to the last-minute arrangement, Carter was unprepared for this meeting. [Doc. No. 170 at 7, ¶ 17].
57. On January 29, 2013, Joseph Hill, the Chapter 7 Trustee in this case (the Trustee), filed a motion titled: “Trustee’s Amended Motion to Set Show Cause Hearing to Require Nosa Aduwa and Macey Bankruptcy Law, PC to Appear and Show Cause Why they Should Not Be Required to Disgorge Fees Pursuant to 11 U.S.C. 526” (the Motion). [Doc. No. 132]. The Motion made several serious allegations about the conduct of the Firm and the attorney-in-charge (i.e., Aduwa) responsi *768 ble for representing the Debtors in this case. The Motion requested this Court to set a hearing requiring the Firm and Adu-wa to appear and show cause why the Firm should not be required to disgorge fees pursuant to 11 U.S.C. § 526 (c)(2)(A) and sanctioned pursuant to 11 U.S.C. § 105 , including paying the Trustee’s attorney’s fees for having to prosecute the Motion.
58. Following the filing of the Motion, the Firm returned the $524.00 that it had charged the Debtors for the Chapter 7 conversion (i.e., the $550.00 paid by Ms. Bradley less the $26.00 conversion fee). [Doc. No. 170 at 15, ¶ 36]; see also [Tape Recording, Apr. 26, 2013 Hearing at 12:22:46-12:23:14 p.m.].
59. The Firm has not returned to the Debtors any of the fees that the Firm collected prior to the Debtors’ conversion. [Tape Recording, Apr. 26, 2013 Hearing at 12:09:05-12:09:11 p.m.]. That is, the Firm has not returned any of the fees that it received from the Debtors relating to the prosecution of the Debtors’ Chapter 13 case.
60. On February 19, 2013, Aduwa and the Firm filed their response to the Motion (the Motion Response). [Doc. No. 140]. Aduwa signed the Motion Response for both the Firm and himself. The Motion Response admitted that “clearly inadvertent errors” were made in the representation of the Debtors, but asserted that no show cause hearing should be held, [Id. at 1, ¶ 1; 6, ¶ 38], and that all relief requested by the Trustee should be denied, [Id. at 7]. After considering the Motion and the Motion Response, the Court decided to schedule a hearing on the Motion for March 7, 2013. The purpose of this hearing was to determine if this Court should issue a show cause order.
61. On March 7, 2013, the Trustee appeared through his counsel, while the Firm appeared through Aduwa. Aduwa also appeared on his own behalf. The Trustee introduced exhibits and adduced testimony from one witness: Ms. Bradley; her husband and she are the Debtors in this case. Ms. Bradley gave uncontroverted and credible testimony that proved up many of the allegations in the Motion and greatly concerned this Court.
62. As a result of Ms. Bradley’s testimony, this Court issued a Show Cause Order (the SCO) on March 15, 2013. [Doc. No. 157]. The hearing on the SCO was set for April 26, 2013, and required Aduwa and the Firm’s two name partners — Thomas G. Macey (Macey) and Jeffrey J. Ale-man (Aleman) 12 — to appear and show cause why each of them, in their individual capacities, and the Firm “should not be sanctioned pursuant to 11 U.S.C. § 526 and other applicable law” for the following:
a. Filing the Schedules and SOFA with forged signatures of the Debtors;
b. Filing the Schedules and SOFA without an attorney from the Firm personally meeting with the Debtors to review the Schedules and SOFA for accuracy;
c. Allowing a legal assistant to practice law;
d. Neglecting to ensure that the attorney-in-charge (i.e., Aduwa) has face-to-face communications with the clients (i.e., the Debtors);
e. Failing to prepare the clients for the meeting of creditors;
*769 f. Not appearing at the meeting of creditors to represent the clients;
g. Sending an uninformed appearance attorney to the meeting of creditors to represent the clients;
h. Misrepresenting to the Court in a Rule 2016 Disclosure [Doc. No. 77] the amount of money paid by the Debtors for prosecution of their Chapter 13 case; and
i. Misrepresenting to the Court in a Rule 2016 Disclosure [Doc. No. 121] the amount of money paid by the Debtors for prosecution of the case after conversion to Chapter 7.
In addition to requiring Macey, Ale-man, and Aduwa to appear and show cause why they should not be sanctioned, the SCO also required Gutierrez to appear and show cause why she should not be sanctioned for practicing law without a license.
63.On April 22, 2013, the Firm filed a Response to the SCO (the SCO Response), [Doc. No. 166], Unlike the Motion Response, the SCO Response was not filed by Aduwa, but rather by Tom Kirkendall (Kirkendall), a private attorney with offices in The Woodlands, Texas. The Firm retained Kirkendall to represent it at the hearing on the SCO. The SCO Response is well drafted and refreshing for its candor to the Court. It concedes that the quality of the representation of the Debtors, at least for a certain period of time, was unacceptable; it sets forth what steps the Firm has taken since receiving the SCO; and it argues that the substandard representation, while regrettable, was not done in bad faith. The SCO Response also lays out several remedial measures that the Firm has implemented since this Court issued the SCO. The Firm returned the conversion fee to the Debtors, less the cost of filing, [Id. at 14-15, ¶ 36], paid the retainer of the Debtors’ new counsel, [7dL], and paid the legal expenses incurred by the Trustee and the U.S. Trustee for the services their respective attorneys have rendered relating to the show cause hearings, [Id.].
64. On April 26, 2013, the Court held a hearing on the SCO. Kirkendall represented the Firm at the hearing; Aduwa represented himself; Gutierrez represented herself, pro se; the Trustee appeared through his counsel, Tim Wentworth; and the Office of the U.S. Trustee appeared through its counsel, Ellen Hickman.
65. After listening to the April 26, 2013 testimony, reviewing exhibits, and hearing closing arguments, the Court took the SCO matter under advisement.
66. Additionally, based on issues raised during the April 26, 2013 hearing, the Court became concerned that the Firm might be handling other cases improperly. The Court directed Kirkendall to examine a random selection of currently pending case files at the Firm’s Houston office. [Tape Recording, Apr. 26, 2013 Hearing at 12:38:55-12:41:22 p.m.]. Specifically, Kirk-endall was ordered to randomly select twenty files from the Firm’s Houston office and examine them to determine whether there were “wet” signatures on all Schedules and Statements of Financial Affairs. [Id.].
67. Following the April 26, 2013 hearing, Kirkendall undertook the ordered examination and filed a report disclosing that he found three files with improper or incomplete “wet” signatures. [Doc. No. 169],
68. On May 23, 2013, this Court held a hearing regarding Kirkendall’s report about the three files with improper or incomplete “wet” signatures. Based upon Kirkendall’s report and comments made at this hearing, the Court concluded that a review of all of the Firm’s files at the Houston office was appropriate. Accord *770 ingly, the Court ordered Kirkendall to either personally examine or supervise the examination of all files at the Firm’s Houston office. [Tape Recording, May 23, 2013 Hearing at 2:51:35-2:53:31 p.m.].
69. At this hearing, Kirkendall advised the Court that the Firm had filed an amended response to the SCO [Doc. No. 170]. This updated response amended paragraphs 10 and 12 to reflect the corrected recollection of Gutierrez, who now recalled that Ms. Bradley did not, in fact, come to the Firm’s office on December 17, 2012, but rather came to the office on December 18, 2012. [Tape Recording, May 23, 2013 Hearing at 2:58:28-3:00:27 p.m.].
70. After the May 23, 2013 hearing, Kirkendall undertook an examination of all bankruptcy case files at the Firm’s Houston office. Kirkendall reported his findings to this Court on June 18, 2013. [Doc. No. 172]. Kirkendall’s report indicates that there are a total of 192 active case files at the Firm’s Houston office. [Id.]. Of those, Kirkendall discovered that twelve (12) files either: (1) did not contain a full set of the debtor’s “wet” signatures; or (2) lacked the required signatures altogether. [Id.].
71. In 2012, subsequent to the filing of the Debtors’ case, the Firm merged its bankruptcy practice with the personal injury practice of Jacoby & Myers, L.L.P. Every indication is that the Firm continues to operate as it had before the merger, only under a new name, Jacoby & Myers Bankruptcy, L.L.P. [Tape Recording, Apr. 26, 2013 Hearing at 12:24:34-12:27:45 p.m.]. Clients were notified by email of the Firm’s name change; however, the filings with the State of Texas regarding this merger are not yet complete, and the Firm still does business in Texas under its former name. [Id.].
III. Credibility of Witnesses
At the hearing on the SCO held on April 26, 2013, the following witnesses testified: (1) Richard Gustafson (Gustafson), a partner at the Firm who has not handled the Debtors’ case in any way; (2) Aduwa, the attorney in charge of the Macey Firm’s Houston office, and the attorney who handled the Debtors’ case from 2010 until they retained new counsel in March of this year; (3) Gutierrez, a legal assistant in the Firm’s Houston office who handled many aspects of the Debtors’ case; (4) Aleman, managing partner of the Firm; (5) Macey, managing partner and founder of the Firm; and (6) Ms. Bradley, one of the Debtors in this case. After listening to the testimony, the Court makes the following observations and findings regarding the credibility of these witnesses.
A. Richard Gustafson
Gustafson is a partner at the Firm. [Tape Recording, Apr. 26, 2013 Hearing at 10:15:07-10:15:14 a.m.]. He testified about the state of the Firm and its practice in the State of Texas, specifically since 2010. [Id. at 10:16:01-10:19:32 a.m.]. He testified that the Firm is in the process of closing out its practice in Texas. [Id.]. He testified that this is due to the general decline in the cases coming into the Firm’s Houston office. [Id.]. Gustafson further testified about the steps taken by the Firm to remedy the problems made apparent by the case at bar. [Id. at 10:25:42-10:26:10 a.m.]; see also [Doc. No. 166 at 15-16, ¶ 37]; [Doc. No. 170 at 16-17, ¶ 37], Further testimony related to the use of “appearance attorneys” by the Firm, as well as the procedures currently in place to oversee the attorneys working in the Firm’s various offices located throughout the United States. [Tape Recording, Apr. 26, 2013 Hearing at 10:14:08-10:32:42 a.m.]. Gustafson’s testimony about the *771 Firm’s use of appearance attorneys is that, “We don’t like to use appearance counsel unless its necessary, usually the necessity would be because of a conflict of calendar or an illness or something like that.” [Id. at 10:21:06-10:21:17 a.m.]. This testimony conflicts with the email that Gutierrez sent to Ms. Bradley on January 23, 2013, which states that Aduwa “normally does not attend the 341 meetings” and that “Carter attends those as well as our court hearings.” [Trustee’s Ex. A at 2], This conflicting testimony underscores the Firm’s failure to supervise the personnel at the Houston office as much, if not more, than it undermines Gustafson’s credibility.
Gustafson also gave his assessment of the Debtors’ case and Aduwa’s handling of it as the attorney-in-charge. [Tape Recording, Apr. 26, 2013 Hearing at 10:20:43-10:20:18 a.m.]. His responses seemed candid and generally sincere, as did his apology to both the Court and the Debtors about the improper handling of the Debtors’ ease. Gustafson also provided some testimony regarding prior sanctions proceedings involving the Firm. [Id. at 11:32:40-11:34:25 a.m.]. During this testimony, Gustafson seemed honest and forthright with the information he provided to the Court.
In sum, the Court finds that Gustafson is a credible witness. He was willing to candidly discuss the failures of the Firm. The Court also appreciates his knowledge of prior sanctions proceedings against the Firm. Accordingly, the Court finds him to be, for the most part, a credible witness and gives more weight to his testimony than to the testimony of his fellow partners, Macey and Aleman.
B. Nosa Aduwa
Aduwa is the Debtors’ former lawyer and one of the subjects of the SCO. Aduwa testified as to his actions both before and after the transgressions discussed herein took place. Aduwa was generally forthright with his admissions and willing to take responsibility for the various violations and errors that he made as attorney-in-charge of the Debtors’ case. For example, Aduwa admitted that he did not adequately prepare the appearance attorney (i.e:, Carter) to represent the Debtors at their meeting of creditors. [Id. at 10:37:30-10:38:56 a.m.]; [Finding of Fact No. 53]. He further admitted that he did not follow the Firm’s internal policies for sending an appearance attorney to a proceeding in his place. [Tape Recording, Apr. 26, 2013 Hearing at 10:37:30-10:38:56 a.m.].
However, Aduwa’s credibility is damaged by the fact that there are contradictions between Ms. Bradley’s testimony and the SCO Response filed with this Court. For example:
1. The SCO Response claims that Ms. Bradley called the Firm on November 9, 2013, to state her desire to convert to Chapter 7, [Doc. No. 166 at 3, ¶ 7], whereas Ms. Bradley testified that she steadfastly preferred to remain in Chapter 13 and only made the decision to convert after Gutierrez advised her that it was the only option, [Tape Recording, Apr. 26, 2013 Hearing at 11:59:13-11:59:41 a.m.]; and
2. The SCO Response claims that Ms. Bradley visited the Firm’s office on December 17, 2013, to pay the conversion fee and that Gutierrez completed the Notice of Conversion while Ms. Bradley waited, [Doc. No. 166 at 4, ¶ 12], whereas Ms. Bradley testified that she visited the office a day or two after the 17th and that Gutierrez did not prepare the Notice of Conversion while Ms. Bradley was present, but rather that Ms. Bradley paid the conversion fee and *772 then left, [Tape Recording, Apr. 26, 2013 Hearing at 12:00:40-12:02:32 p.m.].
Kirkendall, the private attorney retained by the Firm, filed the SCO Response; however, Aduwa worked closely with him in preparing the document. [Id. at 11:52:12-11:53:01 a.m.]. Further, Aduwa has repeatedly made representations to this Court, through submitting the documents electronically, that he had the original documents with “wet” signatures on file in his office when, in fact, he did not. 13 [Doc. Nos. 121, 122, 123, 124]; [Finding of Fact Nos. 31, 32, 35, 36]. Finally, Aduwa did not personally appear at either meeting of creditors, and did not give the Debtors notice on either occasion that they would be represented at those meetings by Carter and not Aduwa himself. [Finding of Fact Nos. 39, 55]. These contradictions and Aduwa’s conduct call his credibility into question. Accordingly, the Court finds Aduwa to be a somewhat, but not entirely, credible witness; and therefore gives only some weight to his testimony.
C. Aurelia Gutierrez
There are several inconsistencies in Gutierrez’s testimony that call her credibility into question:
1.Gutierrez testified that Ms. Bradley came to the Firm’s office on December 17, 2012 — the final day to file a conversion — and reviewed the Notice of Conversion and paid the $550.00 fee. [Tape Recording, Apr. 26, 2013 Hearing at 12:18:48-12:19:12 p.m.]. This testimony conflicts directly with the testimony of Ms. Bradley, who adamantly testified that she did not go to the Firm’s office until a day or two after the 17th. [Id. at 12:00:40-12:00:53 p.m.]. The receipt Gutierrez wrote Ms. Bradley upon payment of the conversion fee further contradicts Gutierrez’s testimony. The receipt is dated December 18, 2012. [Doc. 132-2 at 2],
2. Since the hearing on the SCO, Gutierrez has changed her story regarding the day Ms. Bradley came to the Firm’s office. Gutierrez now recalls that Ms. Bradley did come to the office on December 18, 2012, and not on December 17, 2012, as she testified during the hearing on the SCO. [Doc. No. 170]; [Tape Recording, May 23, 2013 Hearing at 2:59:48-3:1:42 p.m.]. Given the electronic log software the Firm employs, and that Gutierrez testified that she reviewed all electronic logs and emails in the preparation of the SCO Response, [Tape Recording, Apr. 26, 2013 Hearing at 10:51:30-10:52:20 a.m.], the Court is troubled by the difficulties Gutierrez has with her recollection in this regard.
3. When questioned by the Court regarding the files at the Firm’s Houston office, Gutierrez testified that there were no files other than the one for the case at bar, that she was aware of, that did not contain proper signatures. [Id. at 10:57:30-10:58:12 *773 a.m.]. Further, she testified that all the cases in which she was involved had the proper “wet” signatures on the paperwork. [Id. at 10:56:29— 10:57:32 a.m.]. However, Kirken-dall’s examination of all of the Firm’s case files at the Houston office revealed twelve (12) files that contain incomplete sets of “wet” signatures. [Finding of Fact No. 70]. A number of these files contain documents that simply do not bear the required signatures of the debtor. [Id.]. At least two of these cases were filed after 2010 (i.e., after Gutierrez began working for the Firm). Because Gutierrez is the only full time legal assistant in the Firm’s Houston office, the Court has difficulty entertaining the notion that Gutierrez was simply unaware of these files. The evidence contradicts her proclamations that all of the files in the Firm’s Houston office were complete and calls her credibility into question.
All in all, the Court finds that Gutierrez is not a particularly credible witness. Accordingly, the Court gives very little weight to her testimony.
D. Jeffrey Aleman
Aleman is a managing partner at the Firm. [Tape Recording, Apr. 26, 2013 Hearing at 11:01:55-11:02:01 a.m.]. He testified about his past responsibilities within the Firm and about his own history with the Firm. [Id. at 11:02:01-11:11:08 a.m.]. His testimony also outlined some of the changes that have occurred within the Firm, including its shift from a document preparation service to a full service law firm. 14 [Id.].
The Court questions Aleman’s credibility for the following reasons:
1. Aleman was unable to provide any insight into prior sanctions proceedings against the Firm. When asked if the Firm was ever previously subjected to sanctions, Aleman responded, “I believe we have, I don’t know off the top of my head what instance that was or what case that was.” [Id. at 11:08:01-11:08:10 a.m.]. In fact, it was Kirkendall, the private lawyer representing the Firm, who disclosed certain prior cases where sanctions were imposed against the Firm. [Id. at 11:11:25-11:12:28 a.m.]. Given the nature of the hearing at which Aleman was testifying, the Court would have expected him to arrive more prepared to speak candidly about such matters. Indeed, this is the third time the Firm has been the subject of a show cause hearing in front of this Court within the last three years. See [In re Salinas, No. 06-33383 (Bankr.S.D.Tex.), Doc. No. 104]; [In re Williams, No. 08-31607 (Bankr. *774 S.D.Tex), Doc. No. 115]. In fact, this Court sanctioned the Firm in Salinas, [In re Salinas, No. 06-33383, Doc. No. 119], and Aleman was present at the hearing on the motion to show cause in that case on December 20, 2010, [In re Salinas, No. 06-33383, Tape Recording, Dec. 20, 2010 Hearing at 8:35:58-8:36:53 a.m.].
2. Furthermore, in at least one instance, Aleman himself'was ordered to show cause why the Firm should not be sanctioned in another court. In 2009, Bankruptcy Judge Russell Nelms, of the Northern District of Texas, ordered Aleman to appear in his court for a show cause hearing. Subsequent to that hearing, Judge Nelms issued severe sanctions against the Firm, and announced his findings at a hearing at which Ale-man appeared by telephone. 15 [In re Schoch, No. 05-44801-RFN-13 (Bankr.N.D.Tex.), Nov. 20, 2009, Tr. 7:9-7:12]. The Court is disturbed that Aleman could not recall these proceedings, and his failure to recollect past sanctions against the Firm strongly calls his credibility into question.
In sum, the Court does not find Aleman to be an overly credible witness and gives little weight to his testimony.
E. Thomas Macey
Macey is the founder of the Firm and a managing partner at the Firm today. He testified about the origins of the Firm. He admitted in his testimony that there were mistakes made in this case. Macey did not, however, seem very apologetic. He testified that he believes the Firm represents clients better than the vast majority of consumer bankruptcy firms, and he supported this belief with declarations of the hours that the Firm’s attorneys work:
I’d put forth that we do a better job than the vast, vast majority of bankruptcy practitioners out there. I mean we are available six days a week; we’re there ten hours a day; we’re there, you know, seven hours on Saturdays. We have more experience when it comes to consumer bankruptcy than I would say again, you know, 95%, 99%, cumulatively, of the, you know, bankruptcy practitioners out there. So, you know, do mistakes happen? You know, absolutely. Are we apologetic for that mistake? Yes. Was there ultimately harm to the debtor? No. Did we make repercu ... remunitions 16 [sic] to the Trustee? You know, yes. You know, we do our absolute best and, you know, we made a mistake, an honest mistake here, and that is not how we run our practice.
[Tape Recording, Apr. 26, 2013 Hearing at 11:18:49-11:19:52 a.m.]. Such hubris might otherwise be excusable were it not for his declaration that no harm was done to the Debtors in this case. [Id. at 11:19:36-11:19:39 a.m.]. Such a statement is absurd in the current situation, where, as a result of the filing of the false Initial Conversion Schedules, Initial Conversion SOFA, Amended Conversion Schedules, and Amended Conversion SOFA, Ms. Bradley — in reliance upon the Firm’s personnel completing these documents (specifically Aduwa and Gutierrez) — committed perjury *775 at the meetings of creditors by representing under oath that she had indeed reviewed and signed those documents and that they were accurate. 17 [Finding of Fact No. 48]. Moreover, the Debtors now find themselves in a Chapter 7 case, when they maintain that they could, and would have preferred to, have continued in their Chapter 13 case. [Finding of Fact No. 49]. If Aduwa had actually taken the time to meet with the Debtors personally, he might have concluded that the Modified Plan in their Chapter 13 case could be further amended, making the conversion to Chapter 7 unnecessary. Thus, Macey’s conclusion that the Debtors were not harmed does not come within hailing distance of the truth.
Macey was aware of one of the recent cases where the Firm was sanctioned: In re Love, 461 B.R. 29 (Bankr.N.D.Ill.2011). However, Macey maintained — in the strongest terms — that the judge’s ruling in that opinion was incorrect. [Tape Recording, Apr. 26, 2013 Hearing at 11:29:15-11:30:55 a.m.]. Macey, however, did not articulate why the bankruptcy judge was incorrect. 18 Macey was, at least, also aware of the sanctions imposed against the Firm by this Court in Salinas, but like his partner, Aleman, Macey could not testify regarding any details in Salinas.
In sum, the Court finds Macey to be a more credible witness than Aleman, as Aleman’s testimony was more unbelievably vague, although this finding is by no means a ringing endorsement of Macey’s credibility and reputation. Overall, the Court finds Macey to be a somewhat credible witness. The Court gives his testimony some, but not substantial, weight.
F. Sarika Bradley
Ms. Bradley testified about the process Aduwa, Gutierrez, and the Firm used both before and after converting her case from Chapter 13 to Chapter 7. She testified that neither her husband nor she had any in-depth, face-to-face discussions with Aduwa about the conversion or explanations of the implications of converting their case to Chapter 7. [Id. at 11:56:05 a.m.-12:02:25 p.m.]. She further testified that neither of them were present when the Notice of Conversion was prepared or signed. [Id.]. Further, she testified about the process by which the Firm prepared the Initial Conversion Schedules, the Initial Conversion SOFA, the Amended Conversion Schedules, and the Amended Conversion SOFA — and her discovery of the errors contained therein. [Id. at 12:02:10-12:02:31 p.m.; 12:11:42-12:13:45 p.m.].
Ms. Bradley testified concerning discrepancies in assertions made by Aduwa, Gutierrez, and Macey concerning the Firm’s representation of the Debtors. She specifically cited an inconsistency between the email Gutierrez sent her on January 23, 2013 — which states that Aduwa “normally does not attend the 341 meetings,” [Trustee’s Ex. A at 2], and that “Carter attends those as well as our court hearings,” [Id.] — versus the testimony by Gus-tafson (a partner at the Firm) that, “We don’t like to use appearance counsel unless its necessary, usually the necessity would be because of a conflict of calendar or an *776 illness or something like that,” [Tape Recording, Apr. 26, 2013 Hearing at 10:21:06-10:21:17 a.m.].
Ms. Bradley also disputed the assertions in the SCO Response that she had wanted to convert her case to Chapter 7 as early as November 9, 2012. Paragraphs 7 and 8 of the SCO Response state that she desired to convert her case and had promised to contact Aduwa by the end of November 2012 about how to proceed. She rebutted this claim, angrily stating, “I did not choose to go under a Chapter 7; I had called him on that day [November 9, 2012] to ask what the options were. I never said ‘I’m ready to go under a Chapter 7.’ ” [Tape Recording, Apr. 26, 2013 Hearing at 11:56:04-11:57:06 a.m.]; see also [Doc. No. 166 at 3, ¶ 7].
Ms. Bradley took particular offense at the assertion that the Firm’s mistakes did not harm the Debtors. When asked if she disagreed, she heatedly replied:
He [Aduwa] put me in a position where I had committed perjury when the Chapter 7 Trustee, in front of the 341 creditor meeting, I was asked did I sign documents. To my understanding of “documents” [they] were the ones I had signed; so that’s what I’m thinking I’m saying yes to. Then come to find out its stuff that my attorney was supposed to do, so for one I’ve committed perjury, for two I have kids. Ok, I may not make $3,500.00 dollars per case but I do work hard, my husband works hard; we have a home, we have vehicles, and his form of employment is through a vehicle. Because of the mistakes and because of the inaccuracies that [Gutierrez] — the legal assistant who should not have even been guiding me — told me, my husband no longer has that form of employment. I’m still in jeopardy of losing my home with my second lien, so for you to say that no harm was done; I find that like a slap in my face. You know, like I said, I don’t make money like you do Mr. Maeey, but that, ... I was harmed.
[Tape Recording, Apr. 26, 2013 Hearing at 12:04:10-12:05:28 p.m.]. When then asked if the return of her attorney’s fees would compensate her for the harm she suffered, she angrily continued:
That would be a start, but it still doesn’t ... I was almost done with my Chapter 13 ... it doesn’t compensate for perjury ... it doesn’t compensate for the negligence that their attorneys.... It’s like kids who cheat on a test, “Oh, I’m sorry, I’ve never done it before.” You’ve done it before. You know you’ve done it before, and it’s not gonna be the last time; you just got caught this time, again.
[Id. at 12:05:59-12:06:27 p.m.].
Various documents of, and statements by, the Trustee corroborate Ms. Bradley’s testimony. For example, Ms. Bradley testified that she did not visit the Firm’s office on December 17, 2012, but that her visit was at least a day later. As discussed above, the date on the receipt that Gutierrez wrote her when she made her payment supports Ms. Bradley’s testimony to this end. [Finding of Fact No. 26]. Moreover, Ms. Bradley’s stated desire to remain in Chapter 13, rather than convert to Chapter 7, has remained constant throughout her case, [Finding of Fact Nos. 41, 49], and only after Gutierrez advised her that she should convert, did she (and her husband) reluctantly decide to do so. Ms. Bradley testified that Gutierrez, not Aduwa, advised her that she needed to convert her case to Chapter 7:
I contacted the attorney’s office and they told me the only thing that would save me or any of my assets would be to file a Chapter 7 and that was actually told to me by Ray [i.e., Gutierrez], the legal assistant. So that is when I made *777 the decision, that is when we made the decision, to file a Chapter 7.
[Tape Recording, Apr. 26, 2013 Hearing at 11:59:13-11:59:29 a.m.].
Ms. Bradley’s testimony, and her distress and anger, were genuine. Ms. Bradley is not a sophisticated litigant, and she was justifiably very trusting of the Firm and its personnel. Once she discovered, however, that the Firm’s representation had harmed her husband and her, she rightfully became upset, and was fully capable of accurately recalling events and conversations. The Court finds her testimony to be credible and gives it significant weight.
IV. Conclusions op Law
A. Jurisdiction, Venue, and Constitutional Authority
The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 1334 (b) and 157(a). This proceeding is core pursuant to 28 U.S.C. § 157 (b)(2)(A) because the acts leading to the issuance of the SCO concerned the administration of the Debtors’ bankruptcy case. Additionally, this particular dispute is a core proceeding pursuant to the general “catch-all” language of 28 U.S.C. § 157 (b)(2). See Southmark Corp. v. Coopers & Lybrand (In re Southmark Corp.), 163 F.3d 925, 930 (5th Cir.1999) (“[A] proceeding is core under section 157 if it invokes a substantive right provided by title 11 or if it is a proceeding that, by its nature, could arise only in the context of a bankruptcy case.”). Here, the acts leading to the issuance of the SCO concern the conduct of attorneys who are counsel of record for the Debtors. This Court has the power to police the conduct of the attorneys who appear in this Court and to take action with respect to those attorneys who misbehave. Chambers v. NASCO, 501 U.S. 32 , 111 S.Ct. 2123 , 115 L.Ed.2d 27 (1991); Knight v. Luedtke (In re Yorkshire, LLC), 540 F.3d 328, 332 (5th Cir.2008). But for the existence of the Debtors’ case, the misconduct described in this Opinion would not have occurred. These circumstances make this dispute a core proceeding. Venue is proper pursuant to 28 U.S.C. § 1408 (1).
In the wake of the Supreme Court’s ruling in Stem v. Marshall, this Court must also evaluate whether it has the constitutional authority to enter a final order regarding the issues raised in the SCO. Stern v. Marshall, —U.S.-, 131 S.Ct. 2594 , 180 L.Ed.2d 475 (2011). In Stern , the Supreme Court held that 28 U.S.C. § 157 (b)(2)(C) — which authorizes bankruptcy judges to issue final judgments in counterclaims by a debtor’s estate against entities filing claims against the estate — is an unconstitutional delegation of Article III authority to bankruptcy judges, at least when the counterclaim being adjudicated is based solely on state common law and does not affect the claims adjudication process. Id. at 2616 .
The matter before the Court is not a counterclaim of the Debtors’ estate based solely on state law. Rather, this matter arises from this Court’s issuance of a show cause order to maintain the integrity of the bankruptcy process. This matter arises out of violations of various Code provisions, Bankruptcy Rules, and local Rules—specifically 11 U.S.C. § 329 (a), Bankruptcy Rules 9011(b), 5005(a)(2), and 2016, and Local Bankruptcy Rules 1001-1 and 5005-1—by Aduwa, an officer of this Court, his employer (i.e., the Firm) and Gutierrez, an employee of the Firm. This Court has authority under Bankruptcy Rule 9011(c) to impose sanctions for violations of Rule 9011(b); and also under 11 U.S.C. § 105 (a) and applicable case law to police the conduct of attorneys who appear in this Court and to impose sanctions on those attorneys who misbehave. Chambers, 501 U.S. 32 , 111 S.Ct. 2123 , 115 L.Ed.2d 27 ; In re Yorkshire, LLC, 540 *778 F.3d at 332 . In sum, the facts in the case at bar are wholly different from the facts in Stern .
For all of these reasons, the Court concludes that it has the constitutional authority to enter a final order imposing sanctions on Aduwa, Macey, Aleman, the Firm, and Gutierrez.
B. Aduwa Violated Federal Bankruptcy Rule 9011(b)
Federal Rule of Bankruptcy Procedure 9011 has important implications for attorneys who electronically file documents with this Court, or, for that matter, any bankruptcy court. In re Stomberg, 487 B.R. at 806-07. Specifically, Bankruptcy Rule 9011(b) provides:
(b) Representations to the Court. By Presenting to the court (whether by signing, filing, submitting, or later advocating) a petition, pleading, written motion or other paper, an attorney or unrepresented party is certifying that to the best of the person’s knowledge, information, and belief, formed after and inquiry reasonable under the circumstances,&emdash;(1) it is not being presented for any improper purpose, ... (2) the claims, defenses, and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law; (3) the allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery ...
Additionally, Local District Rule 11.1 requires that in each case, an attorney-in-charge be designated. 19 The attorney-in-charge is then responsible to the Court for the progression of the case and for the prosecution of the case. The attorney-in-charge, in signing pleadings filed with the court, must comply with Bankruptcy Rule 9011(b) and must also appear at all court proceedings, or send a fully informed attorney in his or her place. S.D. Tex. Local R. 11.2.
1. Aduwa Violated Bankruptcy Rule 9011(b)(3) by Failing to Obtain the Debtors’ Signatures on the Notice of Conversion, the Initial Conversion Schedules, the Initial Conversion SOFA the Amended Conversion Schedules, and the Amended Conversion SOFA Which Would Have Served as the Debtors’ Verification of the Accuracy of the Contents of these Documents
Related to Bankruptcy Rule 9011(b) is Bankruptcy Rule 1008, which requires that “[a]ll petitions, lists, schedules, statements, and amendments thereto shall be verified.... ” This means that debtors must sign the petition, Schedules, SOFA and any amendments to those documents as a means of not only authorizing the filing of those documents, but of verifying, under penalty of perjury, that they have reviewed the information contained therein and that it is true and correct to the best of their knowledge, information and belief. Briggs v. LaBarge (In re Phillips), 317 B.R. 518, 523 (8th Cir. BAP 2004); In re Wenk, 296 B.R. 719, 727 (Bankr.E.D.Va.2002). Attorneys, correspondingly, have “an affirmative duty to conduct a reasonable inquiry into the facts set forth in a debtor’s schedules [and] statement of financial affairs ... before filing them.” Lafayette v. Collins, 405 B.R. 505, 512 (1st Cir. BAP 2009). As a part of this reasonable inquiry, the attor *779 ney should sit down in person with his client and carefully review all Schedules, the SOFA, and any other documents to be filed with the court to ensure that all of the representations set forth therein are true and accurate. In re Stomberg, 487 B.R. at 815; In re Nguyen, 447 B.R. 268, 282-83 (9th Cir. BAP 2011); 20 In re Tran, 427 B.R. 805, 809-10 (Bankr.N.D.Cal. 2010); see also In re Daw, No. 09-00690-TLM, 2011 WL 231362 , at *6 n. 14 (Bankr.D.Idaho Jan. 24, 2011).
The verification requirement under Bankruptcy Rule 1008 relates to Bankruptcy Rule 9011(b) because, by failing to obtain the debtor’s verification as to the accuracy of the documents he files, an attorney falsely represents to the court that “the allegations and other factual contentions have evidentiary support.” Fed. R. Bankr.P. 9011(b)(3); In re Josephson, No. 04-60004-13, 2008 WL 113861 , at *6 (Bankr.D.Mont. Jan. 9, 2008); see also In re Phillips, 317 B.R. at 524 (“[T]he petition [the attorney] filed did not have the debt- or’s original signature and therefore lacked a verification of the facts. With no verification, the factual contentions have no evidentiary support and thus the petition violates Bankruptcy Rule 9011(b)(3).”).
In the case at bar, Aduwa did not personally meet with either of the Debtors to verify their desire to convert their case from Chapter 13 to Chapter 7 prior to Aduwa’s filing of the Notice of Conversion on December 17, 2012. [Finding of Fact No. 25(d) ]. Further, Aduwa never met with either of the Debtors before instructing Gutierrez to file the Initial Conversion Schedules and the Initial Conversion SOFA on January 4, 2013, [Finding of Fact No. 32(a) ], or the Amended Conversion Schedules and the Amended Conversion SOFA on January 7, 2013, [Finding of Fact No. 35(a) ]. Aduwa attributes these failures to the backlog of cases that piled up during the two weeks that he was out of office at the end of 2012. [Finding of Fact No. 53]. While this Court realizes that even attorneys need, and are entitled to, a vacation, absence from the office or a busy schedule is no excuse for failing to fulfill a fundamental duty owed to the client and the Court. Regardless of the circumstances, no changes are to be made to Schedules or a SOFA without the debt- or expressly signing off. In re Stomberg, 487 B.R. at 816. Not only did this not happen here, but Aduwa is directly responsible for this failure.
Aduwa knowingly and repeatedly allowed the filing of documents for which he did not obtain&emdash;and never has obtained&emdash; the Debtors’ authorization, their “wet” signatures, or their verification of the accuracy of the facts within. [Finding of Fact Nos. 25(a), 32(b), 35(b) ]. Indeed, had Aduwa obtained the Debtors’ signatures, he would have satisfied the requirements for both authorization and verification. See In re Stomberg, 487 B.R. at 807 (quoting In re Phillips, 317 B.R. at 523 ). Here, however, the Debtors never verified the accuracy of the information contained in the Initial Conversion Schedules, the Initial Conversion SOFA, the Amended Conversion Schedules, or the Amended Conversion SOFA. [Finding of Fact Nos. 32(a), 35(a) ]. In fact, Aduwa directed Gutierrez to prepare and file these documents with *780 out any input from the Debtors. [Finding of Fact Nos. 32, 35]. Further, the Debtors never even authorized Aduwa to file the Amended Conversion Schedules and the Amended Conversion SOFA. [Finding of Fact No. 35(c) ]. Obtaining the Debtors’ signatures would have satisfied the requirements for both authorization and verification necessary before filing documents on their behalf. See In re Stomberg, 487 B.R. at 807 (quoting In re Phillips, 317 B.R. at 523 ).
Additionally, this Court reaffirms its agreement with the court in Phillips that there are no circumstances that would ever justify an attorney filing a petition, any Schedule, or a SOFA without first obtaining the debtor’s signature, “regardless of how urgent the need may appear to be.” In re Phillips, 317 B.R. at 521 (refusing to accept attorney’s excuse that filing petition without first obtaining the debtor’s signature was necessary to prevent a foreclosure sale of the debtor’s home). Therefore, in the case at bar, it is immaterial that the deadline for filing the Initial Conversion Schedules and the Initial Conversion SOFA was fast approaching or already had passed. [Finding of Fact No. 28]. No circumstances excuse Aduwa from obtaining the Debtors’ “wet” signatures on-and their authorization for filing-the Initial Conversion Schedules or the Initial Conversion SOFA. Without the Debtors’ signatures to verify that the information on the Notice of Conversion, the Initial Conversion Schedules, the Initial Conversion SOFA, the Amended Conversion Schedules, and the Amended Conversion SOFA (the Defective Pleadings) was correct, “the factual contentions have no evidentiary support.” In re Phillips, 317 B.R. at 524 . By directing Gutierrez-the assistant whom he supervises-to file the Notice of Conversion on December 17, 2013, the Initial Conversion Schedules and the Initial Conversion SOFA on January 4, and the Amended Conversion Schedules and the Amended Conversion SOFA January 7, 2013, without the Debtors’ signatures, Aduwa violated Bankruptcy Rule 9011(b)(3).
2. Aduwa Violated Bankruptcy Rule 9011(b)(1) and (2) by Instructing Gutierrez to Forge the Debtors’ Electronic Signatures on the Defective Pleadings
As this Court has also made clear in Stomberg, electronically filing a document that purports to have the debtor’s signature but which was not, in fact, signed by the debtor is no different than physically forging the debtor’s signature on a paper document. In re Stomberg, 487 B.R. at 808 (citing In re Wenk, 296 B.R. at 725 ). Indeed, multiple courts have found that “electronically filing a document bearing an electronic signature that was not actually or validly signed” constitutes a forgery amounting to a Rule 9011 violation. See In re Phillips, 317 B.R. at 523-24 (upholding sanctions awarded where debtor’s counsel violated Bankruptcy Rule 9011(b) by forging debtor’s electronic signature on bankruptcy petition); see also In re Flowers, No. 12-40290-CEC, 2012 WL 987298 , at *7 (Bankr.E.D.N.Y. Mar. 22, 2012) (finding that an attorney violated Rule 9011(b) by forging the electronic signature of debtor’s counsel on bankruptcy petitions and other documents); In re Josephson, 2008 WL 113861 , at *7 (granting trustee’s request for sanctions where counsel violated 9011(b) by forging debtors’ electronic signatures on addendum to Chapter 13 plan); In re Alvarado, 363 B.R. 484, 492 (Bankr.E.D.Va.2007) (finding that sanctions were appropriate for attorney who forged debtor’s electronic signature on bankruptcy petition, thereby violating Rule 9011(b)); In re Wenk, 296 B.R. at 728 (finding that counsel who forged debtor’s electronic signature on petition violated Bankruptcy Rule 9011(b)).
*781 Here, Aduwa allowed — and indeed, instructed — Gutierrez to electronically file the Defective Pleadings representing that the Debtors had signed these documents with an “/s/”, when in fact they had not. [Finding of Fact Nos. 31, 34]. By authorizing the filing of the Defective Pleadings with forged electronic signatures, Aduwa violated Bankruptcy Rule 9011(b); he simply could not have believed that filing these documents with forged signatures was proper or warranted under existing law or a good faith argument. See Fed. R. Bankr.P. 9011(b)(1), (2).
3. Sanctions are Appropriate Under Rule 9011(c) for Violations of Rule 9011(b)
An attorney who violates Bankruptcy Rule 9011(b) may be sanctioned pursuant to Bankruptcy Rule 9011(c). See Triad Financial Corp. v. Peake (In re Nair), 202 Fed.Appx. 765, 766 (5th Cir.2006) (reviewing the bankruptcy court’s imposition of sanctions under Bankruptcy Rule 9011(c) for a 9011(b) violation and finding that the bankruptcy court did not abuse its discretion); In re Flowers, 2012 WL 987298 , at *7. Section (c) provides that “if, after notice and a reasonable opportunity to respond, the court determines that subdivision (b) has been violated, the court may, subject to the conditions stated below, impose an appropriate sanction upon the attorneys, law firms, or parties that violated subsection (b) or are responsible for the violation.” Fed. R. Bankr.P. 9011(c). Any party may file a motion for sanctions under Bankruptcy Rule 9011(c), or pursuant to Bankruptcy Rule 9011(c)(1)(B), “on its own initiative, the court may enter an order describing the specific conduct that appears to violate subdivision (b) and directing an attorney ... to show cause why it has not violated subsection (b) with respect thereto.” Fed. R. Bankr.P. 9011(c)(1)(B).
In this case, the Chapter 7 Trustee filed the Motion. [Finding of Fact No. 57]. This Court, acting on the information in the Motion and on the basis of the March 7, 2013 hearing on the Motion, issued the SCO on March 15, 2013. [Finding of Fact No. 62]. The SCO required Aduwa, Macey, Aleman, the Firm, and Gutierrez to show cause why they should not be sanctioned for the following: (1) filing Schedules and SOFA with forged signatures; (2) filing Schedules and SOFA without an attorney from the Firm personally meeting with the Debtors to review these documents for their accuracy; (3) allowing Gutierrez, a legal assistant, to practice law; (4) failing to have face-to-face communications with the Debtors by the attorney-in-charge of the file; (5) failing to prepare the Debtors for the meeting of creditors; (6) not appearing at the meeting of the creditors to represent the Debtors; (7) sending Carter, an uninformed appearance attorney, to the meeting of the creditors to represent the Debtors; (8) misrepresenting to the Court in a Rule 2016 Disclosure — [Doc. No. 77] — the amount of money paid by the Debtors for prosecution of the Chapter 13 case; and (9) misrepresenting to the Court in a Rule 2016 Disclosure — [Doc. No. 121] — the amount of money paid by the Debtors for prosecution of the case after conversion to Chapter 7. [Finding of Fact No. 62], Aduwa was given ample opportunity to respond to these allegations by adducing testimony and introducing exhibits in the hearings that were held on the Motion and the SCO, as well as by filing any necessary responses. As set forth above, this Court has concluded that the allegations asserted in the SCO are true, and Aduwa has failed to demonstrate that he should not be sanctioned for this conduct. Thus, as Aduwa’s conduct violated Bankruptcy Rule 9011(b); and, as he had notice and ample opportunity to respond, sanctions are appropriate under Bankruptcy Rule 9011(c). The form *782 and extent of these sanctions will be discussed subsequently in a separate section of this Opinion.
C. Aduwa Violated Bankruptcy Rule 5005(a)(2) and Applicable Local Bankruptcy Rules for Electronically Filing Documents with the Court
Bankruptcy Rule 5005(a)(2) authorizes electronic filing and provides that:
A court may by local rule permit or require documents to be filed, signed or verified by electronic means that are consistent with technical standards, if any that the Judicial Conference of the United States established. A local rule may require filing by electronic means only if reasonable exceptions are allowed. A document filed by electronic means in compliance with a local rule constitutes a written paper for the purpose of applying these rules, the Federal Rules of Civil Procedure made applicable by these rules, and § 107 of the Code.
Fed. R. Bankr.P. 5005(a)(2).
In the Southern District of Texas, the relevant Local Bankruptcy Rules, which implement electronic filing, are 5005-1 and 1001-1. Local Bankruptcy Rule 5005-1 governs the “Filing of Papers” and states, in pertinent part: “The Texas statewide procedures for electronic filing are adopted by this court and are published on this Court’s website,” and “Except as expressly provided or unless permitted by the presiding Judge, the Court requires documents being filed to be submitted, signed or verified by electronic means that comply with the procedure established by the Court.” Local Bankruptcy Rule 1001-l(b) provides: “In addition to these rules ... the Administrative Procedures for CM/ECF ... govern practice in the bankruptcy court.” Thus, these Local Bankruptcy Rules, when taken together, require compliance with “procedures established by the court” — specifically, “the Administrative Procedures for CM/ECF.” S.D. Tex. Local R. Bankr.P. 1001-l(b), 5005-l(b).
The Administrative Procedures for Electronic Filing, which the Local Bankruptcy Rules reference, control electronic filings in this Court. Section III of the Administrative Procedures for Electronic Filing, entitled “Electronic Filing and Service of Documents,” part B, paragraph 1 spells out signature requirements: “A document filed by electronic means shall either (1) contain a scanned image of any manual signature or an electronic signature affixed thereto; or (2) display an ‘/s/’ with the name typed in the location the signature would otherwise appear.” With respect to this particular requirement, it is clear that Aduwa complied: the documents filed on December 17, 2012, January 4, 2013, and January 7, 2013, do, indeed, contain an electronic signature “/s/” next to both Adu-wa’s name and the Debtors’ names. [Finding of Facts Nos. 25, 31, 34]. Aduwa did not, however, comply with section III, part B, paragraph 3 of the Administrative Procedures for Electronic Filing, which states:
Within five (5) business days of the filing by electronic means of a bankruptcy petition, list, schedule, or statement that requires verification or an unsworn declaration under Fed. R. Bankr.P. 1008, the Electronic Filer shall tender to the court in paper format the appropriate “Declaration for Electronic Filing” substantially conforming either to Exhibit ‘B-l,’ ‘B-2,’ or ‘B-3,’ 21 which has been *783 executed by any individual debtor or by the authorized representative of any corporate or partnership debtor. Such Declaration shall be thereafter maintained by the Clerk of the Authorizing Court in paper format.
Aduwa never obtained the Debtors’ signatures on the Declaration for Electronic Filing, nor did he tender this document to the Court. Therefore, Aduwa failed to comply with paragraph 3.
Aduwa also violated section III, part B, paragraph 4 of the Administrative Procedures for Electronic Filing. This paragraph, entitled “Retention of Documents with Third-Party Signatures,” sets forth:
Except as otherwise set forth in this Appendix, or as otherwise ordered by the Authorizing Court, documents which contain the original signature of any party other than the Electronic Filer, other than a Declaration for Electronic Filing as referenced above, shall be retained by the Electronic Filer for a period of not less than five (5) years after the case of adversary proceeding is closed, and upon request, such original document must be provided to the court of other parties for review.
Because Aduwa never obtained the Debtors’ “wet” signatures on the Notice of Conversion, filed on December 17, 2012, or on the Initial Conversion Schedules and the Initial Conversion SOFA filed on January 4, 2013, or on the Amended Conversion Schedules and the Amended Conversion SOFA filed on January 7, 2013, he did not, and could not, comply with paragraph 4 of part B.
Aduwa’s failure to comply with paragraphs 3 and 4 of section III, part B of the Administrative Procedures for Electronic Filing means that he has never been in compliance with “the Administrative Procedures for CM/ECF”; and, in turn, Aduwa has never been in compliance with the “procedure established by the Court” for documents being filed by electronic means. S.D. Tex. Local Bankr.R. 1001-1(b), 5005-l(b). Thus, Aduwa has violated the specific Local Bankruptcy Rules governing electronic filing of documents. Further, because he violated the above-referenced Local Bankruptcy Rules, Adu-wa also violated Bankruptcy Rule 5005(a)(2), which requires that documents be filed in accordance with local rules. Fed. R. Bankr.P. 5005(a)(2). Thus, sanctions are appropriate, and the form and extent of these sanctions will be subsequently discussed in this Opinion.
D. Aduwa Violated Guidelines for Professional Conduct A, B & D of Appendix D of the Local District Rules 22
All practicing attorneys owe a fundamental duty of professional responsibility to their clients, the judiciary, opposing counsel, and the administration of justice. See S.D. Tex. Local R., Appendix D. Guidelines for Professional Conduct. These duties, which are articulated in the Guidelines for Professional Conduct, encompass three areas relevant to the circumstances at hand. First, Guideline A requires that attorneys remain conscious of the broader duties owed to the judicial *784 system in fulfilling their primary duties to their clients. Second, Guideline B provides that lawyers owe the duties of candor, diligence and utmost respect to the judiciary. Finally, Guideline D states that lawyers owe fundamental duties of personal dignity and professional integrity to the administration of justice. Aduwa’s conduct, including (1) his failure to meet face-to-face with his clients (i.e., the Debtors) before preparing the Defective Pleadings; (2) his filing of the Defective Pleadings (through instructions to his assistant, Gutierrez) with forged electronic signatures [Finding of Fact Nos. 25, 31, 34]; and (3) his failure to disclose to this Court that he had not obtained and maintained possession of the Debtors’ original “wet” signatures, violated these professional standards. 23
1. Aduwa’s Violations of Guideline A of the Guidelines for Professional Conduct
Guideline A provides that “[i]n fulfilling his or her primary duty to the client, a lawyer must be ever conscious of the broader duty to the judicial system that serves both the attorney and the client.” Aduwa breached the duties he owed to his clients (i.e., the Debtors) by failing to meet with them in person to review the Defective Pleadings prior to filing these documents. He also breached his duties to his clients and to the legal system when he allowed his legal assistant, Gutierrez, to handle aspects of the Debtors’ case. Specifically, these were areas in which he, as the Debtors’ attorney, should have been personally involved. For instance, Gutierrez prepared and filed the Notice of Conversion and the Amended Conversion Schedules, which Aduwa never reviewed. 24 [Finding of Fact Nos. 25(c), 35(a), 36]. Finally, by sending an appearance attorney (i.e., Carter) to represent the Debtors at the meetings of creditors on January 8, and January 22, 2013, Aduwa further breached his duty. 25
The Defective Pleadings were, at least initially, filled out entirely by Aduwa’s legal assistant, Gutierrez. [Finding of Fact Nos. 25, 30, 33]. Gutierrez is not a licensed attorney and should not have been preparing legal documents — particular!y those to be signed under oath by the Debt *785 ors&emdash;without direct oversight from Aduwa. Aduwa needed to review her drafts of the Defective Pleadings prior to those documents being filed.
Gutierrez-at Aduwa’s direction-was improperly engaged in the practice of law by (a) giving legal advice to the Debtors about the necessity of converting their case to Chapter 7 to prevent the Chapter 13 case from being dismissed [Tape Recording, Apr. 26, 2013 Hearing at 11:58:19-11:59:39 a.m.]; and (b) unilaterally preparing and filing the Notice of Conversion, Initial Conversion Schedules, Initial Conversion SOFA, Amended Conversion Schedules, and Amended Conversion SOFA with this Court.
This Court recognizes the fundamental role that legal assistants play in assisting bankruptcy attorneys, particularly by collecting financial information from debtors, but there is an inherent difference between a legal assistant and a bankruptcy attorney. Bankruptcy attorneys aid their clients by using their expertise in bankruptcy law to give legal advice. On the other hand, legal assistants may not counsel, warn, or ensure a debtor’s compliance with bankruptcy law. In re Stomberg, 487 B.R. at 812-13; see In re Pinkins, 213 B.R. 818, 820-21 (Bankr.E.D.Mich.1997) (listing twelve (12) activities that constitute the practice of law, and sanctioning a firm that allowed legal assistants to advise debtors on a variety of bankruptcy related issues, including when to file cases, which Chapter to file under, and the filling out of Schedules). In re Guttierez, 248 B.R. 287, 295 (Bankr.W.D.Tex.2000) (“[G]iving advice regarding bankruptcy matters of necessity constitutes the practice of law.”). Further, a legal assistant cannot be utilized as a stand-in for an absent attorney, and may not prepare and file documents which are unreviewed by an attorney; rather, legal assistants are charged with mere transposition of a debtor’s information onto the Schedules and Statement of Financial Affairs for review by the attorney. In re Stomberg, 487 B.R. at 812.
Aduwa further breached the duties he owed to the Debtors and the Court by sending an unprepared appearance attorney, Carter, to the January 8, and January 22, 2013 creditors’ meetings. [Finding of Fact Nos. 38, 53]. There are a variety of inherent problems that arise when an appearance attorney is utilized, including the lack of notice debtors have as to who will represent them at any given proceeding. See In re Bernhardt, No. 06-10626 MER, 2012 WL 646150 , at *5 (Bankr.D.Colo. Feb. 28, 2012). In this case, the Debtors not only had no notice that Carter was to represent them at their meeting of creditors, but Aduwa did not prepare Carter properly. 26 [Id.]. Carter was unprepared to advise Ms. Bradley when she discovered the inaccuracies in the Amended Conversion Schedules and the Amended Conversion SOFA. Sending an ill-prepared attorney in one’s place for any reason is unwarranted.
Not only did Aduwa send Carter unprepared to the January 8, 2013 creditors’ meeting; he also sent him unprepared to the continued creditors’ meeting held on January 22, 2013. [Finding of Fact Nos. 38, 53]. The January 22 meeting was held because of the inaccuracies Ms. Bradley discovered in the Amended Conversion Schedules and the Amended Conversion SOFA during the January 8 meeting. Aduwa claims that he was ill on January 22, 2013; however, given the circumstances, this is no excuse for once again sending an unprepared appearance attor *786 ney to represent the Debtors. Given the seriousness of the incorrect Amended Conversion Schedules and the Amended Conversion SOFA, Aduwa should have considered the continued creditors’ meeting an extreme priority, deserving of his utmost attention. Instead of simply deciding to dispatch an unprepared appearance attorney when he fell ill, Aduwa should have filed a very short motion for continuance and called the Trustee to alert him to the situation. An attorney-in-charge, sending an unprepared appearance attorney rather than appearing himself at a meeting of creditors, or any hearing, fails in his duty to both the client and the judicial system.
In sum, Aduwa violated Guideline A of the Guidelines for Professional Conduct.
2. Aduwa’s Violations of Guideline B of the Guidelines for Professional Conduct
Guideline B provides that “[a] lawyer owes, to the judiciary, candor, diligence and utmost respect.” By falsely representing that the Debtors had signed the Defective Pleadings, Aduwa showed that he was not diligent in his work, and was incredibly disrespectful of the judiciary and the bankruptcy process. Further, Aduwa violated his duty of candor by not informing the Court that he did not have the Debtors’ “wet” signatures on each of these same five documents.
As attorney-in-charge for the Debtors, Aduwa is an officer of this Court and is bound by fiduciary standards. See ICM Notes, Ltd. v. Andrews Kurth, LLP, 278 B.R. 117, 123 (S.D.Tex.2002) (citing Brown v. Gerdes, 321 U.S. 178, 182 , 64 S.Ct. 487 , 88 L.Ed. 659 (1944)); see also In re Alvarado, 363 B.R. at 489-90 (“As officers of the court, attorneys have a special responsibility for upholding the quality of justice within the judicial process.”). Though he admitted his misconduct at the hearing on the SCO, see [Tape Recording, Apr. 26, 2013 Hearing at 10:35:21-10:48:08 a.m.], Aduwa did not admit his mistakes until after the Trustee brought the possibility of impropriety to the Court’s attention. Though he knew he did not have the Debtors’ “wet” signatures, Aduwa remained silent. By staying silent under these circumstances, Aduwa showed an utter lack of candor and respect.
Aduwa also showed a lack of diligence and respect to the Court by sending an unprepared appearance attorney (i.e., Carter) to represent the Debtors at the meetings of creditors held on January 8 and January 22, 2013. 27 As discussed above, appearance attorneys pose several problems for the courts as well as for debtors. Appearance attorneys can hinder the swift dispatch of a case, and the lack of a formal association raises questions about the ability and authority of appearance attorneys to speak for debtors. See In re Jacobson, *787 402 B.R. 359, 365 (Bankr.W.D.Wash.2009) (discussing the inherent problems that appearance attorneys pose to judicial economy and equitable outcomes for debtors). Such difficulties are exacerbated when, as here, an attorney-in-charge (i.e., Aduwa) completely fails to prepare his appearance attorney (i.e., Carter) for the meeting he will attend to represent the Debtors. This can result—and did in the case at bar—in needless continuances of meetings and lost time in hearings while an unprepared appearance attorney comes up to speed with the situation. Either way, sending an appearance attorney shows a great lack of respect for the Court’s time. Accordingly, Aduwa breached Guideline B by failing to treat the Court with candor and respect.
3. Aduwa’s Violations of Guideline D of the Guidelines for Professional Conduct
Finally, Guideline D provides that “[a] lawyer unquestionably owes, to the administration of justice, the fundamental duties of personal dignity and professional integrity.” Dignity 28 and integrity 29 are broad ideals, but both reflect the seriousness and moral esteem that an attorney must show to his client, the judicial system and other parties. Aduwa breached Guideline D in at least the following respects: (1) he filed the Defective Pleadings without obtaining the Debtors’ signatures, [Finding of Fact Nos. 25(a), 32(b), 35(b) ]; (2) he allowed his legal assistant (i.e., Gutierrez) to forge the Debtors’ original signatures on the Defective Pleadings, [Finding of Fact Nos. 25, 31, 32(b), 34]; (3) he instructed Gutierrez to file the Initial Conversion Schedules, the Initial Conversion SOFA, the Amended Conversion Schedules, and the Amended Conversion SOFA despite knowing that those documents contained inaccuracies or knowing that he had not checked to confirm that the information contained therein was entirely accurate, [Finding of Fact Nos. 32(c), 36]; (4) he failed to inform the Debtors that Carter would represent them at their meetings of creditors, [Finding of Fact No. 38(d) ]; (5) he did not prepare Carter for either of the Debtors’ meetings of creditors, [Finding of Fact Nos., 38, 53]; (6) he filed, or allowed to be filed, an incorrect Rule 2016 Disclosure, [Finding of Fact No. 37]; and (7) he failed to own up to these transgressions until after the Chapter 7 Trustee brought them to the attention of the Court. Each of these actions alone is cause for concern; taken together, they seriously undermine Aduwa’s personal integrity and professional reputation.
In sum, Aduwa has seriously violated the guidelines for professional conduct required of attorneys authorized to practice in the Southern District of Texas. Sanctions are therefore appropriate and will be subsequently discussed in this Opinion.
E. Aduwa Violated Local Bankruptcy Rule 1001-l(b) and Local District Rule 11.2 by Sending an Unprepared Appearance Attorney to the Meeting of Creditors
In addition to the provisions of Local Bankruptcy Rule 1001-l(b) outlined above, Local Bankruptcy Rule 1001-l(b) provides: “In addition to these rules, the Local Rules of the District Court ... govern practice in the bankruptcy court.” Looking to the Local District Rules, Rule 11.2 states: “The attorney-in-charge is re *788 sponsible in that action for the party. That individual attorney shall attend all court proceedings, or send a fully informed attorney with authority to bind the client.” (emphasis added).
Aduwa did not send a “fully informed attorney”; rather, he sent an unprepared appearance attorney to represent the Debtors at their creditors’ meetings on January 8, 2013 and January 22, 2013. [Finding of Fact Nos. 38(d), 53]. Carter’s presence at the January 22 meeting is especially egregious considering the inconsistencies in the Amended Conversion Schedules and the Amended Conversion SOFA that Ms. Bradley had discovered at the January 8 meeting. Aduwa thus let his clients go to the January 22 meeting knowing that they would be under oath and be falsely swearing to the accuracy of the Amended Conversion Schedules and the Amended Conversion SOFA. Moreover, Carter was contacted on extremely short notice before the January 22 meeting, and was utterly unprepared to represent the Debtors during that meeting. [Finding of Fact No. 53].
Sending an unprepared appearance attorney violates Local District Rule 11.2 and Local Bankruptcy Rule 1001-1(b). Bankruptcy Judge Wesley Steen (now retired) issued sanctions based on a similar violation of Local Bankruptcy Rule 1001-1(b). See In re Allen, No. 06-60121, 2007 WL 115182 , at *6 (Bankr.S.D.Tex. Jan. 9, 2007) (sanctioning a firm, in part, for sending unprepared local counsel to hearings). By sending Carter not once, but twice, to the meetings of creditors without adequately preparing him, Aduwa violated Local District Rule 11.2 and Local Bankruptcy Rule 1001 — 1(b). Sanctions are therefore appropriate and will subsequently discussed herein.
F. Aduwa Violated Bankruptcy Rule 2016 and 11 U.S.C. § 329 (a) by Filing an Inaccurate Rule 2016 Disclosure
The Bankruptcy Code requires an attorney to disclose the compensation received for handling a debtor’s case. The Bankruptcy Code, in relevant part, states:
Any attorney representing a debtor in a case under this title, or in connection with such a case, whether or not such attorney applies for compensation under this title, shall file with the court a statement of the compensation paid or agreed to be paid, if such payment or agreement was made after one year before the date of the filing of the petition, for services rendered or to be rendered in contemplation of or in connection with the case by such attorney, and the source of such compensation.
11 U.S.C. § 329 (a). Related to § 329, Bankruptcy Rule 2016 lays out the specific nature of the disclosure needed:
Every attorney for a debtor, whether or not the attorney applies for compensation, shall file and transmit to the United States trustee within 14 days after the order for relief, or at another time as the court may direct, the statement required by § 329 of the Code including whether the attorney has shared or agreed to share the compensation with any other entity. The statement shall include the particulars of any such sharing or agreement to share by the attorney, but the details of any agreement for the sharing of the compensation with a member or regular associate of the attorney’s law firm shall not be required. A supplemental statement shall be filed and transmitted to the United States trustee within 14 days after any payment or agreement not previously disclosed.
Fed. R. Bankr.P.2016.
Together, § 329(a) and Bankruptcy Rule 2016 require an attorney rep *789 resenting a debtor to disclose in a Rule 2016 Disclosure, exactly and accurately, the compensation that the attorney will receive in exchange for representing the debtor. Filing an inaccurate, incomplete, or false Rule 2016 Disclosure violates both Bankruptcy Rule 2016 and § 329(a), and is grounds for sanctions. See In re Johnson, 411 B.R. 296, 300 (Bankr.E.D.La.2008) (sanctioning an attorney, in part, for failing to amend the Rule 2016 Disclosure to reflect the compensation actually paid by the debtor); In re Zuniga, 332 B.R. 760, 783 (Bankr.S.D.Tex.2005) (holding that an incorrect Rule 2016 Disclosure is a false statement of material fact made to the court); In re Wright, 290 B.R. 146, 155-56 (Bankr.C.D.Cal.2003) (finding that full disclosure to the court is an absolute requirement of the bankruptcy process).
1. The Rule 2016 Disclosure Filed with the Conversion Falsely Listed the Compensation Paid by the Debtors
Here, the Debtors converted their case from a Chapter 13 case to a Chapter 7 case on December 17, 2012. [Finding of Fact No. 25]. As part of the conversion, the Initial Conversion Schedules and the Initial Conversion SOFA were filed with this Court on January 4, 2013. [Finding of Fact Nos. 30, 31]. A new Rule 2016 Disclosure&emdash;listing the amount paid to the Firm for converting the Debtors’ case from Chapter 13 to Chapter 7, and then taking on the representation, as $26.00&emdash; was also filed on January 4, 2013. [Finding of Fact No. 37]. However, the Firm did not receive just $26.00 for these tasks. In fact, it received payment of $524.00. [Id.]. And, while the Amended Conversion Schedules and the Amended Conversion SOFA were filed on January 7, 2013 [Finding of Fact No. 34], neither Aduwa nor the Firm has made any amendment to the incorrect Rule 2016 Disclosure.
2. The Rule 2016 Disclosure Was False Because It Did Not List Payments Made to Carter
When a lawyer wishes to share his fees with another practitioner in a bankruptcy setting, he must disclose the arrangement of the payments or fee sharing in the Rule 2016 disclosure. In re Wright, 290 B.R. at 155 . Indeed, bankruptcy courts have made it clear that any attorney who appears on behalf of a debtor must be listed on the Rule 2016 Disclosure, regardless of whether they will receive monetary compensation. See id. at 155 ; In re Bernhardt, 2012 WL 646150 , at *5 (“Rule 2016(b) also requires every attorney for a debtor, whether or not he or she applies for compensation, to file a statement under § 329.”); In re Johnson, 411 B.R. at 301 (holding that all attorneys that appear on behalf of a debtor must be disclosed on the Rule 2016 Disclosure).
Disclosure is also required where an attorney who is not part of firm representing the debtor-but who works on the case-receives compensation for his work. In re Johnson, 411 B.R. at 301 ; In re Wright, 290 B.R. at 155 . Further, disclosure is required even if the appearance attorney will only represent the debtor at a meeting of creditors. In re Johnson, 411 B.R. at 301 (citing In re Greer, 271 B.R. 426 (Bankr.D.Mass.2002)). Even if an attorney does not initially know whether he will utilize another attorney not employed at the same firm to represent his clients, the attorney&emdash;once he or she does decide to utilize an appearance attorney-must file an amended Rule 2016 Disclosure within the fourteen (14) day time frame mandated by Bankruptcy Rule 2016(b). Full disclosure is important because the court is not merely a bystander in bankruptcy cases. Rather, the court is an active participant throughout the pendency of a debtor’s case-particularly in circum *790 stances like the case at bar, where it is imperative that financially-strapped debtors are not taken advantage of by attorneys requesting that additional fees be paid. See Padilla v. GMAC Mortg. Corp. (In re Padilla), 389 B.R. 409, 429 (Bankr.E.D.Pa.2008) (finding that a bankruptcy court must play an active role in bankruptcy proceedings and that it has broad authority to act to prevent injustice and craft flexible remedies for both debtors and creditors); see also In re Wright, 290 B.R. at 155 (finding that full disclosure to the court is essential because it allows the court to craft the most equitable remedy, as well as to protect the integrity of the bankruptcy system).
Here — and in other cases where Carter is utilized by the Firm 30 — Carter is paid $100.00 for each appearance he makes at a meeting of creditors. [Finding of Fact No. 54], Carter also receives compensation for any court appearance at which he appears in place of Aduwa. [/<£]. In this case, Carter appeared at both the January 8, 2013, and the January 22, 2013, meetings of creditors in Aduwa’s stead. [Finding of Fact Nos. 39, 56]. Thus, Carter should have received $200.00 for appearing at these meetings; however, Carter is not listed on any of the Rule 2016 Disclosures, and neither has he filed his own Rule 2106 Disclosure with this Court. [Doc. No. 121 at 31]. Numerous cases make it clear that all attorneys who appear on behalf of the Debtor, regardless of their capacity, must be disclosed to the Court pursuant to Bankruptcy Rule 2016(b). See, e.g., In re Wright, 290 B.R. at 155 . By not amending the Rule 2016 Disclosure within fourteen days of Carter appearing at either of the meetings of creditors— indeed, by never amending the Rule 2016 Disclosure — Aduwa violated Bankruptcy Rule 2016(b). Sanctions against him are therefore appropriate and will be subsequently discussed in this Opinion.
G. Sanctions Will Also Be Imposed Against Macey, Aleman, and the Firm because Aduwa’s Actions Are Imputed to Them
Aside from Aduwa, the Firm itself may also be sanctioned for violations of Bankruptcy Rule 2016 and § 329. See *791 In re Harwell, 439 B.R. 455, 459-60 (Bankr.W.D.Mich.2010) (sanctioning the Firm for filing an inaccurate Rule 2016 Disclosure with the court); In re Wright, 290 B.R. at 155-56 (sanctioning a law firm for failing to disclose an appearance attorney pursuant to Bankruptcy Rule 2016(b)). Where an attorney violates local rules, courts may also sanction the firm he works for, because the actions of employee-attorneys are imputed to their firm. See In re Parsley, 384 B.R. 138, 159 (Bankr.S.D.Tex. 2008) (citing Religious Tech. Ctr. v. Liebreich, 98 Fed.Appx. 979 , 988 n. 30 (5th Cir.2004)). Additionally, where, as here, an attorney acts in bad faith, his bad faith conduct is imputed to the firm that employs him or her. See In re Parsley, 384 B.R. at 182-83 (finding that imputing responsibility onto a firm is both correct as a matter of law, and also appropriate so as to impose responsibility on the firm for the actions of a subordinate attorney). Here, as Aduwa manages the Firm’s Houston office [Finding of Fact No. 19], as an employee, his actions, as well as his systemic bad faith, may be imputed to the Firm. 31 See Religious Tech. Ctr. v. Liebreich, 98 Fed.Appx. at 988 n. 30 (imposing sanctions under 28 U.S.C. § 1927 jointly and severally against attorneys and their law firm); Worrell v. GreatSchools, Inc., No. H-07-1100, 2007 WL 4223234 , at *3 (S.D.Tex. Nov. 28, 2007) (imposing sanctions under Fed.R.Civ.P. 11 jointly and severally against an attorney and his firm).
Moreover, Macey and Aleman, individually, may be sanctioned for Aduwa’s actions. Knowledge and actions are said to be imputed to all members of a firm; Macey and Aleman, as managing partners, are therefore charged with Aduwa’s knowledge and actions. See In re DePugh, 409 B.R. 125, 141 (Bankr.S.D.Tex.2009); In re Anderson, 330 B.R. 180, 187 (Bankr.S.D.Tex.2005) (finding that knowledge and actions impute from one attorney at a firm to all other attorneys with whom they work). Partners at firms are further charged with knowing about the misdeeds and ill preparedness of the attorneys that they employ and supposedly supervise. See In re Parsley, 384 B.R. at 182 . Therefore, it is appropriate for this Court to sanction Macey and Aleman, individually, as the partners responsible for supervising Aduwa and Gutierrez, in the hope that it will induce them to correct the systemic problems within the Firm.
H. Who Will Be Sanctioned, and What Rule or Statute Governs Each Sanction
1. Sanctions Will Be Imposed Under Bankruptcy Rule 9011(c) against Aduwa, the Firm, Macey, and Ale-man
Bankruptcy Rule 9011(c) provides specific authority for this Court to sanction attorneys for violations of Bankruptcy Rule 9011(b). As discussed previously in section B, subsection 3, this Court has the authority to impose sanctions under 9011(c), as Aduwa, Macey, Aleman, Gutierrez, and the Firm received notice (via the SCO) and had a reasonable opportunity to respond to the allegations contained therein. Bankruptcy Rule 9011(c) also gives this Court wide latitude in imposing sanctions, which may include both non-monetary and monetary sanctions. In re Wenk, 296 B.R. at 728 ; see also In re Yorkshire, LLC, 540 F.3d at 333 (upholding the bankruptcy court’s imposition of attorney’s fees for a violation of Bankruptcy Rule 9011(b)); BFG Investments, L.L.C. v. Texas State Bank (In re TByrd Enterprises, L.L.C.), No. 06-30078-H1-11, 2007 WL *792 4241705 , at *7 (Bankr.S.D.Tex.2007) (“[Bankruptcy] Rule 9011 sanctions may be imposed to deter conduct and may be payable to the court.”).
First, this Court has the power to impose sanctions on Aduwa. He is the attorney who violated the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy Rules, and the Local District Rules by directing the Firm’s legal assistant (i.e., Gutierrez) to file the unsigned and unreviewed Defective Pleadings as well as the false Rule 2016 Disclosure. Further, this Court has the power to sanction the Firm, Aduwa’s employer, as well as Macey and Aleman. As quoted above, Bankruptcy Rule 9011(c) states that the Court may “impose an appropriate sanction upon the attorneys, law firms, or parties that have violated subdivision (b) or are responsible for the violation.” Fed. R. Bankr.P. 9011 (emphasis added). Bankruptcy Rule 9011(c) thus includes the Firm as a party that the Court may sanction for violations of 9011(b). See In re Allen, 2007 WL 115182 , at *5-6 (sanctioning the debt- or’s law firm under Rule 9011(c) for filing incorrect and untrue pleadings with the court). Rule 9011(c) also permits this Court to sanction those who are responsible for the violation, thereby allowing this Court to sanction the Firm’s managing partners: Macey and Aleman. This, the Court will do.
2. Sanctions Will Be Imposed Under Bankruptcy Rule 2016 and § 329 against Aleman, the Firm, Macey, and Aleman
As discussed above, § 329(a) requires a full and accurate disclosure of the compensation and fees paid to attorneys who represent debtors. Bankruptcy Rule 2016 provides for the procedural rules that must be followed to satisfy § 329, including the timeline for filing amended disclosures and who must appear on those disclosure forms. Attorneys and firms that file incorrect or incomplete Rule 2016 Disclosures, or who fail to amend their Rule 2016 Disclosures as necessary, may be sanctioned. See In re Bernhardt, 2012 WL 646150 , at *6; In re Johnson, 411 B.R. at 303 (imposing sanctions for violating both 11 U.S.C. § 329 and Rule 2016). Further, courts have the ability under § 329(b) to require a debtor’s counsel to remit fees to the debtor “[i]f such compensation exceeds the reasonable value of any such services....” 11 U.S.C. § 329 (b). Courts may therefore determine whether the fees were excessive, and if such a finding is made, a court may order the disgorgement of those fees.
Here, Aduwa filed a false statement of disclosure, and therefore he is liable. Moreover, the Firm, Macey, and Aleman are also liable as a result of Adu-wa’s actions being imputed to them. However, because the Firm, after the issuance of the SCO, returned to the Debtors the $524.00 that it took as a fee for handling the Chapter 7 case, [Finding of Fact No. 63], the issue of whether the fees should be disgorged has become moot. 32
3. Sanctions Will Be Imposed Under § 105(a) and this Court’s Inherent Powers against Aduwa, Gutierrez, the Firm, Macey, and Aleman
Courts have the inherent power to sanction bad faith conduct. See *793 Chambers, 501 U.S. at 50-51 , 111 S.Ct. 2128 . Additionally, this Court has the power to sanction pursuant to § 105 of the Code. Under § 105, the Court may issue any order that is “necessary or appropriate to carry out the provisions [of the Bankruptcy Code] or to prevent an abuse of process.” 11 U.S.C. § 105 (a). Section 105 does not exist merely as a redundant statutory provision to address behavior sanctionable by other statutory provisions and rules. Rather, § 105 is meant to “fill in the interstices” that Rules such as 9011(c) do not fill. See Chambers, 501 U.S. at 33, 46-47 , 111 S.Ct. 2123 (“[O]ther [sanction] mechanisms, taken alone or together, are not substitutes for the inherent power, for that power is both broader and narrower than other means of imposing sanctions.... [W]hereas each of the other [sanction] mechanisms reaches only certain individuals or conduct, the inherent power extends to a full range of litigation abuses. At the very least, the inherent power must continue to exist to fill in the interstices. Even Justice Kennedy’s dissent so concedes.”) (emphasis added).
The Fifth Circuit has held that the imposition of sanctions using § 105 as well as the inherent power of the Court must be accompanied by a specific finding of bad faith. In re Yorkshire, LLC, 540 F.3d at 332 ; Goldin v. Bartholow, 166 F.3d 710, 722 (5th Cir.1999); In re Paige, 365 B.R. 632, 638 (Bankr.N.D.Tex.2007). In effect, this Court must find that the “very temple of justice has been defiled” by each party’s conduct. Goldin, 166 F.3d at 722 ; Cadle Co. v. Brunswick Homes, LLC (In re Moore), 470 B.R. 414, 417, 436 (Bankr.N.D.Tex.2012).
In the case at bar, Aduwa’s transgressions eclipsed the narrow confines of Bankruptcy Rules 9011 and 2016(b), resulting also in violations of Bankruptcy Rule 5005(a)(2) (for improper electronic filing of the Debtors’ Defective Pleadings with the Court) and Local Rules 5005-1 and 1001-1 (for improper electronic filing of the Debtors’ same documents with the Court). The Court may therefore employ § 105 to sanction such misconduct.
It is clear that for the reasons stated above, Aduwa’s actions have defiled the very temple of justice, and were in bad faith. If instructing one’s legal assistant (not once, but twice) to forge clients’ signatures on the Schedules and the Statements of Financial Affairs that the attorney knows to be inaccurate&emdash;and then to file them&emdash;does not constitute bad faith, then nothing does. Further, Aduwa’s failure to personally meet with the Debtors to review the accuracy of Schedules and SOFA is bad faith, especially where&emdash;as here&emdash; the failure occurs more than once and puts the Debtors in the position of giving false testimony under oath. See, e.g., In re Nguyen, 447 B.R. at 282 (upholding an imposition of sanctions under Bankruptcy Rule 9011(c) and § 105 that required an attorney to physically meet with clients for at least one hour to ensure that assets and debts would be discovered and properly scheduled). Moreover, Aduwa’s failure to maintain communication with the Debtors and not alert them that a different attorney&emdash;not employed by the Firm and not licensed by the State of Texas&emdash;would be representing them at the meeting of creditors is also bad faith. Under all of these circumstances, the Court concludes that pursuant to § 105(a), sanctions should be imposed against Aduwa for his bad faith violations.☺
Gutierrez also acted in bad faith with regard to filing the Defective Pleadings. She knowingly prepared and filed these documents without the Debtors’ review. [Finding of Fact Nos. 25(a), 32(a), 35(a) ]. Furthermore, Gutierrez has given inconsistent and contradictory accounts of the actions leading up to and immediately *794 following the filing of these papers with the Court. [Finding of Fact Nos. 29, 69]. Like Aduwa, her immediate supervisor, this Court finds that Gutierrez acted in bad faith when she prepared and filed the Defective Pleadings. As an experienced legal assistant, Gutierrez knew that forging the Debtors’ signatures and then filing the documents was dead wrong. Once again, if forgery by a seasoned legal assistant is not bad faith, then nothing is. Sanctions are in order for Gutierrez.
Additionally, this Court may, and will, impose sanctions against the Firm for these transgressions of Aduwa and Gutierrez. Law firms are often called to account for the actions of their attorneys and legal assistants, as all firms owe a duty to adequately train and supervise the attorneys and legal assistants working for them. See In re Parsley, 384 B.R. at 177 (finding that firms have an affirmative duty to train and supervise the attorneys working for them, but declining to impose sanctions against the firm because of the remedial measures already proposed by the firm); In re Moffett, No. 10-71929, 2012 WL 693362 , at *6-8 (Bankr.C.D.Ill. March 2, 2012) (sanctioning a firm for failing to supervise clerical staff). Further, courts may use their inherent sanctioning powers to sanction attorneys and firms for violations of local rules. See In re Hessinger & Associates, 192 B.R. 211, 223 (N.D.Cal.1996) (affirming the bankruptcy court’s imposition of sanctions for violations of local rules). The Firm employs both Aduwa and Gutierrez, and their bad acts are imputed to the Firm. Additionally, the numerous sanctions proceedings that the Firm has been subject to in recent years support this Court’s finding of bad faith on the part of the Firm.
4. The Effect of Past Misconduct on the Imposition of Sanctions Now Imposed by this Court
Neither Aduwa nor Gutierrez have ever been sanctioned in their careers, and the Court will certainly give this fact consideration in imposing sanctions on them (discussed subsequently herein).
This is the first time Aduwa and Gutierrez have been subject to sanctions, however, it is not the first time the Firm has run afoul of the rules governing proper and fair bankruptcy practice. The Firm, which is clearly what is known in the consumer bankruptcy practice as a “mill” firm, 33 has been sanctioned in the past. In fact, this Court has found at least five cases since 2009 where the Firm was sanctioned for some aspect of its representation of a debtor. This is also the second time the Firm has been sanctioned, and the third the Firm has been subject to a Show Cause order in this Court since 2010. *795 In considering the sanctions to impose on the Firm, this Court must obviously focus on the egregiousness of the conduct set out in the SCO in the case at bar. Yet, also relevant to this Court’s determination of appropriate sanctions is whether the conduct at issue was an isolated incident or part of a consistent pattern of activity. In re Stomberg, 487 B.R. at 818; In re Allen, 2007 WL 1747018 , at *2; see also In re Batiste, No. 03-10398, 2009 WL 2849077 , at *4 (Bankr.E.D.La. July 14, 2009) (finding sanctions appropriate, in part, because of the past abuses of the bankruptcy system); In re Layer, No. 06-306, 2007 WL 2229624 , at *11 (Bankr.N.D.Tex. July 31, 2007) (“prior sanctions levied by this court ... have apparently had little effect such that the court must be creative and more stringent in imposing sanctions so that they will, this time, have the appropriate coercive effect”); In re Porcheddu, 338 B.R. 729, 742-43 (Bankr.S.D.Tex.2006) (basing the amount of monetary sanctions on a firm’s past conduct).
This Court has already discussed its conclusions that the conduct of Aduwa, Gutierrez, Macey, Aleman, and the Firm, referenced in the SCO, was in bad faith and defiled the very temple of justice. Therefore, the C

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/8496150. Public record. Not legal advice.