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Embattled real estate lawyer Kossoff battles trustee over records

3 minute read

U.S. Bankruptcy Court for the Southern District of New York. REUTERS/Andrew Kelly

  • Criminal defense attorney Walter Mack asked a judge to quash Chapter 7 trustee Al Togut's subpoenas.
  • Mack says his client is outgunned by Togut and his legal team

(Reuters) - Manhattan real estate attorney Mitchell Kossoff is pushing back at attempts by the Chapter 7 trustee overseeing the liquidaton of his law firm to obtain documents, asserting that his Fifth Amendment rights are at stake.

In a six-page filing Wednesday evening, Kossoff's criminal defense attorney Walter Mack asked U.S. Bankruptcy Judge David Jones in Manhattan to quash any subpoenas Chapter 7 trustee Al Togut has submitted to his client and to prohibit Togut from compelling Kossoff to testify.

Mack, an attorney at Doar Rieck Kaley & Mack, argued that Togut is attempting to "strip Mr. Kossoff of his rights to assert his constitutional privileges not to self-incriminate himself and his due process rights protected by attorney-client and work-product privileges and to defend himself against criminal allegations made about him."

Kossoff appeared to go missing in April amid a string of civil lawsuits from clients and others, though he has since appeared in multiple matters through counsel. The lawsuits include allegations that Kossoff failed to repay hundreds of thousands of dollars in loans. Kossoff's mother, New York philanthropist Phyllis Kossoff, has accused her son of forging her signature "in order to obtain millions of dollars."

Kossoff's firm, Kossoff PLLC, was forced into bankruptcy last month by a group of creditors who have claimed that the real estate law firm misappropriated more than $8 million in escrow funds.

Mack's filing on Wednesday objects to Togut's May 28 motion for a court order designating Kossoff as the responsible officer of his law firm and compelling Kossoff to comply with him. Togut, a law firm bankruptcy veteran with Togut, Segal & Segal, says Kossoff's refusal to provide everything from bank records and credit card records to client lists has affected his ability to administer the estate.

Mack has repeatedly stated Kossoff will cooperate if he is granted immunity from prosecution. But Togut has argued that Kossoff can cooperate with the trustee while keeping his Fifth Amendment rights intact.

Investigators in both the Manhattan District Attorney's Office and the U.S. Attorney's Office have been probing Kossoff PLLC and Kossoff himself, Mack reiterated in his Wednesday filing. He added that prosecutors have seized his client's documents, prohibiting him from complying with Togut's document requests anyway.

The debate over whether Kossoff's Fifth Amendment rights would be waived if he cooperated with Togut surfaced during a June 10 hearing before Jones over a separate subpoena order.

With his bank accounts frozen and Kossoff himself under a grand jury subpoena, Mack's filings sought to portray Kossoff as being outgunned by Togut and other attorneys at Togut, Segal & Segal.

"He does not have the resources to retain experienced bankruptcy counsel, and he and his fiduciaries are under legal assault by the Togut team comprised of, at least, four experienced bankruptcy lawyers plus further legal staff at billing rates from $800 to $1270 per hour, approximately," Mack wrote.

Togut did not respond to a request for comment.

The case is In re Kossoff PLLC, U.S. Bankruptcy Court for the Southern District of New York, No. 21-10699.

For Togut: Neil Berger, Brian Shaughnessy and Minta Nester of Togut Segal & Segal

For Kossoff: Walter Mack of Doar Rieck Kaley & Mack

Read More:

Bankruptcy judge keeps Kossoff trustee's subpoena power intact, larger fight looms

Kossoff bankruptcy trustee warns of contentious case to come

Manhattan real estate lawyer Mitchell Kossoff facing N.Y. and U.S. criminal probes

Dewey & LeBoeuf bankruptcy vet tapped for Kossoff case

David Thomas reports on the business of law, including law firm strategy, hiring, mergers and litigation. He is based out of Chicago. He can be reached at d.thomas@thomsonreuters.com and on Twitter @DaveThomas5150.

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